Balancing our aspirations and our books

Toronto is a creative, multicultural and thriving city. Toronto is home to 2.8 million residents and nearly 90,000 businesses – and they all use and rely on the services the City provides. Services like police, child care, transit, public parks, libraries, waste disposal; the list goes on. These programs and services are a key reason why Toronto’s always near the top of the list of most livable and business friendly cities.

Image of city map on a smartphone communicating the size of Toronto as 2.8 million residents and 90,000 businesses

Every year, the cost required to keep delivering the same day-to-day services to residents and businesses increases. On top of all of this, the City has billions of dollars of proposed new projects, like expanding transit and building new parks, which it needs to find money for.

Image listing of the core sources of rising costs to run the City of Toronto.The City's costs are rising faster than we can pay for. For example, costs are driven due to things like economic growth, labour costs of the City and its agencies, existing and new city building projects, population growth, and mandatory services that must be delivered under provincial legislation. This is a sample of cost drivers, and not a complete list.

We asked you to help the City of Toronto decide how to plan ahead, to look at your own needs and wants, but also what your neighbours, Toronto's communities, businesses and visitors need – now and in the future. We challenged Torontonians to think hard about ways the City should spend money wisely, raise revenues, manage its assets and make long-term decisions.

Image of a balance scale with aspirations on one side, weighing less than the funds required to achieve them.

We asked for your input on developing a plan to tackle some challenging questions about how the City can manage expenses, raise revenue, and make the most of our assets in order to build the city we want, and keep Toronto great.

It’s a complex balancing act.

It’s an opportunity to put Toronto on the path to financial sustainability.

It’s a chance to shape your City.

Click here to view or download the full Long-Term Financial Plan Consultations infographic

Click here to learn more about the City's Long-Term Financial Plan and finances

Click here to learn more about the City's decision-making and governance

Click here to view or download background information on the City’s decision-making processes and governance structures

Frequently Asked Questions About City Finance Management

How has the City managed to balance its budgets in the past?

Often, to balance the budget we have to defer big decisions, cut budgets, postpone investments, and use short-term bridging strategies, like borrowing from reserve funds. Balancing past budgets has also been possible thanks to things like growth in revenue from the Municipal Land Transfer Tax driven by the housing market and operating funding from other governments – both of which are not guaranteed sources of revenue in the future.

As an organization, the City of Toronto works well and it will continue to work well. However, it has been challenging for the City to keep up with closing a persistent gap between expenses and revenues.

It is important that the City develop a realistic long-term financial framework. This will require significant dialogue with the public for input, advice and feedback.

The City has been saying for years that it has a funding gap, yet every time you find the money to close the gap. What's different now?

While the City no longer relies on the previous year's surplus, many of the methods that have been used to close the gap have been short-term measures that are unsustainable. It's time to address the City's fiscal imbalance and ensure that the City has a capital plan and fiscal framework that addresses the needs of Toronto residents in the future.

Why not just approach the provincial and federal governments for more funding?

The City is looking for funding assistance from the provincial and federal governments in support of priorities set by Council. Short-term cash is not a solution to these basic gaps.

Are the City's expenses growing too rapidly?

As a whole the City's expenses have grown more slowly than the economy. Over the past six years, gross City expenditures have increased at a rate of two per cent compared to six per cent in the five years prior.

This moderate expenditure growth was achieved without significantly reducing the quality of public services and is the direct result of efficiencies that the City has achieved through line-by-line savings, program reviews, new technology and changes to collective agreements, in addition to significant benefits realized from provincial uploading and lower social assistance caseload.

If the City has managed its expenses to date, why should we worry about the future?

While the City has been able to maintain overall growth in expenses at a modest rate over the past six years, there are four relatively safe assumptions that we can make going forward:

  • The City will not be able to rely on future savings from cost-shared programs.
  • Fast growing public services and programs will continue to exert pressure in areas like water and solid waste. There will be continued pressure for congestion relief and investment in transportation, and core labour cost drivers.
  • Key agencies are grappling with cost pressures associated with retaining current service levels and in part are compensating for past underinvestment in state of good repair and capital investment. This is especially true for TTC and Toronto Community Housing Corporation.
  • We can expect that the City will need additional funding and debt service for unmet capital needs.
How does the City determine what to spend? Why does it seem we never have enough money to go around?

Governments figure out what to spend on each program and service by reviewing the current cost of a service, what future demand will be, or if there are cheaper, new or easier ways to deliver the service.

Staff and City Council also have to figure out:

  • Who will be affected if the service is changed, or if we offer more or less of the service?
  • How do other decisions, a new City priority, new laws or standards effect the service?
  • Are there other ways to deliver the same service or meet the same needs?
  • Can the budget withstand any major challenges (emergencies, loss of a partner or service provider, loss of a revenue source)?
  • Where should the money come from to cover the costs (individuals, business, reserves, etc.)?
  • Does the City need to consider charging some taxpayers less, or introduce gradual increases if will help, for example, to make it affordable for those in need or achieve other Council goals?

This information helps staff and City Council understand the financial impact of the decisions they make.

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