A new report from the University of Toronto suggests that while the city does not have a "spending problem," it will be facing a major infrastructure funding shortfall in the coming years.

In one of a series of “pre-election” papers on issues facing the City of Toronto, the university’s Institute on Municipal Finance and Governance says that $2.5 billion will be needed by 2020 to maintain existing assets in a state of good repair.

That includes transportation infrastructure and Toronto Community Housing, which alone is reporting $860 million in unfunded repair bills.

The city’s primary source of revenue comes from property taxes, which are relatively low, and if a new revenue source is not found, according to the report, there will be no funding available for big future infrastructure projects, including transit projects such as the downtown relief line.

Another issue identified by the report is the uncertainty surrounding provincial and federal transfers, which reportedly represent about one third of planned infrastructure spending.

While some have suggested that the city has a “spending problem,” the report counters that notion, claiming that there is little room to find efficiencies without reducing services. The types of services offered and the associated costs, according to the report, are in line with most cities in other areas.

“(The) city’s fiscal health is sound by most measures, but it faces cost pressures and its aging infrastructure and investment needs present a huge financial challenge," the report concludes.

Councillors reacted to the report saying that additional revenue tools may need to be found to make up for funding shortfalls.

“In terms of the property taxes, the capacity to raise enough money to have a substantial impact is fairly limited,” said Coun. Denzil Minnan-Wong.

Toronto Mayor Rob Ford released a statement Wednesday taking credit for the financial health of the city.

"The reality is, my administration brought the City of Toronto back from the edge of a fiscal cliff," said Ford.

"While we have slowed down the out-of-control spending to keep taxes low and keep our city affordable, I still firmly believe that there are millions of dollars in further waste and efficiencies that we can find." 

Coun. Paula Fletcher said the report has finally brought the real issues facing the city to the forefront.

"The mayor has been saying we have a spending problem, that we spend like drunken sailors," Fletcher said. 

"U of T is … one of the most prestigious universities in the world. They are letting us know that we actually are having a bit of a revenue problem when it comes to infrastructure."