Author: Alexis

The City of Toronto’s Budget Shortfall

The City of Toronto’s Budget Shortfall

Mayor John Tory stands firm on low taxes in the face of massive budget shortfall, declining city services and an unpopular provincial government

By The Editorial Director

Tuesday, March 1st, 2017

In May of 2016, city council voted to approve a $945.7 million capital budget with a tax rate of just 5.77%. The vote was by an almost 100% majority. Council had given itself $900 million in surplus revenue to begin with, and added this money in with the surplus funds.

This was to be the last year that the property tax rate remained at five per cent, the lowest in the city’s history.[1] The tax increase would have to be approved by City Council, and Mayor John Tory is very likely to bring it before the council as has been his practice in previous years.

In the spring and summer of 2016, the provincial government introduced massive austerity measures in the form of a 15-per-cent cut to funding for all local government services. That includes the cost of policing, waste management, street cleaning, and garbage collection, among many other services.

The provincial government would also implement a new online tax system, called e-Revenue, and create a new local government assessment that would no longer include property taxes. E-Revenue is a single set of rules for local taxation, eliminating the need for cities to make separate assessments for municipal services in each municipality.[2]

City council had to deal with the province in 2017 on many fronts. The biggest of these was the massive budget shortfall, as the city is currently facing a projected $5 million budget shortfall for the 2018 fiscal year. The city has already run the 2018 budget past its own internal auditor, and the result has been that the city does not have the money to run the budget.

Consequently, the city will have to ask the provincial government for one of two things: a one-time injection of more

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