Toronto homeowners will face a 3.58 per cent property tax hike this year, which works out to an extra $104 on an average property with an assessed value of $665,605.

City council voted 21-4 on Thursday in favour of 2.55 per cent property tax hike for 2019, but that will be bumped up to 3.58 per cent with the addition of the annual levy for Mayor John Tory’s previously approved city building funds.

Some councillors did move motions to pass even higher tax hikes on Thursday to fund a hodgepodge of priority areas but all of those motions were defeated.

Coun. Mike Layton moved a motion calling for taxes to be increased an additional 0.82 per cent in order to raise an extra $25 million that would have allowed the TTC to scrap a planned 10 cent fare hike but it was defeated 18-7. He also moved a motion calling for an additional 0.161 per cent tax hike to raise $4.2 million that could be put towards subsidies for child care but that motion was also defeated.

The effort to increase property taxes above and beyond the 2.55 per cent hike favoured by Mayor John Tory came in the wake of Ryerson University releasing a study last week which suggested that the city has among the lowest property tax rates in the entire Greater Toronto and Hamilton Area. That study concluded that Toronto’s property taxes could go up by 20 per cent and the city would still be in the bottom half of GTHA municipalities when it comes to its residential tax rate.

“When we talk about affordability, that seems to be talked about a lot these days, you have to look at who this budget is affordable for,” Layton told CP24 earlier on Thursday. “You see above inflationary increases in fees related to rec services for youth, for seniors and we are also seeing a significant increase in the transit fare. It is $50 a year more per rider on top of already a $400 increase over the last decade. So we are balancing the budget but who are we balancing it on and whose affordability are we really focusing on?”

In addition to the inflationary tax hike, the budget also includes a three per cent water rate increase as well as a 2.2 per cent increase on garbage collection rates. The water rate hike will cost the average household an additional $27 per year while the garbage collection rate hike will cost homeowners an additional $5 to $10 per year, depending on the size of their bins.

Budget has multi-million-dollar shortfall

The $13.46 billion operating budget, which was approved by city council on Thursday night, is balanced in part on the assumption that the federal government will accede to the city’s request for $45 million in funding to help offset the costs of resettling refugees in the city.

That money, however, has not been formally conveyed.

The federal government has promised $114.7-million in additional funding to help cover costs related to housing asylum seekers nationwide but is unclear how much of that money Toronto would receive and when the city would get it.

While some councillors have said that the budget is not balanced and that a higher tax increase might be necessary to fill the shortfall and properly fund services, Mayor John Tory has objected to that assessment.

He told reporters on Thursday morning that he has been in touch on a “repeated and continued basis” with federal ministers, including Prime Minister Justin Trudeau, and remains “optimistic” that the city will receive the money it is requesting sometime in 2019.

“If it was a closed discussion and they said that the $26 million that we have (already) received is all you are going to get, of course we would be handling this somewhat differently. But it is an ongoing discussion and every assurance that I have received is one that has led me to be optimistic about the outcome,” he said. “So I do think it is entirely appropriate for us to handle this the way we have, which is with the expectation that the federal government will recognize, as they have in the past, their obligation to assist us in material way with the cost of looking after asylum claimants and refugees.”

Drop in land transfer revenue made for challenging budget cycle

Speaking with reporters at city hall earlier in the day, Tory said that this was an “incredibly challenging budget year” due to a shortfall of $80 million in expected land transfer tax revenue in 2018 that was the result of a slowing housing market.

He said that he is proud of the fact that staff managed to prepare a budget that “preserves and protects every single city service” while keeping the tax hike to around the rate of inflation.

“You never are going to have all the money you need. Just like every household and every business there is a long list of things you want to do and that you would like to do and we have many challenges facing what is otherwise a very successful city. But I will just say to you that a large part of my efforts, I think successfully so, have been devoted to making sure the other governments form better partnerships with us that have them contributing more,” he said. “The bottom line that I have made very clear, and I think the vast majority of people agree with me, is that the solution is not going to come from asking property taxpayers to take on the whole burden of addressing some of these issues.”

The proposed budget provides $162 million in additional funding to the TTC to speed up work on the relief subway line as well as a $30 million increase in funding to the Toronto Police Service. That money will be used, in part, to hire 300 new uniformed officers, 122 special constables and 186 part-time retirees.