City Budget Watch is back! What do we know so far about City Budget 2023?

It’s City Budget time again, and for the 14th year, City Budget Watch is back to bring you all the analysis you need! The 2023 City of Toronto budget is set to launch in January, with a new City Council and new “strong mayor” but weak democracy powers. 

Torontonians are getting fed up with the crumbling city, the housing and homelessness crisis, deep inequality, and the continued hardship of many of our neighbours. We expect better from this Council.

What we know so far

The pandemic is still having a huge impact on the city’s financial position 

The initial $815-million year-end budget deficit for 2022 fell to $703 million, and the Province has since kicked in $234 million not half of the shortfall, but a third. Even if the Feds match the Province’s contribution, the Province has effectively implied that the City needs to find another $234 million, as if it hadn’t already found “efficiencies.” The anticipated budget shortfall for 2023 is nearly $1.5 billion, requiring senior levels of government to act.  

Although the Province and the Feds need to step up and support cities  and help cover pandemic-related deficits, in particular  the City of Toronto does have the power to raise more revenues than it currently does to pay for public services and infrastructure, and build a better, more equitable Toronto.

The City can’t do it all. But it sure could do better.

3 bills in one act: Strong mayor, weak democracy, and a weakened City Council

Three provincial bills two of which have already passed with very little consultation as of the writing of this post will have serious and negative consequences for municipal governance and the ability of Toronto residents to shape decisions at City Hall.

Bill 3, Strong Mayors, Building Homes Act, 2022

In September, the Province’s Bill 3 handed the Mayor new powers that impact Council decision-making in particular, City Budget decisions. 

The Bill and associated City of Toronto Act regulations give the Mayor the powers to:

  • choose to appoint the municipality’s chief administrative officer;
  • hire certain municipal department heads and establish and reorganize departments;
  • create committees of Council, assign their functions, and appoint the Chairs and Vice-Chairs of committees of Council; and
  • propose the municipal budget, subject to Council amendments and a mayoral veto and Council override process (more on this process below).

Budget-making and all decisions about the budget are now centralized in the Mayor’s office. The mandate of the Budget Committee has been revised as per this mayoral decision. A notable difference from past years: the Budget Committee no longer makes any decisions about the budget, nor makes any recommendations to Council on the operating or capital budgets other than for budget lines where Mayor John Tory may have a conflict of interest (e.g., having anything to do with Rogers). The Committee is now responsible only for hosting public deputations and relaying “advice” to the Mayor on the operating and capital budgets.

Torontonians have recently learned that Mayor John Tory sought even greater, and undemocratic, powers shortly after Bill 3 was tabled earlier this summer

Bill 39, Better Municipal Governance Act, 2022

Bill 39, tabled by the Province on November 16, passed third reading today, and will soon give Mayor Tory the power to pass items deemed “provincial priorities” with only one-third of Council support — thus removing the bare minimum of good democracy: majority rule. Tory sought this power in secret, and did not say a word about it during the municipal election campaign.

The bill was referred to the Standing Committee on Heritage, Infrastructure and Cultural Policy. Our Executive Director, Jin Huh, presented to the Committee, emphasizing that giving such power to a mayor who had only 60 percent of 30 percent of eligible voters vote for him — so effectively 18% of the city — will not solve our city's complex challenges. 

We joined 42 community organizations and 10 City Councillors to send a message to all MPPs: reject Bill 39. Meanwhile, the provincial government had called a late-night "emergency debate" to rush the third reading of the bill. The bill passed third reading with 76-31 vote.

The bill could result in a Constitutional challenge someone could challenge in court a decision made using the power, or a group of citizens could challenge the law as a public interest litigant.

Bill 23, More Homes Built Faster Act, 2022

A third Provincial bill that will have a wide-ranging impact on Toronto also recently passed. Bill 23 reduces fees for developers to build by discounting or eliminating development charges, community benefit charges, and parkland dedication but adds to the City’s already serious financial crisis. The bill will cost the City $200 million annually in revenue, limiting the municipal government’s ability to pay for new infrastructure to accommodate new residents and affordable housing projects like Multi-Unit Residential Acquisition (MURA) and the Open Door Program. 

The province is promising to cover those losses, but whether the city will be fully reimbursed remains to be seen. Either way, through Bill 23 the public will essentially bear the costs of subsidizing developers. To make matters worse, the bill will open up parts of our protected greenbelt to development, while nothing in the legislation will create affordable housing.

Bill 23 also caps Inclusionary Zoning set-aside rates at 5%, significantly reducing the amount of affordable housing that developers must build, and reduces the time that the units must remain affordable from 99 to 25 years. It shifts the determination of "affordable" to developers. And it erodes rental replacement protections, putting more tenants at risk of homelessness and threatening the city’s affordable housing stock.

At its November 24 meeting, Council requested the Province amend Bill 23 to preserve the City’s Green standard, Rental Replacement Policy, parkland provisions, community benefits charges, and development charges.

Budget dates

  • January 10: Staff will table a budget. It appears that this budget will not be “staff recommended” as in previous years, but rather will be tabled by staff based on guidelines from the Mayor.
  • January 10, 12, and 13: Budget Committee meetings will offer a chance for the public and Councillors to hear more about the budget (through a series of presentations).

  • January 17 and 18: Public deputations.
  • January 24: The Budget Committee will have its final wrap-up meeting and make a recommendation to the Mayor, rather than to the Executive Committee or City Council.
  • February 1: By this date the Mayor is required to propose a budget to members of Council and the City Clerk. No meeting is required for this to happen.
  • February 14: Council’s final vote on the Budget.
    Note: According to the strong mayor powers, Council has 30 days from the date the Mayor presents his budget to meet and amend the budget. But Council’s Striking Committee (which recommends the meeting schedule for Council) adopted a motion at its November 24 meeting to waive the 30-day requirement to align with Council’s scheduled February 14 meeting. 

The Mayor may veto any budget amendments, but his veto may be overridden by a two-thirds Council vote. Once this process is exhausted, the budget is deemed adopted by the City.

The seven days between budget launch and the first day of public deputations is the least amount of time provided to community in recent history. This will greatly impact the ability of residents and community groups across the city to engage effectively with the budget.

Learn more and get involved!

Want to rise up for local democracy and fight for our crumbling city?


Image: Vibhu Sridhar, CC BY-SA 3.0, via Wikimedia Commons

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