THE PROBLEM WITH THE 2016 CITY BUDGET
By Rick Eagan – PNLT Board member
On Wednesday, February 17, Toronto City Council approved the 2016 City Budget.
Several Councillors (including Ward 14 Councillor Gord Perks) moved motions to increase the residential property tax recommended by the Budget Committee and Executive Committee. At the end of the day, the property tax increase remained at 1.3% for residential homes.
A 1.3% inflationary increase to property tax will barely maintain current service levels. On the actual day of the vote, inflation was actually 1.6% according to Statistics Canada. That rate is calculated as a Canada wide average of a standard set goods (food, cloths, transportation, housing, phone, etc.) they use to measure inflation. It means that if it cost you $100 to buy a shopping basket full of all these things in 2015, it would cost you approximately $102 today to buy the same things. If you were low income and the only thing you were buying is food, your cost would be $105 in 2016 as food costs have gone up 5% on average. If you were feeding a family of 4 on $100/week, over a year you would need to spend $260 dollars more to provide the same food.
A 1.3% increase means is that the Poverty Reduction strategy council unanimously endorsed last year has little money for expanded city services that modest and low income people desperately need. The waiting lists for affordable housing and childcare spaces will continue to grow. Recreation and library programs may need to cut back on programs or increase/ introduce fees. TTC is going up but the level of service will be the same or worse. The Poverty Reduction Strategy endorsed by Council identified over $100 million in new spending in order to reduce poverty in Toronto. This budget contains just a little over $5 million, primarily in student nutrition and 2 additional youth programs.
At the beginning of the budget process last fall, city budget staff framed the discussion as a revenue problem. Historical property tax increases that have not kept up to inflation, property taxes that are far lower than other Greater Toronto municipalities, property taxes on business and multi-residential property far lower than the province allows the city to charge, an unwillingness to use other taxes or fees the province allows the city to charge (eg an entertainment tax that people going to a Maple Leaf game would have to pay, tolls non-residents using the Gardiner Expressway would have to pay ) and the loss of Federal and Provincial funding are all contributing to lower city revenues.
Too many councillors are more worried about getting re-elected than what this budget means for the growing levels of poverty and inequality in our city. They rightly perceive that increasing property taxes is a stretch for many moderate income and middle class Torontonians (especially seniors on fixed incomes) whose incomes have been stagnating. They wrongly perceive that there is no negative impact on the middle class by not addressing the revenue problem and misleading the public that the City has a spending problem. They ignore the fact that many moderate income households also desperately need affordable and decent housing, childcare, transit and recreation. Councillors who did not vote for investing is city services lack the vision and leadership to remind their constituency that they have a duty and a responsibility to create the conditions today and future generations for everyone to enjoy a decent quality of life in a vibrant and dynamic city rich in opportunity and diversity. Council must invest in the future they are duty bound to help shape. Otherwise we all don’t get what we all didn’t pay for.