Mayor John Tory stands firm on low taxes in the face of massive budget shortfall, declining city services and a mounting debt
With his mandate to reduce Toronto’s $14 billion deficit by $5 billion and find $6 billion in savings, Mayor John Tory told his council on Monday that he will not seek further taxes from the residents of Toronto.
But Tory’s plan in the face of a $14.5 billion budget shortfall, declining city services and mounting debt could leave the city looking at a $10 billion annual deficit by 2024-25, according to financial projections.
At the same time, Tory told council, the city is facing a $5.4 billion deficit in its $21.2-billion operating budget for the 2020 fiscal year, after two years of a planned $3.9-billion operating budget shortfall.
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Tory said the City of Toronto is facing a $10 billion annual deficit by 2024-25, if the council does not find a way to save money to restore the city’s public-sector finances, which have worsened in recent years.
The mayor told council that the only option is an expansion of the TTC, which he described as facing “a looming cash-flow crisis.” He noted that the TTC doesn’t have the finances to pay for the operating budget without additional tax revenue or a debt repayment plan from the province.
The mayor suggested that city council would have to be asked to find $2 billion in additional taxes in the coming years in order to continue the current Toronto Fire Services budget – at a cost of roughly $5 billion to taxpayers, which is the equivalent of the city’s operating budget.
“We can no longer continue to operate on the current path,” said Tory. “And the only thing left is to make structural changes to make changes to get to a sustainable model of city government, with better services and more money.”
The mayor’s comments came after council passed his budget Monday evening. Although Tory’s request does not address the issues of an increasing population or the number of residents living in homeless shelters, he said the $5 billion in savings he hopes to find will enable the city to continue providing vital services, which include maintaining the parks and open spaces, the library and the TTC.