Toronto
reduces services now to lower next year's
operating budget shortfall.
News Release
August 10, 2007
Toronto reduces services now to lower next year's operating budget
shortfall Without new revenues 2008 will require further service
reductions and/or significant tax increases
The City of Toronto today announced cost-containment measures that will
require immediate service-level adjustments and reduce the 2008 operating
budget shortfall by at least $83 million.
As part of the cost-containment process requested by Mayor David Miller
last month, City Manager Shirley Hoy and her management team have
identified more than $34 million in operating budget reductions that will
be put in place for the remainder of 2007. These measures include the
Monday closure of all City Community Centres from mid-September until the
end of the year, reduced library hours, delayed opening of outdoor
artificial ice rinks, reduced pickup of yard waste and leaves,
cancellation of planned door-to-door waste pickup at townhouses,
reductions in snow removal services and litter pickup, reduced maintenance
of City parks and trees, reductions in bylaw enforcement and building
inspections, and early closure of all municipal golf courses.
City Manager Shirley Hoy recommends that these immediate measures be
continued next year to reduce the forecasted 2008 operating budget
shortfall of $575 million by at least $83 million.
"The measures taken today are necessary to address the impact of not
having the revenues required to provide basic municipal services,"
said City Manager Shirley Hoy. "The solution to the City's financial
challenges must include three strategies: the Province of Ontario should
pay the true cost of their programs, the Province should resume permanent
operating budget support for the TTC and the City must obtain new and
diverse sources of revenues."
The measures announced today include both the cost-containment initiatives
announced last month (such as a hiring freeze and the elimination of
discretionary spending) and service level adjustments (see backgrounder)
to be implemented immediately. All of these measures are in addition to
any other under-spending of budgets which may take place within the City.
"The cost-containment measures announced today are most regrettable,
but unavoidable," said Mayor David Miller. "The choice is now
clear. Toronto Council can support investment to meet the needs of a
growing city or it can oversee the continued erosion of our quality of
life."
The measures announced today have significant impact on municipal services
and will reduce the City's current ability to continue with a number of
city-building initiatives.
As cost containment measures and service level adjustments were reviewed
by each division, the following principles were applied:
1. Service standards and/or service levels were to be adjusted to achieve
targets.
2. Service level adjustments were not to affect the most vulnerable.
3. New or enhanced services approved by Council have been deferred
4. Full elimination of major programs or services would not be recommended
since they require Council approval.
5. Capital projects will proceed only if they do not affect operating
budget
reduction targets.
The City identified 376 positions that will remain vacant as part of the
hiring freeze. Any staffing that does proceed will require the approval of
either the Deputy City Manager or City Manager and will take place only in
cases where staffing of the position is required to meet legislative or
health and safety requirements or is critical to service delivery.
To place the City on a firm financial footing, the Province of Ontario
must
pay for the programs it requires the City to deliver and provide permanent
financial support for TTC operations. In addition, the City must have new
sources of revenue that grow with the economy. Unlike the provincial and
federal governments which have access to income and sales taxes, the
Government of Toronto must depend almost entirely on property taxes that
do not grow with the economy. Without new sources of revenue, it will be
necessary for Council to consider further service reductions, the
elimination of programs and services and/or significant property tax
increases in 2008.
The Toronto Transit Commission (TTC) and the Toronto Police Service (TPS)
have provided a preliminary estimate of 2007 cost containment measures
equalling $9 million, $6 million from TTC and $3 million from Police.
Work is underway by both services to review further reduction options for
the remainder of 2007 and 2008. The Transit Commission and Police Services
Board will consider these options in the fall.
At a briefing session today, the City Manager highlighted that the City
continues to have only 25% of its budget available to find the majority of
budget reductions, since the remainder of the City's budget is used to pay
for provincially-mandated programs, transit and emergency services.
"Toronto is the only city in North America with a population of over
two
million people that continues to rely solely on property taxes to deliver
services," said Councillor Shelley Carroll, chair of the City Budget
Committee. "A city as large and diverse as Toronto, with unique
transit and policing needs, requires sources of revenue other than an
unfairly
structured property tax system to pay the cost of the services the City
needs to succeed."
One-third of the City's total operating budget continues to pay the cost
of
provincially-mandated programs where the standards and level of service,
and therefore the costs, are dictated by the Province of Ontario. Ontario
is the only province in Canada where social programs are paid for through
property taxes. In 2007 alone, more than $729 million was diverted
from property taxes to the pay for these provincially mandated programs.
Since
amalgamation, the cost to Toronto taxpayers has been more than $4 billion.
Another third of the budget is dedicated to paying the cost of the three
emergency services and transit. As a result, the budget reductions
announced today come primarily from the portion of the City's operating
budget dedicated to core municipal services.
Toronto is Canada's largest city and sixth largest government, and home to
a diverse population of about 2.6 million people. It is the economic
engine of Canada and one of the greenest and most creative cities in North
America. In the past three years Toronto has won more than 50 awards for
quality and innovation in delivering public services. Toronto's government
is dedicated to prosperity, opportunity and livability for all its
residents.
