Mayor Olivia Chow has eased the final budget of her first term through council without major changes, despite criticism that her election-year spending plan will leave Toronto on shaky financial ground in coming years.
After a daylong debate Tuesday, councillors made only minor tweaks to Chow’s proposal, diverting new funding to a handful of small programs. An attempt by one of the mayor’s opponents to raise revenue by hiking TTC fares was voted down.
Chow sticks to affordability message
Throughout the day Chow hammered home the message she has stuck to since she launched the budget in early January, stating her plan would help make life more affordable for Torontonians. She highlighted its 2.2 per cent residential property tax increase — the lowest of any of her three budgets — and other measures she said would reduce residents’ financial burden, such as eliminating the wait-list for a seniors home support program, a new TTC fare-capping policy and expanded library hours.
With costs for food, gasoline and housing rising, “everybody’s feeling it,” Chow said in a speech to council.
Whether they’re baristas or personal support workers, “Torontonians just want to be able to live in the city where they work,” the mayor said. She ended her remarks with her now-familiar campaign-style slogan: “Let’s together build a city that’s more affordable, caring, and safe.”
Chow said two items in the budget — an expanded school food program and third-straight transit fare freeze — would save families $1,200 a year. That figure would only apply to families with two adults who use the TTC twice a day, every workday, and who cut back on groceries for their two children as a result of the meal program.
She also said she had made the tax system more fair by imposing higher levies on “luxury property buyers” of homes worth $3 million or more, and ramping up the vacant home tax on “speculators who leave homes empty and drive up prices for everybody.”
In previous years, the progressive mayor’s more right-leaning critics have attacked her over significant property tax increases she imposed; 9.5 per cent in 2024 and 6.9 per cent in 2025.
Critics focus on reserve funds
But the 2026 hike is one of the lowest in the megacity’s history, and instead Chow’s opponents spent Tuesday’s meeting attempting to poke holes in her spending plan over her use of reserve funds, which they charged was financially unsustainable.
Chow is using one-time reserve draws to “paper over” operating costs that have “ballooned” since she took office in 2023, and deliver a low voter-friendly property tax increase, said Coun. Brad Bradford (Beaches—East York), who intends to run for mayor in October.
He claimed that if Chow were re-elected she would have to raise property taxes by more than 10 per cent in 2027 to make up the one-time reserve draws that have helped balance the books in 2026.
“While the mayor is celebrating an inflationary tax increase during the election year, what she’s really doing is deferring the pain for Torontonians and setting all of us up for sticker shock next year,” said Bradford.
He tried to corner the mayor — who has not confirmed she will run in the October election but is expected to — into committing to keep tax increases to the rate of inflation next year if she’s still in office. Chow didn’t directly respond, and pivoted to defending her “good fiscal management.”
Coun. Stephen Holyday (Etobicoke Centre) moved a series of motions to raise revenue and reduce the city’s reliance on reserves by hiking TTC fares, cancelling the fare-capping system, and eliminating the policy that allows children to ride free. They were overwhelmingly voted down.
Staff have said for the most part the city isn’t using reserve funds differently than in previous years, and attributed the greater reliance on them in 2026 — about $400 million more compared to last year — in part to the municipality having saved up in previous years for costs coming due in 2026, such as the FIFA World Cup and this fall’s election.
Chow’s allies defend budget
It’s hypocritical of councillors who slammed the mayor over higher tax increases in prior years to oppose this year’s budget, according to Coun. Paula Fletcher, an ally of Chow’s.
She had a message for those who said it was inappropriate for Chow to use “rainy day” funds to plug holes in the budget: “It’s raining.” Residents are suffering under a tariff-battered economy and the mayor’s affordability-focused budget provided an “umbrella” from that storm, Fletcher said.
Although the mayor had ample support to get her $18.9-billion operating budget and $63.1-billion capital plan through the 26-member council without major amendments, in the now annual scramble over spending scraps that some have likened to council “Hunger Games,” members approved an omnibus motion from budget chief Coun. Shelley Carroll to spend $2 million in previously unallocated funding on a host of low-cost programs.
They included rat and coyote response plans, a Scarborough youth hub, free zoo trips for school kids, Canada Day fireworks at Mel Lastman Square, street pole banners for Little Iran, drop-in centres, tenant legal services and pest removal programs for seniors.
Carroll also successfully moved motions to restore funding for youth violence programs that were set to lose federal support, and to provide a deeper property tax discount for small businesses of 20 per cent.
Chow’s budget increases gross city operating spending by just 1.1. per cent compared to last year. There’s about $30 million in “new and enhanced” services, such as two dozen more traffic agents, colour-coded rental apartment ratings, crisis teams on transit, additional emergency services positions, more than 1,000 air conditioning units for low-income seniors, and green incentives for homeowners.
Net spending on the TTC will increase by about $94 million, or about seven per cent. There’s also a net boost to the police budget of about the same amount, a funding injection that will allow for the hiring of 360 officers this year, and which the mayor defended in light of last week’s shocking arrest of service members in a corruption probe.
Staff said they found about $788 million in spending reductions and offsets for the operating budget through efficiencies, program reviews and “bridging strategies.”
On the capital side, while the budget makes investments in infrastructure such as transit, roads and public housing, it will postpone some projects such as expanding or building new community centres, which the city blames on provincial changes to development charge revenue.
This year’s 2.2 per cent property tax increase consists of 0.7 per cent to fund the operating budget, and a previously approved 1.5 per cent for the city building fund dedicated to housing and transit. It will add $91.53 to the average homeowner’s annual tax bill.
Under the province’s “strong mayor” legislation, council doesn’t approve the budget as a whole, but can vote on specific amendments.
The property tax increase was approved 19 to 5, with councillors Bradford, Holyday, Vincent Crisanti, James Pasternak and Anthony Perruzza opposed.
The 2026 spending plan was deemed adopted after the mayor formally declared she wouldn’t veto any changes
