Toronto city council finalizes new budget, with 6.9% property tax hike
Budget includes increased funds for areas like transit, police, libraries, affordable housing
Toronto council finalized the city's budget for this year at a special meeting on Tuesday.
In a 19 to 5 vote, council approved the property tax rates for 2025, which includes a 6.9 per cent property tax hike, after debating Mayor Olivia Chow's proposed budget all day. Councillors Brad Bradford, Jon Burnside, Stephen Holyday, James Pasternak and Anthony Peruzza voted against the rates.
The $18.8-billion operating budget, which covers day-to-day spending, includes increased funds for areas like transit, police, libraries and affordable housing. The $59.6 billion 10-year capital budget, which pays for city roads, buildings and other infrastructure, also makes significant investments toward tackling the city's growing state of good repair backlog.
"For too long, living in Toronto has become really difficult," Chow told reporters on Tuesday before the council meeting.
"Rent is too expensive, subways break down too often, too many kids are hungry and police and paramedics are taking too long to arrive when Torontonians need them most."
The city entered the budget process with a $1.2-billion budget shortfall, which it had to fill through a combination of efficiencies and revenue increases.
The first draft of the budget was launched Jan. 13 and was followed by two weeks of public consultations and review by the budget committee. Chow then presented her revised version on Jan. 30, which was virtually unchanged from the original.
Within the budget, Chow had allocated $3 million for councillor priorities. Council approved a plan put forward by Coun. Shelley Carroll on how to spend the money.
Carroll said the city needs to "stay the course" on property taxes.
"What you have before you is a budget that addresses the challenges that the city faces now," Carroll told the meeting.
"It fixes the things that are broken. It makes the city safer. It addresses those people that are in crises, and it does the thing that everyone keeps asking us to do. 'Can you invest in the things that actually protect the value of my property? I've invested in this city, now you invest in me.' And it means that we collectively have a bill to pay. It means that we all have to pay for property taxes," she said.
"We need this budget to do the investing it's doing in a caring way now."
Motions to cut tax for business, increase TTC fares fail
Coun. Brad Bradford asked council to cut property taxes by 25 per cent for small and industrial businesses to offset the possible effect of U.S. tariffs, but his motion failed. He had proposed the tax cut for industrial properties be funded through reserve funds — something Chow had said she does not support.
"I do not believe that it is responsible to raid the rainy days reserve funds, because it's only one time. What do we do next year? You take the money, it's gone," Chow said.
Three motions moved by Coun. Stephen Holyday that would have led to TTC fare increases were all defeated. Council also defeated his motions that would have deleted spending on enhanced programs in the budget and that would have allocated the $3 million set aside for emerging budget priorities to a reserve fund. That would have meant no new spending.
At one point on Tuesday afternoon, protesters interrupted the meeting. It was recessed in response for about half an hour but then resumed.
Councillors have the power to make changes to the budget, but thanks to strong mayor powers, Chow could veto changes, and council would have needed a two-thirds majority to override her veto. Chow made a decision not to exercise her veto and has shortened the 10-day period for the mayor to veto any amendments. That means the budget is now passed.
Councillors offer mix of support and criticism for budget
Several councillors expressed support for the budget while a handful were clearly in opposition.
Coun. Michael Thompson said the budget is significant because it tries to get at the root of the challenges facing Toronto. He said residents will receive benefits from the budget.
"I've never seen a perfect budget. But in this particular respect with this budget, it is the budget for our time to respond to the needs that exist in our city," Thompson said.
Coun. Lily Cheng said the city has no choice but to make investments now.
"The challenges that we're trying to solve didn't appear overnight, and the solutions won't come overnight either. But if we want a safer, more affordable city, we may need to make the investments to see that positive change," Cheng said.
Coun. Jon Burnside disagreed.
"Unfortunately, this budget actually lets a lot of Torontonians down. You know, when our property taxes were increased almost 10 per cent last year, the mayor said it was because of the fiscal hole she inherited. Well, it seems like this past year she's dug her own hole and now she's asking all Torontonian taxpayers to help get her out," Burnside said.
Burnside said there seems to be no end in sight to property tax increases.
Chow plan gets necessary council support
Overall, it has been a relatively quiet budget season, particularly compared to last year's, which saw the mayor in a standoff with police over funding and a property tax increase of 9.5 per cent.
Myer Siemiatycki, a political professor emeritus at Toronto Metropolitan University, said before the meeting that he believes Chow was smart to focus on strategic investments in areas like transit and libraries.
"Additional municipal revenues are being directed to very tangible needs that exist in Toronto," Siemiatycki said.
City to restrict grant money for new Teslas
In other business, council approved a motion 20 to 4 that Chow introduced, to temporarily make newly manufactured Teslas ineligible for obtaining grant funding from the city's zero emission vehicle for hire program.
In November, the city announced it was providing $4.85 million in grants to taxi drivers who buy electric vehicles, she said.
Chow had said taxi drivers who have already purchased a Tesla will not be affected. The eligibility removal will take effect on March 1.
When asked earlier whether she was targeting Tesla because it is owned by Elon Musk — an adviser to U.S. President Donald Trump — rather than other American companies that make electric vehicles, Chow said: "You can draw whatever conclusion you want."
Details of the budget can be found here.
With files from Rochelle Raveendran