Brace for impact, Torontonians! Mayor Olivia Chow's debut budget hints at a potential double-digit tax hike, marking the largest single-year increase in the city's post-amalgamation history.

“Municipal staff are set to unveil the first draft of the 2024 budget on Wednesday, and as of Tuesday afternoon it included a property tax hike of just over 10 per cent, the Star has learned. 

The figure included an increase to general property tax rates, plus a previously planned 1.5 per cent for the city building fund that is dedicated to housing and transit.  

The higher taxes would raise revenue badly needed to tackle Toronto's pandemic-driven financial crisis, but is certain to provoke backlash from residents already struggling with escalating costs of living. 

The tax increase could grow larger if Prime Minister Justin Trudeau's government doesn't meet the city's request for $250 million in funding for emergency refugee shelter, a sum that's equivalent to a 6 per cent property tax increase.

Chow's office didn't directly respond to the Star's questions about the tax hike, which would be the steepest since the six municipalities that made up Metro Toronto were merged to form the new City of Toronto in 1998. But in a statement, spokesperson Arianne Robinson said the city was facing a $1.8 billion operating shortfall headed into this year. 

"Coming into office, Mayor Chow inherited a financial mess," she said. The mayor was sworn in last July. 

The new deal the city reached with the province in November "partially addresses this challenge but there's still a large gap," Robinson said. "The federal government must urgently step up and provide the shelter funding the city needs."

She added: "After years of decline, the mayor’s priority is getting the city back on track. This budget process is about starting that work."

The version of the budget to be unveiled Wednesday has been crafted by city staff with input from Chow. It will go to council's budget committee Wednesday before Chow releases her version on Feb. 1. The final council vote is slated for Feb. 14.

Robinson said Chow will participate in telephone townhalls next week and the budget she introduces next month will include "reflect what she’s heard from Torontonians."

As it stood Tuesday, the raise homeowners were facing would cost them hundreds of dollars in 2024. John Tory's final budget in 2023 -- at that point the biggest hike for modern Toronto -- increased property taxes by a total of 7 per cent, adding $233 dollars to the average bill. 

On the campaign trail last year, the go-to attack line for Chow's opponents was that the former NDP MP would impose massive tax hikes that residents couldn't afford. Chow promised only "modest" increases but never specified a number, saying she would first determine required service levels. Last week, the mayor's budget chief Shelley Carroll acknowledged this year's tax rate would be "substantial."   

Stephen Holyday, the conservative councillor for Etobicoke Centre, said residents will be "angry" at the double-digit rate hike, and it will "erode confidence in the municipal government."

He said he looked back to 1991 and couldn’t find any tax hike as large as this. It’s also more than double the Consumer Price Index. Canada's annual inflation rate is just more than 3 per cent.

The hike “is significantly higher than costs around us have risen so the city owes residents an explanation for that. Council needs to vote ‘No’ more often," Holyday said, noting that the mayor recently led council in approving a major investment in subsidized housing. 

"I don’t understand how you can increase the size and scope of government and then turn around and say we have no money," he said, adding that residents are also complaining about cost of Bloor Street bike lanes in the Kingsway and renaming Yonge-Dundas Square.

Coun. Brad Bradford (Ward 19, Beaches-East York), who ran against Chow last year, said taxes aren't the only bill residents are struggling with.

"Grocery costs are up. Prices at the pumps are up. Interest rates are up. Mortgages are up. Rent is up. The last thing we need to be doing as a  municipality is rocketing people's tax bill," he said.

Coun. Gord Perks (Ward 4, Parkdale-High Park), a veteran progressive and an ally of Chow's, said it would be a mistake to focus only on the property tax rate. 

"The City of Toronto can't be reduced to a single number," he said, arguing that creating a liveable city requires public investment. 

"People have been expressing concern about reduced transit service, litter in our parks... and a whole host of things that got worse and worse under two consecutive conservative mayors."

He said Chow's administration has to correct tax rates previous mayors have kept too low to address Toronto's needs. 

Coun. Jon Burnside (Ward 16, Don Valley East) has praised Chow's leadership during the early months of her tenure. But he predicted residents will "lose their mind" when they see the tax bill. 

Burnside said the city needs to stop providing costly services like long term care homes and shelter spaces that should fall under the jurisdiction of the provincial and federal governments. He also argued council should get out of the business of building affordable housing, which is a central part of Chow's housing plan. 

"We have to start pulling away from things," Burnside said, adding that he would move motions for those cuts as part of the 2024 budget. 

Source: https://www.thestar.com/news/gta/toronto-s-2024-budget-may-include-historic-double-digit-tax-hike/article_a093c35e-af2d-11ee-a7b7-2706a05486c7.html