People walk in front of Toronto City Hall. (Chris Kitching/CP24)

City staff are recommending a two per cent property tax hike as part of the 2020 budget, a move that will cost the average homeowner an additional $106 when coupled with a previously approved increase to Mayor John Tory’s city building levy.

The inflation-based tax hike, which is expected to raise an additional $63 million, was included in the $13.53 billion staff-proposed operating budget that was presented to the city’s budget committee for the first time on Friday morning.

The increase will only cost the average homeowner an additional $61 in 2020 but that number goes up to $106 when you factor in a 1.5 per cent increase to the city building levy, which was approved by council last month.

All told, the various increases combined with policy-related adjustments translate into a 4.24 per cent tax hike in 2020, pushing the bill on a home with an assessed value of around $703,000 to $3,141.

“Because our level of government undertakes a very public budget exercise there are those that will suggest that council would like to raise taxes incredibly high and there will be others who suggest that we are spending far too much and that we should be slashing services but I believe that this budget charts a responsible path forward,” Budget Chief Gary Crawford told reporters on Friday. “It strikes an important balance that protects services, invests in key services and keeps property tax increases to fund the operating budget at the rate of inflation.”

$77 million shortfall

The budget is balanced, in part, on the assumption that the federal government will provide the city with $77 million in new funding to offset the cost of resettling refugees.

That money has not been promised or even formally requested at this point, but Crawford said that he is confident that the feds will come forward given that they did eventually accede to the city’s request for $45 million in funding to resettle refugees in 2019.

If the money doesn’t materialize, however, he said that the city has $93 million in reserves that it can draw on to cover the shortfall.

“I am encouraged from what they did last year that they will actually come to the table with that $77 million,” Crawford said.

Money to hire additional cops and paramedics

Staff contend that the budget “preserves services” while making $67 million in new or enhanced investments in priority areas.

Those investments include millions that have been set aside to hire more than 300 police officers, 62 paramedics and 121 TTC operators.

There is also $18.6 million in new funding for poverty reduction efforts and various initiatives to reduce the root causes of violence.

Mayor John Tory, however, said in a statement that he will be “leading an effort to ensure that we find a way to make additional investments in kids and families.”

“I firmly believe that we must go further in investing in kids and families, especially as it relates to the threat posed by escalating gun violence,” he said.

Per capita spending down for third straight year

The $13.53 billion operating budget proposed by staff is a slight increase on the $13.46 billion operating budget passed by council in 2019 but given the rise in population over the last year, it is essentially a reduction.

In fact, the per resident spending adjusted for inflation in 2020 would decrease for the third year in a row, going from $4,349 in 2019 to $4,344 in 2020.

The city’s property taxes are also likely to remain among the lowest in the GTA despite the proposed increase, prompting some councillors on Friday to call for the need for additional revenue sources.

In 2019, the average property tax bill in the city with the separate charge for solid waste services added on was lower than every GTA municipality with the exception of Milton, Burlington, Georgina and Brock.

“You have got to think about the city you want to live in. You have got to think about the services the city provides and whether you think they are good enough,” University-Rosedale Coun. Mike Layton told reporters. “If you compare us to other jurisdictions we do have lower taxes but are our services to the standard that you would want? Are our are roads safe? If you look at our last year no they are not. Are we doing all we can to fight climate change? We are doing some stuff but we could be doing better. Are we taking care of those who are the least fortunate?. I think if you walk through downtown Toronto these days you would probably say we are coming up short.”

In the absence of a higher tax increase to address rising costs, the budget draws on $32 million in additional revenue from a previously announced plan to hike TTC fares and $25 million from the phase out the solid waste rebates given to residents with smaller bins.

Staff say that they have also found $51 million in efficiencies following a third-party audit of the city’s books that was funded by the province.