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January 30, 2004
City of Toronto Responds to Budget Challenge Shortfall Highlights Gap between City's Responsibilities and Resources
  
One of the messages heard from residents at the recently held Listening to
Toronto sessions was the need for Toronto to respond to the gap between its
responsibilities and available resources by obtaining sustainable funding from
the provincial and federal governments.

The proposed 2004 budget plan announced today by Chief Administrative Officer
Shirley Hoy and Chief Financial Officer and Treasurer Joe Pennachetti notes the
need for immediate financial assistance from the province in 2004 and
highlights the case for a new deal for Toronto. The proposed budget
acknowledges the need to limit any residential tax increase to 3%.

"During the Listening to Toronto sessions residents told us a lot about what
makes Toronto a great city," said Mayor David Miller. "Residents told us to
spend for impact, protect the city and to preserve those services that assist
the most vulnerable among us. The gap between the services the City delivers
and the resources available to deliver them continues to grow - this is no
longer sustainable and we need to have a new deal now."

As the city has been required to do for the past several years since
amalgamation, the budget plan calls for the shortfall of $344 million to be
addressed through a combination of one-time strategies that are not sustainable
year-to-year. Funding city services by severely limiting required capital
spending, drawing down valuable city assets such as Toronto Hydro and asking
the province for one time relief only provides short-term fixes for chronic
funding issues.

The City is asking the province for immediate assistance to resolve 2004 budget
issues such as transit, homelessness and the needs of the City's aging
infrastructure. The City also continues to seek a permanent solution.
Year-to-year funding has not provided the tools the City needs to manage growth
and maintain City assets.

"There is a great deal the province and the federal government can do to assist
our City close the gap," said Councillor David Soknacki, Chair of the Budget
Advisory Committee. "The City will continue to work with the province to
resolve the issue - but we need a down payment on the new deal now. The
province can change Bill 140 and give Toronto access to the entire tax-base,
removing the burden of placing any increases solely on the residential
taxpayer."

The recently held Mayors' Summit proposed several options for the federal
government to immediately assist Cities including:

1. Rebating 100% of the GST paid by municipalities and their agencies
2. Accelerating the $2 billion investment in urban infrastructure through
existing programs
3. Providing cities with a new net revenue source, based on the user-pay
principle, of five cents per liter from the existing federal fuel excise tax.

Council will now begin to review the proposed budget and consider further input
and options. Public deputations are scheduled for Toronto City Council
Committees and will run from February 2- 6. Standing Committee reviews begin
the week of February 9. Council will begin finalizing the 2004 budget on April
19. Final approval of the capital and operating budgets is scheduled for late
April.

For more information on the 2004 City Budget and the Mayors' Summit, go to the
City of Toronto Web site, http://www.toronto.ca.

Media contacts:
Kevin Sack, Corporate Communications, 416-397-5277
Andrea Addario, Mayor's Office, 416-338-7119
Linda Robinson, Corporate Communications, 416-397-0255
Cindy Bromley, Finance Department, 416-392-4993



 

 

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