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Deborah Baic/Deborah Baic/The Globe and Mail

Mayor David Miller has balanced this year's budget without a provincial bailout, but he has left it to his successor to make the sweeping changes necessary to solve Toronto's long-term financial crisis.

The proposed $9.2-billion operating budget is balanced partly on the backs of Torontonians, who will have to swallow a 4-per-cent residential property tax hike and new or higher fees for everything from drop-in swimming to summer camps to on-street parking permits.

The city managed to wring a $219-million surplus out of last year's books - on top of $31-million in strike savings - and to find $172-million in savings for this year's budget, including eliminating 260 jobs.

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But the nips, tucks and fee and tax increases that put Toronto in the black in 2010 won't fix the city's structural deficit: Finance officials are already predicting a $469-million shortfall for 2011, when the reserve well is expected to be bone dry.

"This budget does not solve the fundamental structural imbalances in the city's finances," said Toronto Board of Trade president Carol Wilding. "There isn't any clear or complete long-term plan to get us to that sustainability. That's a big issue."

Mr. Miller, however, emphasized the city's outlook in 2011 is brighter than it has been for years. Midway through last year, Toronto faced an $821-million shortfall for 2010, he said.

"We're starting off in a much, much better place coming in for 2011," he said. "In the long run, however, in order for the city government's finances to be stable, we do need an agreement with the province on the operating funding for the TTC."

For the first time in years, the province did not come through with 11th-hour transit funding to help balance Toronto's budget. Instead, the Liberal government committed to talks with the city aimed at sealing a permanent transit funding deal by Dec. 1.

The budget, which goes to council in April, does not propose aggressive overhauls such as selling assets or stakes in assets, outsourcing more city services or slashing more staff.

"That's the political makeup around here," said Councillor Doug Holyday, a frequent critic of city spending. "They're here to increase and enlarge and incur more costs. That's the type of government we've elected here in Toronto. Until we change that, we're going to continue to spend more."

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Mayoral candidate Rocco Rossi assailed the budget proposal for failing to sell assets such as Toronto Hydro and Enwave and failing to forecast beyond 2011.

"We can't simply keep on going to the taxpayer and senior orders of government for more money. ... It's amateur hour, from a management standpoint," he said.

Mayoralty front-runner George Smitherman declined to comment on the budget, while Deputy Mayor Joe Pantalone, another mayoralty candidate, called it a "good-news budget."

The proposed property-tax hike would add $93 to the annual bill for an average Toronto home, valued at $407,374. Non-residential taxes, including those on commercial and industrial properties, will rise by 1.33 per cent.

Ms. Wilding praised Mr. Miller for sticking to his commitment to keep shifting more of the tax burden off businesses and onto residents.

Toronto's residential property taxes remain the lowest in the GTA, Mr. Miller said.

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"I'm pleased that this year the City of Toronto has been able to balance its budget in the midst of a global recession at a time when most governments are struggling with very significant deficits," he said.

The city achieved that in part by slashing the budgets of many departments and agencies, for savings totalling $172-million. The budget proposes spending decreases for areas such as the waterfront secretariat (down 3.7 per cent), city planning (5.1 per cent), the mayor's office (1.4 per cent), Exhibition Place (5.1 per cent) and the Toronto Zoo (5.8 per cent.)

Other areas would receive extra cash under the budget proposal, including: Children's services (up 4.4 per cent), 3-1-1 customer service (23.6 per cent), parks, forestry and recreation (4.4 per cent), Toronto Public Library (1.8 per cent), TTC (9.1 per cent) and Toronto police (3.9 per cent).

With a report from Anna Mehler Paperny

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MORE MONEY, FEWER SERVICES

Tomorrow, city officials will unfurl the full list of new and increased fees, which are expected to bring in an additional $13-million. They provided some examples yesterday: A new, one-time $50 recreation-program registration fee kicks in May 1 for families who aren't already registered; on-street parking permits will increase to $157.74 from $143.40; and first false alarms to the fire department will cost people $350 per truck that responds. (That charge is currently levied only on second false alarms.)

The budget also proposes minor service cuts, including: reducing hours at 27 library branches on five Sundays this fall; eliminating Saturday service at Toronto courts and closing courts half-an-hour earlier on weekdays; eliminating front-desk service at city hall and civic centres, and reducing staff in bylaw enforcement.

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Kelly Grant is a health reporter with The Globe and Mail. More

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