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January 8, 2002
Maintaining existing programs, managing the city's debt, keeping taxes down and increased accountability are key components of Toronto's 2002 budget
Maintaining existing programs, managing debt, keeping taxes down and the
continued implementation of cost saving and accountability measures were the
key components of the City's 2002 Budget recommended today by City of Toronto
Chief Administrative Officer (CAO) and Acting Chief Financial Officer, Shirley

"These are the priorities I outlined four months ago," said Mayor Mel Lastman.
"I look forward to working with Council to ensure Toronto's future is secure,"
the Mayor stated.

"The 2002 budget reflects a significant change from last year." said City of
Toronto Budget Chair Councillor David Shiner. "It focuses on efficiencies and
accountability. Staff have worked hard to prepare a budget which balances the
priorities of required capital programs to ensure the maintenance of our
infrastructure and still maintain our day-to-day operations," stated Councillor
David Shiner.

While the $6.4 billion operating budget includes a potential 4.8% tax increase
for 2002 Hoy stated that, "this was the result of the provincial requirement
that Toronto only apply tax increases on homeowners and not the business tax
base." The recommended increase in taxes paid by homeowners would be reduced
to 1.7%, less than the rate of inflation, if the City had the ability to
consider the commercial/industrial sector when considering an increase in
municipal taxes. While other municipalities ensure fairness by applying tax
increases across the board, Toronto is forced by the provincial government to
provide the business sector with a 0% tax increase again this year.

The CAO outlined the need for the City to work with the provincial and federal
governments to obtain reliable and ongoing funding to help support transit
infrastructure, social housing and service to the homeless. The on-going impact
of downloading from the province (recently confirmed by the provincial auditor)
continues to cost Toronto taxpayers millions of dollars. "This year's
recommended budget provides for services to be delivered at the level approved
by Council in 2001 and contains no new programs or services while tightly
controlling the amount of any new debt the city will take-on in 2002," added
the CAO.

Municipal taxes still account for only 5.1% of the total taxes paid by an
Ontario family while the remaining 94.9% of taxes are sent to other levels of

In recommending a $942 million capital program for the City in 2002 the Chief
Administrative Officer noted that the amount of debt the City was adding each
year was not sustainable. Therefore, a full review of all capital programs was
undertaken to ensure that any new debt the City decides to take-on is in step
with the priorities for capital projects established by Council.

Requests for the funding of new services have been placed in a separate
decision package for the consideration of Council. Funding of new services will
require a reduction or elimination of a service in the base budget or
consideration of additional tax increases.

Council will begin examining the budget on January 8 and Standing Committee
reviews will begin the week of January 14. This is scheduled to culminate in
Council's approval of the capital and operating budgets in March, 2002.

The City of Toronto Web site, will have
information about the budget, click on the City Budget 2002 link.

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