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February 10, 2006
Reductions to City Budget continue as Toronto forced to pay for provincial programs
Toronto's budget advisory committee today continued to make reductions in City spending to reduce the operating budget shortfall caused by the rising cost of delivering provincially required programs. The committee is recommending that enhanced bylaw enforcement and improvements to city facilities, sidewalks and roads that are needed to manage growth continue to be deferred. Important parts of the Clean and Beautiful City program set for 2006 will be deferred. Budget committee has also directed a hiring freeze and requested all City operations to consider further reductions in programs.

If the province paid for its programs, the City could pay for its services and manage the budget without having to seek provincial assistance. However, even with the savings found to date, there are no cuts available that would both meet the $532 million shortfall and still pay the cost of provincial programs. Torontonians have already paid for these programs through provincial income taxes and should not have to pay for them again through property taxes.

"Budget committee has reviewed budgets with the goal of reducing costs wherever possible and still maintain important City services," said Councillor David Soknacki, Chair of the Committee. "The City will continue to do its part to be as efficient as possible but the province needs to pay its bills - not the residents of Toronto," said Soknacki.

"Toronto residents expect their property tax dollars to go for the delivery of City services, not provincially downloaded programs," said Toronto Mayor David Miller. "When user fees or taxes increase, residents should get improvements to City services - instead we continue to be saddled with the costs downloaded to Toronto by the previous provincial government," said Miller.

The cost of such programs, particularly the cost of paying for the Ontario Disability and Drug Benefit ($167 million) and the underfunded costs of providing provincial social services ($59 million), has had significant impact on City services. The absence of provincial funding for transit operations, which was cost-shared prior to amalgamation, now costs the City an additional $180 million per year. Gas tax funding from the federal and provincial governments has helped the City maintain capital equipment - not the day-to-day operations of the transit system.

Mayor Miller has recommended a five-year plan to the province to finally resolve what has become an unsustainable fiscal issue. The plan would see Toronto freeze spending for two years while the province would:
  • resume funding of the social assistance and drug benefit programs that were downloaded to Toronto
  • resume the shared operating budget funding that was provided to the TTC
  • provide the city with revenues that grow with the economy.

More than 60 per cent of the property taxes paid by average homeowners go toward providing critical City services such as police, fire, emergency medical services, the TTC, garbage collection and recycling, libraries, parks and roads. However, property taxpayers are still required to pay for programs that were downloaded by the Province without adequate funding. Provincial programs such as social housing, disability payments and other income support programs make up about 35 per cent of costs to be funded by the property tax base. The City of Toronto, like other major municipalities, believes that such programs should be properly supported by the Province through income tax.

Media contact:

Don Wanagas
Communications Director
Office of Mayor David Miller

Kevin Sack
Corporate Communications and Media Services



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