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December 6, 2004
Core services, clean streets, and parks and recreation given top priority in 2005 City of Toronto budget launch
The City of Toronto's proposed 2005 budget, presented this morning at a special
joint meeting of the Budget Advisory Committee and the Policy and Finance
Committee, highlights the need to invest in priority areas such as core
services, the clean and beautiful city initiative, and Toronto's parks.

The recommended budget includes $16 million in new and enhanced services for
the cost of the first phase of the TTC ridership growth strategy and the second
phase of the clean and beautiful city program. It also takes into account the
full $92 million available to the City from the provincial gas tax and $105
million from hydro revenue.

Toronto Mayor David Miller said, "We have come a long way in reaching a New
Deal with the provincial and federal governments - they understand the benefit
of investing in cities. But there remains more to be done if we are to deliver
on the priorities residents identified at the Listening to Toronto
consultations we've held this year. To solve our structural deficit Toronto
needs revenues that grow with the economy."

Budget Chair Councillor David Soknacki said, "The cost of inflation means that
every year Toronto must find at least $140 million more than the previous year
to maintain the status quo. This is a systemic deficit we face each year,
while Toronto's revenues remain flat."

The City has started to realize the benefits of the transition to the New Deal
with the provincial and federal government. The GST rebate, the review of the
City of Toronto Act, the recent down payment on the provincial gas tax, the
tripartite five-year funding plan for the TTC, and the anticipated federal
revenue from the gas tax have all helped Toronto.

Chief Administrative Officer Shirley Hoy said, "For several years the City has
had to divert a portion of its municipal tax dollars to deliver provincially
mandated programs instead of core City services. The New Deal with the federal
and provincial governments will allow the City to re-allocate municipal tax
revenue to core services and priorities."

Chief Financial Officer and Treasurer Joe Pennachetti said, "The challenge of
funding transit, emergency services, provincially mandated programs where
funding has been capped, and the cost of servicing the debt continues to place
the greatest pressure on the City budget."

In 2004, 75% of tax dollars were spent on police, fire, shelter/housing, debt
charges, social services, TTC, transportation and parks and recreation.

The proposed budget suggests an approximate 3% residential property tax
increase and a 1.5% commercial/industrial property tax increase.

An operating budget gap of $91million remains. Further efficiencies, service
level changes, and other policy revenue changes will be required to meet the

Budget Chair Soknacki said, "Councillors will need to examine all possible ways
of closing the budget shortfall, including reductions to service, increases to
user fees beyond those already recommended for 2005, TTC fare increases, and
changes to policy that will allow access to other revenues or major program

The total recommended capital budget is $1.1 billion, including $430 million
for TTC and $301 million for the Works and Emergency Services Department.
Capital requirements will be funded from a combination of provincial and
federal funding for TTC, current revenues and new debt issuance of $492 million.

Council will now begin to review the proposed budget and consider further input
and options. Toronto City Council Standing Committee reviews begin December 7
and deputations to Committees begin January 4, 2005.

Council will begin finalizing the 2005 budget on February 21, 2005.

For more information on the 2005 City Budget, visit the City of Toronto Web

Media contacts:

Patchen Barss, Communications, Mayor's Office, 416-338-7134, cell 416-527-3486
Paul Ainslie, Councillor Soknacki's Office, 416-392-4007
Kevin Sack, Corporate Communications, 416-397-5277
Cindy Bromley, Finance Department, 416-392-4993



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