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March 26, 2007
Toronto to work with Province to address operating budget shortfall
The introduction of Toronto’s operating budget today highlighted the need for the province to pay its agreed upon share for the provincially mandated programs the City delivers. The proposed $7.8 billion operating budget presented today noted the absence of adequate provincial funding for cost-shared programs such as shelters, child care and the cost of administering Ontario Works. The provincial funding shortfall in 2007 for these programs is $71 million. The absence of these funds has meant that Toronto’s proposed operating budget is not balanced.

Chair of the City’s Budget Committee, Councillor Shelley Carroll stated, “While we have done significant work to control costs, the impact of provincial programs on the City’s budget continues to require significant property taxpayer dollars - this fiscal issue needs to be finally resolved.”

The presentation made earlier today recommends a 3.8 per cent property tax increase plus increases in some user fees. The increases are required to deliver basic municipal services and deliver the programs and services identified as Toronto City Council’s highest priorities. As a result of the funding pressures created by provincial programs, the Toronto Government continues to rely on reserve funds as a major funding source for core municipal services. Reserve funds are not intended for this purpose and the City’s reliance on reserve funds is not sustainable.

Mayor David Miller commented on the proposed budget stating, “Simply put, the province needs to pay its bills and we will continue to work with the provincial government to ensure the province pays what everyone agrees is its share for the cost of the programs they have municipalities deliver for them.”

In reviewing the City’s proposed budget, City Manager Shirley Hoy pointed to the City’s fundamental structural financial problem that has been recognized by the Board of Trade, Conference Board of Canada and TD Bank. “There continues to be an unacceptable level of property tax revenues being diverted to fund provincial cost-shared programs at the expense of core municipal services such as roads, parks, recreation and garbage collection,” stated Hoy.

While presenting the proposed budget, Deputy City Manager and Chief Financial Officer, Joe Pennachetti stressed the need for the province to pay its share of cost-shared programs and relieve the property tax of expenses it was never designed to pay. Pennachetti stated, “The impact of funding provincial cost-shared programs combined with the City’s stagnant non-tax revenue has meant an over-reliance on one-time fixes that are not sustainable. The City’s financial circumstance demonstrates why cities need a source of revenue that grows with the economy, such as one cent of the GST.”

The budget proposed today maintains current service levels and limits budget increases in the majority of service areas to zero or less than two per cent. There are modest service enhancements valued at $14 million that focus on the City’s highest priorities.

The Toronto Government continues to participate in continuous improvement, best practice and benchmarking initiatives to control costs and has performed well in these comparisons. In addition, the City has conducted a number of program reviews to ensure the mandate and structure for service delivery is the most efficient and effective possible. City staffing numbers remain at amalgamation levels for the majority of programs, while growth has been confined to areas such as TTC, police and those cost-shared programs where service levels are mandated by the province.

For more information about the 2007 proposed Operating Budget and to see the presentation made today, visit

The 2007 Operating Budget hearings will be held by the Budget Committee for stakeholder groups and the general public on March 29 in the Council Chamber at Toronto City Hall. To make a presentation, please contact the Budget Committee at 416-392-6662.

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.

Media contacts:
Cindy Bromley, Communications Manager, 416-392-4993
Brad Ross, Manager, Strategic Communications, 416-919-6503



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