Toronto’s proposed budget for 2021 relies on nearly $900 million in assumed funding from other levels of government as the city continues to deal with significant financial challenges brought about by the COVID-19 pandemic.
Staff say that the city will face an estimated $1.6 billion in pandemic-related financial pressures in 2021.
The proposed budget, which was released publicly for the first time on Thursday, is balanced on the basis of $740 million in Safe Restart funding that has already been secured and another $856 million in assumed funding that the city hopes to receive from other levels of government in 2021.
The city is also assuming that the federal government will again come to the table with $61 million in funding to help cover the cost of providing shelter for refugees.
“Very clearly our strategy is to balance the budget by asking for further financial assistance,” City Manager Chris Murray said during a budget committee meeting. “The alternative to this is to look very directly at our reserves and our capital program and take that kind of money from those areas. That also doesn’t rule out the possibility of higher taxation and other measures that might be needed if we are not able to get the provincial and federal governments to support us.”
The city faced $1.8 billion in operating pressures in 2020 due to the COVID-19 pandemic but was able to fully offset that loss through $534 million in savings that it found on its own and nearly $1.9 billion in funding from a federal fund to help provinces and municipalities restart their economies.
Murray said that the city will continue to face significant financial challenges in 2021 and that some of those costs could carry over into future years.
Staff say that the TTC alone will lose an additional $796 million due to the pandemic in 2021 and that the city will also face an additional $281 million in costs related to providing room for phsyical distancing in its shelters. Corporate revenues are also expected to be down by $277 million due to COVID, largely driven by a signiicant drop in Toronto Parking Authority revenue.
“We are experiencing a challenge right now which will not just end abruptly. It will continue to present challenges for us. But if you are going to bet on a city in this country and in the world I would be betting on Toronto,” Murray said.
The proposed budget for 2021 will include a 0.7 per cent residential tax increase which is based solely on the rate of inflation.
The increase, however, goes up to 2.2 per cent when you tack on a 1.5 per cent increase to the city building levy that was approved back in 2019.
Staff say that as a result the owner of an average priced home valued at $698,000 will pay an additional $69 in 2021.
The average property tax bill would total $3,201.
As part of the 2020 budget, the city increased its residential tax rate by 4,24 per cent, costing the average homeowner an extra $128.
Photo credit: THE CANADIAN PRESS/Chris Young
News source: CP24