Mayor Olivia Chow is backing a city budget that includes a 6.9 per cent property tax hike, a measure that would cost homeowners hundreds of dollars more this year but that she said would enable critical investments in libraries, police, transit, housing and other services.
At a city hall press conference to kick off the annual budget process Monday, the mayor vowed that the 2025 spending plan would advance the goal she has worked toward since taking office a year-and-a-half ago of creating a “more affordable, caring and safer city, where everyone belongs.”
It will deliver “change in Torontonians’ lives today,” Chow promised alongside budget chief Coun. Shelley Carroll (Ward 17, Don Valley North). The pair were flanked by dozens of uniformed police officers, firefighters, paramedics, bylaw officers, crisis workers and TTC staff, whom Carroll called “the physical embodiment” of the investments the administration is making.
Although the planned property tax increase is lower than the historic 9.5 per cent raise Chow imposed last year in her first budget, Coun. Brad Bradford said it was well above the rate of inflation and would only make life in the city less affordable.
The Beaches-East York representative asserted that on Chow’s watch city spending has risen, taxes have gone up, and yet residents feel public services haven’t improved. He accused the mayor of failing to control spending while approving lavish contracts for transit workers and other city employees.
With the city yet to announce the results of negotiations with police, firefighters and other major municipal unions, staff said they set aside $300 million this year for potential labour settlements.
“The TTC has never been less reliable … housing is more expensive, encampments have doubled and you’re paying more for it. So the story of this budget, just like last year, is you’re paying more and you’re getting less,” Bradford said. “And I think people are rightly frustrated by that.”
The spending plan released Monday was crafted by city staff under Chow’s direction. It isn’t final; over the next two weeks it will be reviewed by the budget committee and put to public consultation. Under the strong mayor legislation enacted by the Ontario government, the mayor has to finalize her version by Feb. 1. It will go to council on Feb. 11.
The 6.9 per cent residential property tax increase consists of a 5.4 per cent hike to support the operating budget, plus a 1.5 per cent increase to the city building fund dedicated to capital expenditures for transit and housing.
City staff estimate the increase will cost the average homeowner an additional $268 a year, based on an average residential assessment value of about $692,000. It will generate $251 million in additional revenue for the city’s operating budget in 2025, and about $70 million for the city building fund.
Council has already approved 3.75 per cent hikes to waste and water rates this year.
At $18.8 billion, the projected 2025 gross operating budget is $1.8 billion higher than it was last year. City staff said the spike was mostly driven by federal and provincial programs that flow through the city budget and have no direct impact on the property tax base.
Rising city expenditures, for transit, community housing, emergency services and other programs, accounted for an increase of less than four per cent to last year’s budget, which City Manager Paul Johnson said was “reasonable” and didn’t represent “runaway spending” by the municipality.
The operating budget includes $94 million of new spending for initiatives such as increasing TTC service hours by almost six per cent, delivering school food programs to 8,000 more students, expanding Sunday hours at more than 70 libraries, raising the complement of traffic wardens to 100, and hiring 256 front-line firefighters, police officers and paramedics. TTC fares will also be frozen.
In its 10-year, $59.6-billion capital plan, the city is setting aside about $2 billion for housing and community improvements, and plans to use contributions from the “new deal” with the provincial government for the purchase of 55 new subway cars for Line 2, and to fund a significant reduction Toronto’s state of good repair backlog.
“What we are doing is fixing what we have. The longer we wait to fix things, the more expensive it is, especially hard infrastructure,” Chow said.
The opening pressure on this year’s operating budget — the unfunded inflation- and growth-related costs required just to maintain existing service levels — was $1.2 billion, a significant gap but more manageable than the $1.8 billion the city faced in 2024.
Carroll said wrestling that figure downward was a sign the Chow administration’s “multi-year” budgeting approach was paying off. Staff reported finding $680 million in savings and offsets this year, through measures such as renegotiating contracts for shelter hotels and more efficient use of the city vehicle fleet.
Toronto is “still recovering from over a decade of underinvestment, which left us vulnerable to face the challenges we face today,” Carroll said, but the 2025 budget “continues that journey towards fiscal sustainability.”
But Coun. Jon Burnside (Ward 16, Don Valley East) said there was too much “uncertainty” baked into the multi-year plan, and the mayor and city staff hadn’t guaranteed Torontonians won’t be hit with “untenable” tax increases in future budgets.
“So, where does it end? There’s no road map to saying, ‘We’re increasing it by seven per cent this year and then we’re going to come in at inflation next year.’ There are no promises and that is the whole problem,” said Burnside, who argued the tax increase should be below five per cent.
“It’s not sustainable.”
