City of Toronto Budget 2015

First, thanks to everyone who came to our Ward 13/14 budget town hall last month. Here’s an update on where we are now.

After a month’s intensive study we have a clearer picture of the strengths and weaknesses of the 2015 proposed budget.

On the plus side, most of the bus service cut by the previous administration has been restored. Many of the improvements Council approved in our Parks Recreation and Forestry Department have been funded. Some tools to benefit low income Torontonians have seen modest improvements.

However, there are very deep problems. Most concerning is the City Manager’s proposal to borrow from the funds we have set aside for capital projects (buying transit vehicles, repairing roads etc.) in order to cover the Provincial cut to our funding for social housing.

To remind you, we heard in late 2013 that the province was phasing out an annual contribution to our budget which helped with public housing costs.

In total that Provincial decision added $129 million in costs to the City budget. Because of the phasing of that cost we must “find” two-thirds of that money this year and the final third next year.

To simplify a complex financial manoeuver, the City plans to borrow money this year, next year and the year after. The City plans to pay back the principle and interest of these loans by finding cuts to other programs. Proponents of this approach insist that those cuts will not reduce service quality. Instead they say, they will find the money by  doing things more efficiently.

This sounds somewhat plausible until we review the City’s current fiscal context. Part of our budget process forecasts the next year’s budget. For 2016, even before the “self-borrowing” proposal staff are forecasting: a tax increase right up to the rate of inflation; an increase TTC fares; and, $308 million in cuts to the City’s budget.

Altogether the “savings” we are hoping to find next year amount to nearly 10% of our discretionary spending.

My view is we cannot continue to “bet” on finding savings of this magnitude. At some point we have to squarely face the fact that the services we expect from our City government cost more than the taxes we currently collect. I think most people would agree that deep cuts to City services are not the way to go. In fact, in many areas (transit, daycare, housing) I am hearing people want more and better service.

There are some other worrying changes in this budget. I want to highlight four of them.

1. The Budget Committee has reduced the proposed budgets for the Integrity Commissioner and the Ombudsman. Given recent history in Toronto we should be strengthening our public accountability.

2. The budget plan will result in us replacing our current streetcar fleet with fewer vehicles. This will mean longer wait times on most routes, particularly in rush hours. Granted the vehicles will be bigger, but an empty seat isn’t much comfort if you have to wait longer for it to come.

3. The Budget Committee also decided to recommend cutting 8 planning staff positions. This would impact on the amount of heritage conservation work the City can do and the number of community based planning studies.

4. City staff have recommended that we start recovering the full cost of treating polluted water discharges from certain industries. The proposed budget rejects that approach and recommends all of us subsidize these polluters through our water bills.

The budget will reach Council for final approval at a meeting on March.

This link to the City’s budget page might be of interest:

I’ll be back in touch after the budget is approved with final thoughts.