Council approves 3.2 per cent tax increase

City council has passed the key part of Mayor John Tory's first budget. On Tuesday they set the 2015 property.


City council has passed the key part of Mayor John Tory’s first budget. On Tuesday they set the 2015 property tax increase, which effectively determines out how much money the city will have to spend in the coming year.

As expected, there was minimal drama at the meeting, which is expected to stretch at least into a second day as councillors debate the details of the spending plan. Here are the highlights so far:

Tax rate shuffle

In a vote of 36-8, council approved a residential property tax increase of 2.25 per cent. The decision allows Tory to say that he kept his promise of holding the increase to the rate of inflation, which city staff pegged at 2.5 per cent. But the impact on the average resident will be more than inflationary when you factor in the .5 per cent Scarborough subway levy and a legislative increase for the current value assessment, which pushes the impact on taxpayers to 3.2 per cent. That works out to additional $83.19 for the average household.

But there’s more. While budget deliberations focus on the property tax rate, that doesn’t represent the full financial impact on residents. The 2015 budget also includes an increase to the cost of TTC tokens of 10 cents and to monthly Metropasses of $7.75, and increased garbage collection fees by 58 per cent. Over the course of a year, the more expensive Metropass alone is equivalent to an additional 3.6 per cent property tax increase.

Trouble ahead

In his speech to introduce his first budget as mayor, Tory echoed the words of the state of the city address he gave shortly before taking office last year. He said the financial plan “achieves a balance between respect for the taxpayers” and making “historic investments in the city.” As evidence, he pointed to $79 million in new tax-based spending, including $39 million for better TTC service and $25 million in funding for social development and anti-poverty initiatives.

But some councillors warned that Tory has set the city on a fiscally unsustainable path. In order to plug an $86-million hole left by the province’s withdrawal of social housing supports, Tory’s budget relies on a plan to have the city borrow money from its own reserves and pay it back over the next four years.

The plan will make budgeting in future years more difficult. It means that even if the city imposes an inflationary tax increase and 10-cent TTC fare hike in each of 2016 and 2017, it will be facing shortfalls of $305 million and $276 million, respectively.

Councillor Gord Perks said there’s no way the city can fill those gaps without cutting services, especially because the shortfalls don’t take into account major expenditures coming down the pipe like the city’s share of the recently revealed $400-million overrun on the Spadina subway extension, Tory’s SmartTrack plan, a $100-million bill from Metrolinx for work on the Georgetown South and Union-Pearson lines, and not to mention, an anti-poverty initiative that will be unveiled this summer.

“You simply have never had a budget that comes anywhere close to finding that kind of service efficiencies in the history of the amalgamated City of Toronto,” Perks said.

Calling Tory’s plan “wishful thinking,” Perks told council it was time to “face facts” and moved a motion to increase property taxes by an additional five dollars a month, which he said would avoid the need to borrow from reserves. The motion was defeated 10-34.

OCAP crashes Tory’s party

Tuesday’s meeting began with a bang when a small group with the Ontario Coalition Against Poverty disrupted Mayor Tory’s opening speech by shouting and, in a rare breach of security, made their way into the councillors’ seating area in the chamber. The protestors were trying to draw attention to the amount the city is spending on the Pan Am Games, money that they say should go to combat homelessness. “Seaton House, Maxwell Meighen, those shelters are full every night!” shouted protester Gaetan Heroux as he was escorted out.

For the record: the city is spending over $90 million on the Games, but only $13.4 million of that is actually coming from municipal coffers. The rest is being picked up by the federal and provincial governments. The 2015 city budget also includes $8 million in new spending for shelters, including 181 additional bed spaces and a new facility for homeless LGBTQ youth.

“Rite more text”

Before the meeting Councillor Rob Ford issued a press release protesting the increase in garbage fees. Unfortunately for the former mayor the release ended with an embarrassing typo, quickly immortalized on social media, that read “rite more text.”

To add insult to injury the city’s chief financial officer thoroughly debunked Ford’s claim that residents are being asked to “pay twice” for garbage collection. The garbage program is indeed funded through both property taxes and bin fees, but the property tax base actually pays for a rebate that goes directly back to bin owners in order to cover part of the cost of collection.

Oh, shit

As the meeting resumed after lunch, Ford alerted security that a man in the public gallery had dropped a bag of something on one of the council chairs and dashed out. “Dog shit,” according to Councillor Joe Mihevc, who covered the offending baggie with some papers before media could photograph it. Security disposed of the bag, but the crap-wielding culprit had apparently escaped the chamber.

Ford is gonna Ford

In yet another sign that the former mayor is intent on not being sidelined during Tory’s tenure, Councillor Ford tabled no fewer than 30 motions to amend the 2015 budget. They included directions to charge user fees for the Welcome Policy (which connects low income families to recreation programs), eliminate city planning and TTC supervisor positions, slash the tree planting budget, cut the mayor’s office budget by $300,000, reduce city grants by $5 million, explore corporate sponsorships for the Pan Am Games, and end the program through which the city rents out motel rooms to house the homeless.

Council has yet to debate Ford’s motions, but several of them are identical to ones he moved during the 2014 budget meeting. At the time, he claimed to have found more than $50 million worth of “savings” but it turned out that many of his motions had no direct impact on the budget, and council voted most of them down.

bens@nowtoronto.com | @BenSpurr

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