Archived columns and blog posts by Matt Elliott

Toronto's 2015 budget will be Mayor John Tory first real test

The honeymoon period for Mayor John Tory ends this week, when he runs headlong into the first serious obstacle of his term: the city’s 2015 budget.

And I’m pretty jazzed about it.

Sure, I know, the municipal budget doesn’t sound exciting, but it matters. All of the stuff we read over the course of the year about the city improving transit, repairing infrastructure or helping the homeless won’t add up to anything if the city doesn’t actually put money behind those plans through the budget.

Bad budgeting is why we too often hear about big, ambitious city plans that under-deliver — or never happen at all.

The first phase of the budget begins this Tuesday, when city staff unveil their recommendations. This will kick off a lengthy process of public consultations and committee meetings, during which councillors will propose amendments. The whole thing will conclude in March, when council meets to confirm the final version.

This budget looks like a tough one. In contrast to the previous mayor — what was his name again? — who walked into office in 2010 with a $346-million surplus, Tory didn’t inherit a windfall. A report released by the city’s finance department in the fall projected the 2014 surplus at $98.4 million.

That means Tory doesn’t have an easy out. The city operating budget has to be completely balanced by law, so he can’t push to carry a deficit like the provincial and federal governments have been known to do. And the available surplus dollars from last year won’t be enough to cover the gap as the cost of running the city goes up.

This year’s budget gap, which will need to be filled with some combination of taxes, program fee hikes, TTC fare increases, cuts and other savings, was estimated last year at about $452 million, though I suspect the final figure will be a bit lower.

So what’s a new mayor to do? Tory, maybe foolishly, painted himself into a corner during the campaign with tough-talk rhetoric about keeping property tax revenue increases at or below the rate of inflation. That takes a really powerful tool out of his toolbox.

That’s the thing to watch: How serious is Tory about keeping his election pledge on taxes?

Will he stick with it, even if it means convincing council to balance the budget with things that can disproportionately affect the city’s low-income population, such as user fees and TTC fare hikes?

Will he throw caution to the wind and advocate for a greater reliance on revenue from the city’s land transfer tax, knowing that even a minor real estate slowdown could leave the city in a serious fiscal crunch?

Or will he, and council, find another way — even if it means breaking a campaign promise?

This post was originally published at on 2015-01-19T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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