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

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

The almost $ 15 billion operating budget was asked during a meeting of the Toronto Budget Committee on Thursday morning.

It includes a 2.9 percent increase in the housing tax as well as a 1.5 percent increase in the city building tax that was approved back in 2019.

Staff say that as a result of the 4.4 percent combined tax increase, the owner of an average home valued at $ 697,185 will pay an additional $ 141 in 2022. The property tax for a home with an average price will be $ 3,339.

The proposed tax rate represents a significant increase from 2021, when the city was able to limit the increase to 0.7 percent, which was the lowest of Mayor John Tory’s tenure.

But since then, inflation has peaked in 18 years as supply chain disruptions caused by the pandemic have put upward pressure on prices.

Staff say they were faced with a $ 583 million shortfall in opening this year’s budget, solely due to inflation and growth.

They say the pressure then rose to $ 2 billion when the expected 2022 impacts from the COVID-19 pandemic were recognized.

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 related to the pandemic.

However, that money has not yet been secured.

Staff say they also expect $ 1.3 to $ 1.7 billion in economic pressures related to the 2023 pandemic, as COVID-19 and an expected shift to telecommuting continue to wreak havoc on city finances, especially when it comes to TTC.

Looking ahead to the next few years, staff say they expect the city will require $ 500 million to $ 1 billion in “ongoing funding” from the 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 that as much as this year will be a challenge, revenue will not bounce back and costs will not disappear next year and the year after,” City Manager Chris Murray said during Thursday’s meeting. “So there’s a challenge ahead of us for this year’s budget, but it’s not going away.”

Property tax

Nearly $ 200 million in costs attributed to Omicron

Staff say nearly $ 200 million of the economic pressure associated with the pandemic is specifically due to the emergence of the Omicron variant.

They say the biggest single impact is on the TTC, which will face $ 561 million in COVID-19 pressure in 2022, mainly due to lower passenger numbers.

But the cost of managing the city’s shelter has also increased by $ 288 million compared to before the pandemic, mainly due to the need to secure additional facilities to allow for physical distance.

The budget proposed by staff includes $ 135 million in new investments, including money to hire 63 additional paramedics, restore TTC service to pre-pandemic levels, and expand sidewalk clearance across the city.

In a statement issued Thursday morning, Tory said he has maintained “a sharp focus on sound governance of the city’s finances throughout the pandemic” and believes the budget is a “responsible” given the fiscal challenges facing the city.

He said that “in the coming weeks” he will continue his advocacy work with the other levels of government “to ensure that we protect frontline services and continue to make the necessary investments in major capital infrastructure projects.”

However, Murray said Thursday morning that there are no guarantees that the federal and provincial government will provide emergency funding to help the city compensate for hundreds of millions in pandemic-related costs, as they did in 2020 and 2021.

“I do not have a check in hand,” he said.

Public hearings on the budget will take place on 24 and 25 January. It then goes to the city council as a whole for final approval on February 17th.

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