Toronto’s proposed budget for 2022 includes biggest property tax increase in 8 years

Toronto’s proposed budget for 2022 includes the largest residential tax increase in Mayor John Tory’s tenure as the city faces significant pressure from both rising inflation and the COVID-19 pandemic .

The $ 14.9 billion operating budget was tabled at a meeting of the Toronto budget committee on Thursday morning.

It includes a 2.9% residential tax increase, as well as a 1.5% municipal building tax increase that was approved in 2019.

Staff say that due to the combined 4.4% tax hike, the owner of an average home valued at $ 697,185 will pay an additional $ 141 in 2022. The property tax bill for a home of average price would be $ 3,339.

The proposed tax rate represents a significant increase from 2021, when the city was able to limit the tax hike to 0.7%, which was the lowest in Mayor John Tory’s term.

But since then inflation has hit an 18-year high as supply chain disruptions from the pandemic put upward pressure on prices.

Staff say that in preparing for this year’s budget, they faced an initial deficit of $ 583 million strictly due to inflation and growth.

They say the pressure then rose to $ 2 billion once the predicted impacts of the COVID-19 pandemic in 2022 were factored in.

The budget, as proposed, is balanced on the basis of approximately $ 1.4 billion in funding from the federal and provincial governments to cover costs associated with the pandemic.

This money, however, has not yet been secured.

Staff say they also expect financial pressures of $ 1.3 billion to $ 1.7 billion from the pandemic in 2023, as COVID-19 and a planned shift to remote working continue to wreak havoc on city ​​finances, especially with regard to the TTC.

Beyond the next few years, staff say they anticipate the city will need $ 500-1 billion in “ongoing funding” from other levels of government to ensure the city’s recovery from the pandemic.

“Make no mistake, the 2022 budget is still a COVID budget and we know this year will be a challenge, the revenues are not going to pick up and the costs are not going to go away next year and the year after,” City manager Chris Murray said at Thursday’s meeting. “So there is a challenge ahead of us for this year’s budget, but it’s not going to go away.”

Almost $ 200 million in costs attributed to Omicron

Staff say nearly $ 200 million in financial pressures from the pandemic are specifically due to the emergence of the Omicron variant.

They say the biggest impact is on the TTC, which will face $ 561 million in COVID-19 pressures in 2022, largely due to declining ridership levels.

But the cost of administering the city’s shelter system is also up $ 288 million from before the pandemic, mainly due to the need to secure additional facilities to allow for physical distancing.

The staff proposed budget includes $ 135 million in new investments, including money to hire 63 more paramedics and expand sidewalk cleaning across the city.

In a statement released Thursday morning, Tory said he is maintaining “close attention to the sound management of the city’s finances throughout the pandemic” and believes the budget is “responsible” given the fiscal challenges facing the city. the city is facing. “To protect frontline services and our ongoing recovery, Toronto will need an additional $ 1.4 billion in COVID-19 relief funding this year from other levels of government so that we can continue to providing essential front-line services without reducing the city’s capital budget, which will jeopardize construction jobs and economic recovery, ”Tory said. “Over the next few weeks, as Budget Leader Gary Crawford, the Budget Committee and City Council work on finalizing the budget, I will continue to advocate with other levels of government to ensure we protect primary services. line and continue to make the necessary investments in major capital infrastructure projects.

Public consultations on the budget will take place on January 24 and 25. It will then be submitted to the entire city council for final approval on February 17.

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