Will Toronto council approve a 9.5% tax hike? Councillors to make call this week

Mayor Olivia Chow's first budget since winning the city's top job will come to council for one final debate Wednesday, and that could see council adopt the highest tax hike for Torontonians in over 25 years.

Should the mayor's budget pass as expected, a proposed 9.5 per cent tax hike will become a reality. Chow says she's trying to strike a balance with her first spending package, paying for core services while also addressing the city's $1.8 billion structural budget deficit.

The new mayor, who swept to power last summer in a byelection, has defended the tax hike as "modest," though she acknowledges it is a difficult choice.

The city has to address growing financial pressures worsened by the pandemic while still investing in transit and the city's state of good repair. Toronto can't cut its way out of the situation, she said recently.

"If we cut deeper, we could be cutting a bone and hitting the marrow," she said. "It would damage our city, and we can't do that."

The final budget debate comes after weeks of public consultations and budget committee meetings. Wednesday's one day session will set Toronto's spending priorities for the year. By law, it must wrap with the city balancing its books.

While Toronto's official budget process kicked-off in January with a staff proposed document that included a 10.5 per cent property tax hike, the discussion of the city's troubled finances has been going on for months — if not years.

Chow has been trying to build a political consensus around the need for a tax increase since last year's byelection, said Myer Siemiatycki, a politics professor at Toronto Metropolitan University. Now, he says getting her budget passed and agenda moving will be a priority for the new mayor.

"This is the single most important vote that will come to city council this year," Siemiatycki said. "It affects everything else that is to follow."

The tax rate will be the highest since amalgamation in 1998, but it is a point lower than the suggested staff rate from last month. The mayor could be sending a message to councillors that if they want to add anything on the council floor there will be a cost, Siemiatycki said.

"I think the mayor is implying that if you want a tax increase that can come in at under double digits, this is what it looks like," he said.

"And I think what she's putting on notice councillors who may want a variety of additional pet projects, (saying) 'OK, are you prepared to go higher than 9.5?'"

Councillors move to block cut to snow-clearing service

Over the last week, councillors have been working to find approximately $4 million in funding to save windrow snow clearing, which is on the chopping block in Chow's budget.

The proposed 2024 budget includes $620 million in cuts or offsets and included on that list is ending windrow plowing services for 262,000 homes. Windrows are piles of snow that block driveways and are created by passing plows.

Right now, snow removal equipment follows after plows have done their work to clear driveways. But under a proposed plan by transportation department staff, the service would be eliminated in the 2024/2025 winter season.

Coun. Paul Ainslie, who has been one of Chow's allies, said the day she launched her budget that he registered his objection over the cut with the mayor.

"That's a service that a lot of seniors depend on in this city," he said. "I've been quite clear with the mayor that the window service has to stay in the budget."

Toronto Police Chief Myron Demkiw has been advocating for a $20 million budget increase for the police service. The proposed city budget calls for a $7.4 million hike to police budget. (Toronto Police Service handout)

Police funding debate certain to be on the table

A number of councillors have also expressed support for granting Toronto police its request for a $20 million budget increase to their nearly $1.2 billion net budget.

Chow's budget proposes to give the police a $7.4 million budget hike. She has pushed back against police Chief Myron Demkiw's characterization of that increase as a "cut."

Siemiatycki said the aggressive public relations campaign mounted by the police service and the association which represents its officers may have backfired if the goal was to get Chow to grant the request. It appears to have done the opposite, he said.

"It's hard to believe that the safety of the city hangs in the balance of so small an additional increase," he said. "And it's hard to contort an increase into a cut. The numbers speak for themselves."

Budget fight over $8M unallocated line item

A fight over $8 million in the $17 billion budget could play a big part of the discussion.

Earlier this month, the mayor earmarked the funding pocket earlier to address "unresolved debates." Councillors have been working behind the scenes leading up to Wednesday's final budget vote to carve up that funding — potentially to spend further on core services like the police or snow clearing.

But the mayor's funding pocket decision has sparked some criticism.

"I don't think it's going to be particularly helpful or constructive to set up a 'councillor Hunger Games,' debate on the floor of council over the services that are so important to Torontonians," Coun. Brad Bradford said.

Coun. Stephen Holyday likened the exercise to "fighting over table scraps." He said if the mayor can't allocate the funding herself, she should use it to cut the tax rate.

" I feel like it's a sinister setup … Where they will throw $8 million like a bowl of meat into a den of lions, and watch us fight each other for it," Holyday said.

Last year, former mayor John Tory left a similar funding pocket of $7 million which council used to help the city's unhoused, creating an additional warming centre with some of the cash.