East Toronto councillors have mixed reaction to approval of city budget, 9.5 per cent property tax hike
By AMARACHI AMADIKE, Local Journalism Initiative Reporter
Toronto Council approved Mayor Olivia Chow’s official 2024 budget on Wednesday, Feb. 14, an event that marks the city’s largest tax increase since 1998.
Originally presented as a double-digit tax hike, councillors settled for a 9.5 percent total residential tax increase after a decision was made to dip into the city’s reserves in attempts to close a $1.8 billion budget deficit.
“We are finally having Toronto back on track, even though we inherited a huge $1.8-billion financial mess,” said Chow during a post council meeting media scrum.
With an 18-8 vote in favour of Chow’s budget, most councillors were in good spirits as they envisioned a better functioning Toronto as a result of 2024’s budget process which saw a large number of public consultations across the city.
“I’m proud to have supported the budget’s game-changing investments in housing, transit and other critical services to help get us back on track after years of decline,” said Toronto-Danforth Councillor Paula Fletcher who took to X (formerly Twitter) in celebration of the approved budget.
Not all East Toronto councillors shared Fletcher’s enthusiasm, however.
During yesterday’s meeting, Beaches-East York Councillor Brad Bradford attempted to make last-minute changes as he proposed an increase in tax breaks for small businesses in the city.
With Bradford introducing the Small Business Property Tax Subclass in 2021 under former Mayor John Tory – a move that resulted in the current 15 per cent small business property tax cut – the Beaches-East York councillor attempted to double down on his past success by recommending Toronto Council further increase the small business tax cut to 25 per cent in light of sustained struggles being experienced by many business owners following the COVID-19 pandemic.
“It’s no secret that small businesses are really struggling right now”, Bradford told Beach Metro Community News. “In some respects, it’s more difficult today than it has been over the past four years.”
Bradford said this struggle is due to a lack of funding to continue supporting small businesses in the manner the City of Toronto was able to during the height of the pandemic. With the city having exhausted pandemic relief funds, many businesses have been forced to shut down, he said.
However, with Bradord’s proposal coming in at the closing stages of the budget proceedings, it was seen by the majority of councillors as just another hurdle in the way of the city’s efforts to close the $1.8 billion opening budget pressure and it was shut down by a 22-4 vote against the small business tax cut.
Bradford said he blamed the timing of his proposal on the fact that the revised budget wasn’t presented by Chow until Feb. 1.
“When I went through it, I noticed that there’s not a single sentence about small business, the economy and how we’re responding to challenges that entrepreneurs are facing right now,” he said.
Bradford hoped that the small business tax cut would be offset by a one per cent tax increase to larger commercial businesses.
According to a representative of his office, city staff had confirmed that the reduction for small business can be offset by an additional property tax rate increase of 1.63 per cent for the remainder of the commercial property tax class. This includes the big office towers, big box stores and shopping malls.
Some councillors, however, questioned the motives behind Bradford’s motion as it is widely believed that most small business owners are renters and not landlords. This would mean that any positive impact from an increased tax break on small businesses would be felt by the building owners and not the actual business owners.
But Bradford said that “in the vast majority of commercial real estate leases”, the tenant (business owner) is under a Triple Net Lease which means the tenant is responsible for payment of the taxes, maintenance, and insurance.
“About 85 per cent of commercial leases in Toronto are Triple Net leases,” said Bradford. “This means that for 85 per cent of small businesses, this tax relief would go to them.”
Although Bradford described the motion as “revenue neutral” during the Feb. 14 budget meeting, Parkdale-High Park Councillor Gordon Perks criticized it with claims that it is the opposite of that. He cited past struggles the city had after trying to increase taxes on larger commercial property owners. According to Perks, a multitude of lawsuits, which cost the city millions, accompanied their last attempt at generating funds in this manner.
Bradford wasn’t the only councillor to see changes to the budget denied by Toronto Council on Wednesday.
A separate motion by Etobicoke North Councillor Vincent Crisanti which recommended a one per cent reduction on the property tax increase by using another $42.2 million from Tax Stabilization Reserve Fund also failed to garner support and was defeated in a 20-6 vote against the proposal.
Although Crisanti and Bradford saw their motions shut down, Etobicoke-Lakeshore Councillor Amber Morley saw her motion to increase Toronto police’s $1.2 billion operating budget by another $12.6 million pass with a 21-5 vote.
According to Toronto Chief Financial Officer Stephen Conforti, this will be financed through city reserves which staff is expecting will be replenished “with any emerging funding programs from the federal and provincial government.”
However, the provincial and federal government’s exact level of commitment to replace these funds is still unclear. “As to precisely how much, I do not know,” said Chow during Wednesday’s budget meeting.
Following the final budget meeting and approval by council members, the City of Toronto officially has a $17.1 billion operating budget and a 2024-2033 capital budget of $49.8 billion.
– Amarachi Amadike is a Local Journalism Initiative Reporter for Beach Metro Community News. His reporting is funded by the Government of Canada through its Local Journalism Initiative.
