As the city grapples with growing inflation and the COVID-19 pandemic, Mayor John Tory’s proposed budget for 2022 contains the city’s greatest home tax hike in his tenure.
On Thursday morning, the $14.9 billion operational budget was presented to Toronto’s budget committee.
It comprises a 2.9 percent increase in residential taxes and a 1.5 percent increase in the city building levy, both of which were passed in 2019.
Staff say that as a result of the combined 4.4 per cent tax increase the owner of an average home assessed at $697,185 will pay an additional $141 in 2022. The property tax bill for an average priced home would total $3,339.
The proposed tax rate represents a significant increase from 2021 when the city was able to limit the hike to 0.7 per cent, which was the lowest of Mayor John Tory’s tenure.
But since then inflation has hit an 18-year high, as supply chain disruptions brought about by the pandemic have exerted upward pressures on prices.
Staff say that in drafting this year’s budget they faced an opening shortfall of $583 million strictly as a result of inflation and growth.
They say that pressure then rose to $2 billion once the projected 2022 impacts from the COVID-19 pandemic were factored in.
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.
That money, however, has not yet been secured.
Staff say that they are also expecting $1.3 to $1.7 billion in financial pressures related to the pandemic in 2023, as COVID-19 and an expected shift to remote work continues to wreak havoc on the city’s finances, particularly when it comes to the TTC.
Looking beyond the next few years, staff say that they anticipate that the city will require $500 million to a $1 billion in “ongoing funding” from the other levels of government to ensure the city’s recovery post-pandemic.
“Make no mistake the 2022 budget is still a COVID budget and we know as much as this year will be a challenge the revenues aren’t going to spring back and the costs aren’t going to disappear next year and the year after,” City Manager Chris Murray said during Thursday’s meeting. “So there is a challenge in front of us for this year’s budget but this is not going away.”
Source_ globalnews.ca
