Toronto Homeowners to See 10.5 per Cent Tax Increase

January 11, 2024

2 minutes read

Mayor Olivia Chow of Toronto has proposed a significant 10.5% property tax increase in her first budget, marking one of the city’s largest hikes in recent years. This increase aims to address Toronto’s ongoing deficit challenges, exacerbated by crumbling infrastructure and a strained public transit system. The city is also grappling with a severe homelessness crisis.

Budget Chief Shelley Carroll outlined the proposed rate increase, which comprises a 9% property tax rise and a 1.5% boost to the city building fund. This would result in an average annual increase of about $360 for Toronto households. Carroll emphasized the urgency of addressing the $1.8 billion budget shortfall, which she attributed to years of underinvestment and inconsistent governmental support.

Despite over $600 million in identified cost savings for 2024, the financial challenges remain daunting. Chow emphasized that the current proposal is not the final budget and will undergo further review and public consultation before its final presentation on February 1.

The proposed increase comes amid Toronto’s struggle to recover from COVID-19 financial impacts and high inflation. The city’s operating budget shortfall has escalated to nearly $1.8 billion. Without further federal funding, which has been absent this year, the city faces significant fiscal challenges.

A recent agreement with the province to take over the Gardiner Expressway and Don Valley Parkway has offered some financial relief for Toronto, freeing up $400 million for 2024. However, the city is still seeking additional support from other government levels, particularly for refugee and housing needs.

Carroll warned of a potential 16.5% tax increase, including a “federal impacts levy,” if the federal government fails to support refugee and asylum seeker housing. This statement reflects the city’s ongoing negotiations with the federal government for additional funding.

Federal Finance Minister Chrystia Freeland’s spokesperson highlighted the government’s substantial support for Toronto, with $5.47 billion provided since 2016. The federal government is reportedly seeking further ways to assist the city.

Meanwhile, Coun. Brad Bradford criticized the proposed tax increase, arguing that it contradicts the mayor’s stance on affordability and questioning the effort in finding sufficient savings and efficiencies. Bradford’s comments reflect the broader debate on managing the city’s financial challenges while maintaining affordability for residents.

In a video posted to Instagram, Bradford said, “The mayor spent a lot of time renaming Yonge and Dundas [Square]. She spent a lot of time imposing a rideshare cap. How much time has she spent trying to find those savings that we all need?” he asked in the video.