Toronto 2018 budget: city council approves 2.1% property tax hike

Toronto city council rejected a push to increase residential property taxes on Monday, opting instead to lean heavily on the proceeds of home sales.

City council voted 31-11 in favour of a 2.1 per cent residential property tax hike, meaning the average homeowner will pay about $81 more this year. The total increase is actually 2.9 per cent, once the city building fund is factored in.

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Councillors shot down motions to increase the rate to 2.9 per cent, recommended by Coun. Mike Layton, four per cent, moved by Coun. Gord Perks, and one to completely freeze it, put forward by Coun. Giorgio Mammoliti.

Mayor John Tory told reporters that 2.1 per cent rate hits the "right spot."

For Tory, keeping property tax at the rate of inflation was a campaign promise, although it's unclear if that will form part of his re-election campaign.

"I think you take these things one year at a time," he said.

Tory was also asked about the city's reliance on the Municipal Land Transfer Tax (MLTT), which brought in some $800 million this year. The mayor said January's numbers show the MLTT revenues are "exactly on budget" but did note the city will continue to monitor it.

Council could face tough choices in future budgets

Several councillors asked questions about the city's contingency plans if MLTT proceeds dip, and were told there's little in place. Coun. John Campbell said he's "concerned" that will happen and that when it does the city will have to decide between cutting services and raising taxes.

"City council is going to have a day of reckoning," he said. 

Coun. Janet Davis, meanwhile, warned the city isn't putting the money toward the service plans it's developed. "We have to step up," she said, taking a swipe at council colleagues who she says are against raising taxes but still want the services they pay for.

Coun. Sarah Doucette blasted the budget as a "band-aid," and an "unsustainable" one at that. She challenged council to go about the process in a different way next year, by asking residents what they want the city to provide and figuring out a tax rate that can pay for that.

But Coun. Michael Thompson said during his constituent meetings he didn't hear from a single person who was OK with paying more for city services. Instead, he said, he kept hearing: "don't raise my taxes."