Dear residents,
This week, Council adopted the Mayor’s 2025 City budget with a 6.9% total increase to property taxes this year.
This budget was a tough one. As a member of the Budget Committee I took part in the deep engagement the City did with Torontonians, including hearing your presentations at the Etobicoke Civic Centre.
Our level of government is closest to you. When you walk safely on sidewalks, when you turn on your tap and get clean water, when your garbage is picked up regularly – these are the City services that you benefit from every day, and that make this such a great and valuable city to live in.
We are only able to do this work together. We’re asking you to do more, and we as a City need to deliver the service levels you need and deserve. This budget includes increases in critical areas – including a TTC fare freeze, investment in Vision Zero road safety, and expanded access to libraries and recreation centres – and I am committed to holding the City accountable to our service standards.
The City is not immune to cost increases. The pressures that households across Toronto are experiencing are the same pressures we’re experiencing as a city.
I know we would all like to see a lower increase to property taxes. I truly believe that this budget strikes an important balance between meeting appropriate service levels and maintaining affordability.
I want to thank my colleagues on Council and on the Budget Committee, Mayor Chow, and our City staff who have worked collaboratively to shape the work that we will advance together over the coming year.
Most importantly – I want to thank each and every one of you for contributing to a City we can all be proud of.
Yours in community service,
Amber Morley
City Councillor, Ward 3, Etobicoke-Lakeshore
2025 Budget Adopted by Council
At the February City Council Budget meeting on February 11, 2024, the Mayor’s proposed budget was deemed adopted with amendments from Councillors. This budget maintains current service levels and includes important investments in services and programs that advance housing, transit and community safety. We’re building off successes we’ve seen from investments made in the 2024 Budget and incorporating priorities highlighted by residents through the public consultation process. Read more here.
City services impact your life every day. Each time you visit a recreation centre, borrow a book from the library, have your garbage or recycling picked up, drink clean water from the tap, ride the TTC or have emergency services rush to your aid – you are using a City of Toronto service. That’s why the City’s budget is so important – it’s about setting our collective goals and building a great city. It determines the level of service provided to Toronto residents and guides decisions on what city infrastructure will be purchased, built and repaired.
As part of the City’s annual budget process, Divisions and Agencies submit their initial budget pressures for the upcoming year, along with preliminary balancing actions. To ensure a fiscally responsible and balanced budget, staff collaborate to conduct additional reviews and identify further opportunities for reductions and offsets. The 2025 Operating Budget identifies a total of $680 million in various reductions and offsets. You can read more here.
New + Enhanced Services in the 2025 Budget
The 2025 Budget continues to tackle a decade of underinvestment in critical services that support a growing city. This includes freezing TTC fares while improving TTC services, building more homes 80% faster, helping renters fight illegal evictions, feeding more kids, making our city safer with more first responders to reduce wait times, and expanding hours for libraries, pools, and City services.
For the first time in generations, Toronto is back in the housing business. The City is supporting 18 not-for-profit rental housing projects. 6,000 new affordable homes will start construction soon. 8,000 rental homes will be waiving development charges and lowering the cost of building. Thousands of homes will be affordable forever as we help tenants face down demovictions and turn their housing into affordable cooperatives, land trusts, or other forms of co-ownership and joint management. We’re investing more in shelters, the rent bank, and tenant support teams to keep people housed and inside off the cold streets.
Understanding Property Taxes
The rising costs of service delivery and demands on a rapidly growing city require funding to ensure that critical services remain sustainable and that Toronto can continue to thrive. City Council has approved an increase of 6.9% in property taxes for the 2025 fiscal year, which includes a 5.4% residential property tax increase and 1.5% increase to the City Building Fund.
This increase is intended to balance the city’s financial needs in areas such as housing, transit, public safety, parks and recreation, transportation, community programs, and more. The increase impacts all residents, whether homeowners, renters or commercial businesses and is a necessary step to maintain the city’s fiscal health and meet growing demands for services amid inflationary pressures and increasing operational costs. The decision reflects a careful approach to budgeting, aiming to minimize the impact on Toronto residents while ensuring the city can meet its obligations, get back on track, and invest in future state-of-good-repair.
For every tax dollar paid in Canada, municipalities only receive 9 cents. Toronto operates the largest public transit system in Canada, employs over 13,400 positions across four emergency services, and operates approximately 50% of Ontario's shelter beds – all with one of the lowest property tax rates in Ontario.
It should be noted that municipalities in Ontario, including Toronto, have few options for raising revenues, which can create challenges when it comes to funding public services and infrastructure. Unlike provincial or federal governments, cities have limited taxing powers and rely primarily on property taxes, user fees, and grants from higher levels of government. Municipalities also face restrictions on our ability to introduce new taxes or significantly raise existing ones without approval from higher levels of government. This limited financial flexibility means that municipalities must carefully prioritize spending, often making tough choices between competing needs, and are vulnerable to fluctuations in revenue from sources like provincial funding or development charges.
This lack of available revenue tools underscores the importance of advocacy for increased financial autonomy to better meet the needs of our growing city. A cornerstone of our long-term financial plan is working with other orders of Government to address the inherent structural deficit in our financial framework.
Legally, Municipalities Cannot Run A Deficit
As a municipality, Toronto is legally required to balance its budget each year, meaning the city cannot run a deficit. This requirement is enshrined in the Municipal Act, which mandates that municipalities in Ontario must ensure their expenses do not exceed their revenues. Unlike provincial or federal governments, which can carry deficits and borrow to cover shortfalls, Toronto must manage its finances within its means.
If the city faces a shortfall, it must find ways to either reduce spending, increase revenues (such as through property taxes or user fees), or tap into reserve funds, but it cannot operate with a negative budget. This fiscal constraint ensures that the city maintains its financial stability and protects taxpayers from the risks associated with long-term debt accumulation, making careful financial planning and budget management essential for Toronto’s continued growth.
