Institute on Municipal Finance and Governance releases new data on the state of Toronto’s finances
Toronto, October 9, 2018 – Before Toronto’s 2014 municipal election, the Institute on Municipal Finance and Governance (IMFG) took an in-depth look at the state of the City’s finances, analyzing the City’s spending, revenues, debt, and infrastructure. Today, with the 2018 municipal election just two weeks away, IMFG is releasing a check-up on Toronto’s fiscal health.
Some of the results of our analysis include:
- Toronto continues to keep spending under control. In fact, Toronto’s operating expenditures per household, when adjusted for inflation, were actually lower in 2016 than in 2000 or 2012.
- On the revenue side, property taxes per household, when adjusted for inflation, declined from 2000 to 2016. Revenues from the Land Transfer Tax have increased steadily since its introduction in 2008, mirroring the decline in property taxes.
- User fees per household increased from 2001 to 2016, further helping offset the decline in property tax revenue after adjusting for inflation. Transfers from the federal and provincial governments fluctuated in the same time period. Overall they increased from 2001 to 2016, with sharp growth from 2008 to 2010 and a reduction from 2011 to 2016.
- The 2018 Budget projects that the City’s debt level is approaching 15 percent of property taxes, the ceiling set by City Council. On average, over the next ten years, the City’s debt level is projected to climb from just over 13 percent in 2018 to over 15 percent in 2021 before declining.
In our 2014 study (Is Toronto Fiscally Healthy? A Check-up on the City’s Finances by Enid Slack and André Côté), we likened Toronto’s fiscal health to the health of an aging Maple Leafs defenseman: he may be a solid performer on the ice and well cared for by training staff, but he is increasingly expensive and in need of major knee surgery.
What we meant was that Toronto’s fiscal health was pretty good by most measures but that it faces cost pressures and its aging infrastructure and investment needs present a huge financial challenge.
Four years later, with another election approaching, the financial picture remains largely the same, as do the challenges. In other words, our defenseman is still waiting for his knee surgery.
About the Institute on Municipal Finance and Governance (IMFG)
The Institute on Municipal Finance and Governance is a research hub and think tank that focuses on the fiscal and governance challenges facing large cities and city-regions. It is located within the University of Toronto’s Munk School of Global Affairs and Public Policy.
For more information, please contact:
Tomas Hachard | Manager, Programs and Research |
Institute on Municipal Finance and Governance, Munk School of Global Affairs and Public Policy, University of Toronto
tomas.hachard@utoronto.ca | 416-978-5117
www.imfg.org