Toronto Mayor Olivia Chow is supporting a nearly 7 percent tax increase as part of the city’s $18.8 billion budget for 2025.
The increase combines a 5.4 percent property tax hike with an annual 1.5 percent increase to the city building fund, a levy intended to support essential infrastructure initiatives.
If the proposed increase is approved by city council next month, taxpayers can expect a 6.9 percent increase in their bills, which translates to approximately $268.37 annually for the average home valued at $692,031.
The budget also contains a 3.75 percent increase in water and garbage fees for Toronto residents.
Chow said the goal of the proposed $18.8 billion budget is to improve affordable housing and key city services.
“The 2025 budget continues the funds to purchase buildings now, preventing renovictions, and turning them into affordable homes forever, many of them managed and co-owned by the residents,” Chow said at a Jan. 13 press conference.
The city also plans to pump more funds into shelters aiming to get people off the streets, support 300 additional households through its Rent Bank program, and roll out a pilot project providing 500 air conditioners to low income renters to manage the summer’s heat.
Other priorities listed by Chow were adding 276 firefighters, police officers, and paramedics to the city’s emergency services, increasing funding for school food programs, and expanding the city’s library and pool hours.
The monies will also be used to increase transit service hours, hire more traffic wardens to ease congestion, and freeze fare rates, Chow said.
If implemented, the proposed increase for this year would follow a 9.5 percent rise in property taxes from the previous year and a 7 percent hike in 2023. That would account for a nearly 24 percent increase in just three years.
Budget Chief Shelley Carroll said last year’s increase was necessary to bridge a $1.8 billion budget shortfall while this year’s proposed budget propels the city “toward fiscal sustainability.”
“Toronto is still recovering from over a decade of underinvestment, which left us vulnerable to face the challenges we face today,” Carroll said. “And we now have ourselves starting with a $1.2 billion opening shortfall, an improvement, but still a challenge.”
The additional funds from taxpayers, combined with the recent agreement with Ontario that will transfer responsibility for the Gardiner Expressway and Don Valley Parkway back to the provincial government have moved the city closer to bridging the financial gap, she said.
The Canadian Taxpayers Federation (CTF) called on Toronto city councillors to reject Chow’s proposal to increase residential property taxes.
“The last thing cash-strapped families can afford is a major property tax hike,” said CTF Ontario Director Jay Goldberg. “Toronto families are struggling with the soaring costs of everything from groceries to home heating. City hall should be looking for ways to help, not making those struggles much tougher with a huge tax hike.”
Chow will have the chance to consider input and make adjustments to the budget prepared by the staff before presenting it to council on Feb. 1.
The lion’s share of this year’s $18.8 billion operating budget is tax supported at $16.6 billion and $2.2 billion is rate supported, the city said in a press release.
The city is obligated under provincial law to deliver a balanced budget before council approves it in February.
