2021 City of Toronto Budget Update: Hold the Line
As everyone continues to grapple with the ongoing pandemic, municipalities across Canada are faced with an additional challenge during this year’s budget deliberations of ensuring adequate funding is available for continued COVID-related support in addition to regular programs, services, and capital projects.
In the City of Toronto, the 2021 Budget process is underway, and this year differs remarkably from previous years. For starters, the entire process – from the Budget Launch to public consultations – is being held virtually, in order to comply with the current Public Health regulations, and as a result saw a noticeable increase in participation amongst the public. It will be interesting to see whether this virtual approach will continue post-pandemic, considering the high levels of engagement.
Further, this year differs as staff have had to pivot from “business as usual” to remain COVID-responsive in this pandemic-era budget, indicative that much of 2021 will be challenging and that it is still early days before government can fully turn its attention towards recovery and rebuild.
For context, Toronto City Council unanimously approved a 2020 tax and rate combined Operating Budget of $13.5 billion, and a total 10-Year Capital Plan of $43.4 billion on February 19, 2020 – and before the impacts of the COVID-19 pandemic were known. Subsequently, numerous in-year adjustments to the approved 2020 Budget were required to accommodate the estimated average weekly financial impact to the City of $65 million, as a result of both added costs required to manage the emergency, as well as a significant loss in revenues such as transit fares, municipal land transfer tax and various other charges and fees. By year’s end, this amounted to a $1.7 billion gap. The Safe Restart Agreement provided critical and welcome relief to municipalities across the country facing financial budgetary pressures, who cannot carry forward deficits.
Onwards to 2021 – A new year, new budget, and new financial pressures.
