The COVID-19 pandemic has revealed and exacerbated deep and long-standing social, racial and geographic inequalities in our city. Our communities are struggling, evidenced by multiple and mounting crises in the areas of housing and homelessness, food security, mental health and addictions, child care, transit, and more. Now more than ever, we need bold leadership and action from Toronto City Council that recognizes the urgency of this moment.
More than a decade of austerity budgets have left the City of Toronto ill-equipped to respond to this moment. Sad to say, this year's draft budget does little to turn the corner on this unfortunate history. On January 13, amidst the raging Omicron wave, the City of Toronto launched its 2022 staff-recommended tax-supported budget, the fourth and final budget of this term of Council. In an uncommon time, with communities struggling through a fifth, hard-hitting wave of the COVID-19 pandemic, the City is proposing a status quo budget that prioritizes low property taxes, proposes no new revenue tools to finance new services, includes close to half a billion in City-funded 'offsets' (i.e. savings/cost cutting), and little new funding to address the many urgent needs of Toronto residents.
Preliminary Budget Highlights
We're getting started, digging into all of the budget documents and will share the analysis in the weeks to come.
Here are the preliminary highlights:
Budget Shortfall, Federal and Provincial Responsibilities & Unfunded Plans, Strategies and Infrastructure
- Similar to last year, the 2022 draft budget includes an enormous shortfall of $1.4 billion due to the pandemic which will require provincial and federal funding. Municipalities across the country have experienced similar financial problems requiring senior orders of government to step up. The federal and Ontario governments have flowed considerable funds to the City of Toronto in the past two years, with only a small amount left outstanding to fill the hole from 2021. Similar support is anticipated and required for 2022.
- The City of Toronto identified measures to reduce costs from its budget by $494 million (leaving the $1.4 billion hole). We need to understand more about the impact of this nearly 1/2 billion in cost cutting on programs, services and infrastructure.
- In addition to the $1.4 billion, the budget assumes that the Province will provide an additional $27 million to cover supportive housing operating costs related to new units coming online this year and that the federal government will contribute $61 million for services, such as shelters, for refugees. Similar funding was included in previous City budgets. The provincial and federal governments have not confirmed that they will provide these amounts for 2022 at this time.
- The City has set aside funds in a reserve account as a ‘backstop’ in case the federal and provincial governments do not come through with the $1.4 billion. These reserve funds would otherwise be used to support the woefully underfunded capital plan.
- Case in point, the City's state of good repair backlog is expected to rise significantly over the decade without new funding. If the City's assets and infrastructure are not kept in good condition, this increases costs down the line and adversely impacts services. The budget shows a $7.4 billion backlog, expected to increase to $16.3 billion over the decade.
- Another example, Councillor Perks asked if the 10-year capital plan includes funds to buy the transit vehicles needed to achieve related parts of the City's fleet plan and climate action plan. The answer was no, those vehicles are not fully funded in the 10-year capital plan. A livable and sustainable Toronto requires the dedicated funding to deliver on its action plans and strategies.
Limited New and Enhanced Funding
- The budget includes almost $135 million in new and enhanced programs and services, within the City's $13 billion tax-supported operating budget. More than half comes from federal and provincial funding. The City is contributing $53.5952 million of the nearly $135 million for new and enhanced services.
- Low-income transit riders did not fare so well. The budget fails to include funding for the expansion of the discount Fair Pass for low-income transit users, further delaying the transit equity plan. Read TTCriders’ press release on the City budget and the Fair Pass here.
- The full list of new and enhanced services includes child care, long term care reform, housing, reconciliation and combatting anti-Black racism, community safety, crisis response, mobility, community development, and modernization initiatives. Details to follow.
- Councillor Layton asked staff if the Shelter, Support and Housing division has the resources it needs to address the shelter crisis right now. Staff indicated that they have the resources and are working to address shelter access and provide needed PPE. Advocates and unhoused folks would beg to differ, with current active COVID outbreaks in 48 shelters with 359 known active cases at last count, many people unable to access shelters or hotel shelters for isolation or recovery, folks with COVID instructed to isolate "in situ" within shelters which would appear to be in contradiction to public health guidance and requirements, lack of access to proper PPE for shelter users and workers, continued use of congregate space despite the rise of the highly contagious Omicron variant, and people even unable to reach the referral centre by phone. And not to mention the ongoing encampment clearings by police and City staff, financed through public funds. Yesterday, in much-welcomed news, the City announced that over 310,000 N95 masks will be made available to shelter clients and two community centres will open as emergency shelters. As has been the case for many years, vocal and concerted organizing efforts have been essential in getting action at city hall.
- It didn't have to get to this point. Experts with the Shelter and Housing Justice Network released a detailed, evidence-based Emergency Winter and Shelter Support and Infrastructure Plan in October, as they could see the crisis mounting months ago. But City Council did not take up the plan.
- The budget includes funding for new and enhanced services in the Shelter, Support and Housing budget. We'll have a closer look at that in the days to come.
Priority on Low Property Taxes, No New Revenue Tools to Support Critical Services and Infrastructure
- The budget includes a 2.9% increase in residential property taxes, maintaining the increase at the rate of inflation, plus a 1.5% planned increase for the City Building Fund for public transit and affordable housing. For an average home worth $697,185, the property tax increase is $93 plus $48 for the City Building Fund. Total property taxes on this average home are $3,339 not including educational tax. Consistent with provincial requirements, there is no property tax increase on multi-residential housing. Consistent with City policy and provincial requirements, commercial property taxes increased by half of residential at 1.45% and industrial by a third at 0.97%. There’s a new small business subclass which provides about 25,000 small businesses with a reduction of 15% on their property tax rate.
- Toronto City Council has had a multi-year plan to shift the tax ratios between commercial, industrial and residential which is almost complete. Check the budget presentation for a slide on the shift in property taxes among these classifications. See link below.
- This budget introduces no new revenue tools to support critical public services.
We've got lots of budget documents to dig into and will continue to provide analysis and updates in the days and weeks to come.
Budget Documents, Events and Trainings
Budget Events –
Check out our budget events calendar, including SPT’s City Budget Town Hall on January 18 and our City Budget Community Dialogue on January 20; meetings, events and trainings organized by TTCriders and Progress Toronto; and City Councillor budget town halls!
Check them all out here. We’ll keep updating the list as new ones are announced.
Check Out SPT’s City Budget Pages –
Let me know if you have a budget event to add to the calendar! Contact [email protected]
City of Toronto’s Budget Pages
- Budget page
- Budget presentation
- Budget tables, including new and enhanced programs and services
- Budget meeting schedule
Register to Have Your Say on the 2022 City Budget! Public deputations will be held on Monday, January 24 and Tuesday, January 25, online. This is your opportunity to share your priorities, ideas and concerns about the City budget with the Budget Committee. To register to speak email [email protected] or call 416-392-4666. Indicate which date and time of day (morning, afternoon, evening) that you would like to speak. Please register by 4:30 p.m. on Friday, January 21, 2022. Speakers may only make one presentation. Registered speakers will be provided with instructions about how to join the meeting. The meeting will be streamed live here.
TTCriders and Progress Toronto are holding deputation training sessions. Check out our Budget events calendar for more details.