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August 22, 2007
Media Advisory Cutting capital budget will not solve 2008 operating budget shortfall
A column published in the August 17 edition of the York Guardian newspaper and other Toronto Community News publications by David Soknacki (“Apocalyptic visions for city”) incorrectly asserts that the proposed new Land Transfer Tax and Personal Vehicle Registration fee will be used to pay for capital budget expenditures.

Funding from the new revenue sources, if approved, will support City operations. The day-to-day operation of City services is paid for from the City’s operating budget - the money dedicated to salaries and operating expenses such as rent, fuel, electricity, equipment, etc. The City, like everyone else, must pay the increased costs of fuel and electricity and other services when these costs rise.

The projects cited by Mr. Soknacki were approved by City Council in 2007 as part of its capital budget deliberations, for which it has a five-year plan, also approved by Council. The City’s financial difficulties have to do with its operating budget - with a projected shortfall next year of $575 million. The City cannot, by law, run an operating budget deficit.

Capital funding, however, is much different. The City borrows money to pay for capital projects such as roads, bridges, buildings and other facilities with long-term funding requirements. Even if the projects cited by Mr. Soknacki were cancelled, this would not solve the City’s 2008 operating budget shortfall.

With respect to the City’s new garbage containers and 70 per cent waste diversion plan, property taxes will not bear those costs. Residents will begin paying for curbside collection directly next year, based on the size of garbage container they opt for.

Toronto is Canada’s largest city and sixth largest government, and home to a diverse population of about 2.6 million people. It is the economic engine of Canada and one of the greenest and most creative cities in North America. In the past three years Toronto has won more than 50 awards for quality and innovation in delivering public services. Toronto’s government is dedicated to prosperity, opportunity and liveability for all its residents.

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Media contact:
Kevin Sack
Director, Strategic Communications Division



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