Mayor John Tory stands firm on low taxes in the face of massive budget shortfall, declining city services and a population on the decline
Mayor John Tory may have signed off on a proposal to raise property taxes by $1 to fund a massive budget deficit in Toronto, but the city’s top bureaucrat has issued a stern warning about its dire financial future.
While Toronto mayor John Tory may have signed off on a proposal to raise property taxes by $1 and give the surplus to Toronto City Council to fill its empty coffers, Toronto City Council Finance Chair Chris Glover has warned that the city’s current fiscal problems could get even worse. “The tax burden on the lower end of the income scale will continue to grow,” said Glover.
Toronto currently owes $5.9 billion in tax revenue, including $2.9 billion in provincial and federal taxes, and estimates that it will owe another $4.8 billion in 2013.
It’s estimated that a 4-% increase in property tax would generate $100 million a year in new revenue, which could go towards capital expenditures for the police and TTC.
The City of Toronto has been grappling with a crippling $4 billion public-sector deficit for several years now, which has led to the cancellation of dozens of projects and millions of dollars in cuts in spending.
Just last week, the city was forced to close a $2.7-million homeless shelter in Scarborough and the city faced a $13 million shortfall for its annual budget deficit in March.
The Globe and Mail recently reported that public-sector spending has fallen by almost a quarter since 2006-07, while revenues have increased by over 10% over the same period.
In 2011, Toronto’s debt-to-revenue ratio increased by 33%, the second largest increase in the country, according to the Toronto Municipal Affairs and Research Group (TMAG).
During the past three years, Toronto has seen a 16% drop in the number of new residents and an 11% drop in the number of people with annual incomes below $30,000. The city’s population is also declining at the fastest rate in all of Canada.
The most recent growth in Toronto is the result of a large influx of new residents, particularly from Ontario — the country’s second largest