Got questions about Toronto's big proposed property tax hike? Here's what we know
Toronto's proposed prop‐ erty tax rate for this year is on the table and you've got questions.
CBC Toronto's city hall re‐ porter Shawn Jeffords breaks down below what we know and what we don't at this point.
First, some background: Staff proposed a 10.5 per cent property tax increase this week — amounting to more than $300 per year added to the bill of the aver‐ age home — and warned without funding from the fed‐ eral government, that could climb as high as 16.5 per cent.
The money is needed to combat a massive budget shortfall, city officials say. Mayor Olivia Chow called it "the first step in the process of getting our city back on track."
Key word: process. This property tax debate is far from over and the final rate won't be decided until midFebruary.
Here's what we know right now:
How does this affect the key city services people are used to?
Chow argues one reason the city needs to increase property taxes is to shore up services that have been in de‐ cline for some time. That ranges from increasing service on the TTC to maintaining park washrooms to cleaning up dirty trash cans.
The city also needs the funding to deal with the sig‐ nificant financial strain caused by the pandemic and a $1.8-billion dollar budget deficit.
What's the reaction from city council so far?
We're already starting to see some opposition to the budget. Councillors Brad Bradford, Stephen Holyday and Anthony Perruzza have all said they can't support the spending package as it stands.
Wednesday's budget launch was the first time the majority of councillors saw the proposed plan. They'll spend the next few weeks dig‐ ging into the document, talk‐ ing with their constituen‐ ts and deciding what they can, or cannot, live with.
Sometimes it isn't the property tax increase that pushes a councillor to oppose a budget, it's a smaller service cut that affects their ward ad‐ versely. A proposed cut of windrow snow plowing in this year's budget could be an ex‐ ample of that, with suburban councillors already raising concerns.
Is it true Torontonians have been paying artificial‐ ly low property taxes?
A consultant's report re‐ ceived by the city last fall makes the case that Toronto property tax rates have not kept pace with neighbouring GTHA communities. You can read the full report here.
From 2013 to 2021, the re‐ port notes Toronto raised its property taxes by a rate 1.15 per cent lower than the aver‐ age of Brampton, Missis‐ sauga, Hamilton, Markham and Burlington.
It also suggests the city could increase property taxes to levels comparable to those other cities to help raise revenue. That would require a one-time hike of 10 to 12 per cent over the rate of inflation.
So, possibly a 13 to 16 per cent hike depending on where the rate of inflation stands.
The consultants project that would raise between $490 to $580 million annually.
"If necessary, an increase of this magnitude could be phased in over two or three years to mitigate its immedi‐ ate impact on all residents, in‐ cluding those of lower in‐ come," the report notes.
Olivia Chow says this is‐ n't her budget, but that of city staff. How does that make sense?
Technically, this is true. Under the "strong mayor" legislation introduced last year by Premier Doug Ford, the budget process changed. It lays out very prescriptive steps and a rigid timeline to adopt a budget. Part of that means that the budget's first draft is presented by city staff.
Then it's turned over to the mayor to amend and present a new draft to council.
But the reality is city staff have been working with the mayor's office and her handpicked budget chief to create this document.
While the mayor has been hesitant to comment on this spending package and its large tax increase, she, her staff and council allies have had an influence on the cur‐ rent proposal.
What happens next?
The proposed hike is still very much for debate. A series of consultations and meet‐ ings will happen before the fi‐ nal vote in February. The next few weeks will see:
Telephone town halls and budget committee meetings at city hall next week. In-per‐ son consultations across the city the week of Jan. 22. Budget committee wrap-up on Jan. 26. Mayor Olivia Chow presents her budget draft on Feb. 1. City council meets to approve the final budget on Feb. 14.
Could the 10.5 per cent figure come down before the final vote?
That's always a possibility. Chow may be testing the waters by not directly en‐ dorsing the 10.5 per cent hike. And she's certainly urging people to tell her what they think of the budget.
Politics come into play too. Her political capital is at its highest point right now as the honeymoon with voters con‐ tinues. If she believes an in‐ crease of this size is impor‐ tant, it could be easier for her to take the reputational hit with city residents this year.
It becomes a more difficult proposition in two years when we're closer to the next municipal vote and she may be seeking re-election.
Ontario bailed the city out by taking over capital costs for the Gardiner Ex‐ pressway and Don Valley Parkway. Now, the city says it needs the federal gov‐ ernment to do more. What are you hearing on that front?
There is a long-standing call for federal aid on a num‐
ber of files, but this specific ask is tied to shelter supports for refugees and asylum seek‐ ers. That's something the city says is the direct responsibil‐ ity of Ottawa.
Budget Chief Shelley Car‐ roll says she'll be forced to ask staff to levy a six percent tax hike distinct from the 10.5 percent property tax increase if the feds don't come up with $250 million by Jan. 26.
It's another attempt by the city to ratchet up the po‐ litical pressure on the federal government.
What difference will this make in the years ahead? Is the budget short‐ fall coming down, or, put another way, should we ex‐ pect property taxes to keep rising?
City staff say that, yes, this will help them close the yearly budget gap and no, don't ex‐ pect the property tax rate to be increased at the same level in the years ahead. But don't count on a property tax freeze in the years to come ei‐ ther.
Carroll is quick to point out that Toronto still needs revenues that "grow with the economy." That means some‐ thing like a municipal sales tax or a cut of personal income taxes generated in the city.