2023 Budget Launch Presentation While we aim to provide fully accessible content, there may be no text alternative available for some of the content within these pages. If you require alternate formats or need assistance understanding the charts, graphs, or any other content, please contact us at 416-397-4229 or Stephen.Conforti@toronto.ca. January 10, 2023 2023 Budget 2 Today, we are tabling: • 2023 Operating Budget of $16.16 billion • 2023-2032 Capital Budget & Plan of $49.26 billion Given the current financial context, the City faced significant challenges in the development of the budget • The tabled 2023 Operating and Capital Budgets are balanced. This budget maintains front -line services and manages affordability . The City continues to make key investments in transit, housing, public safety, and infrastructure. 3 2023 Budget Priorities • Maintain front-line services (e.g. shelters; roads; long -term care homes) • Emergency services and public safety • Transit and transit obligations • Housing • Economic recovery • Manage affordability • Address COVID-19 impacts • Legislative requirements 4 Current Fiscal Context The City is facing significant and unprecedented financial challenges • Continued impacts of COVID-19 • Rising inflation • Increased interest rates • Supply chain disruptions, specialized labour shortages, competitive labour market • Obligations associated with transit expansion • Growing demand for services • Unanticipated legislative changes Impacts are being experienced concurrently and across all City Divisions and Agencies. COVID -19 Impacts Continue 5 2021 City -led Offsets $534 M 2020 City -led Offsets $573 M Safe Restart Agreement Funding $1,077 M 2022 Confirmed COVID -19 Funding $545 M City -led Offsets $592 M Safe Restart Agreement Funding $1,568 M The pandemic has had a disproportionate impact on the City of Toronto due to the scope of services delivered such as transit and shelters. Since 2020, the City has experienced: • $5.5 billion in total COVID-19 financial impacts • $2.5 billion in City-led offsets and mitigation strategies • $3.5 billion in funding received from other orders of government including assumed reimbursement of $273 million in 2022. The City requires support from other orders of government towards $1.4 billion in COVID -19 impacts ($484 million for 2022 shortfall plus $933 million for 2023) to address pressures and support the continuance of service delivery. COVID -19 Financial Impact $933 M Funding Shortfall $484 M 2023 City -led Offsets $786 M Assumed COVID -19 Funding $273 M Whole of Government Approach to Secure Long -Term Recovery • Continued prudent investments and a renewed whole -of - government approach will set the foundations for a sustainable, long -term recovery for Toronto’s residents and businesses. • For 2023 and beyond, Toronto’s response and recovery will require continued funding from our federal and provincial partners for: • Transit • Housing and shelters • Public health • Downtown and main street recovery • Climate action • Infrastructure 6 7 Recovery is Essential in Toronto Toronto is Canada’s economic engine. Toronto's social and economic recovery is critical to the success of the region, province, and nation. • Without federal and provincial funding support, there will be profound, material and sustained impacts: • Reduced capital spending, economic recovery and job growth • Intergovernmental investments are at risk (i.e. transit, climate action and housing) • Impacts will be immediate in 2023 and continue into future years The City has nearly $50 billion in capital investments planned over the next 10 years. Any reduction in capital spending will have a direct impact to job growth and economic recovery. 8 Federal and Provincial Funding is Critical The City cannot continue to deliver the services that benefit the region and are shared intergovernmental priorities without appropriate funding from other orders of government. This includes funding support for refugee response and supportive housing. The City cannot address financial pressures alone through efficiency measures or tax increases. Toronto welcomes the provincial government’s consideration of alternative means of financing cities. The City requires continued partnerships and immediate funding commitments of $1.56 billion (2022 & 2023) in total to avoid service impacts or reductions to capital spending. 2023 Operating Budget 9 10 2023 Tax & Rate Budget $ 16.16 B TAX AND RATE SUPPORTED OPERATING BUDGET $ 49.26 B 10-YEAR TAX AND RATE SUPPORTED CAPITAL BUDGET 11 2023 Tax & Rate Operating Budget $16.16 billion Tax Supported Operating Budget $14.13 billion (87%) Rate Supported Operating Budget $2.04 billion (13%)* Toronto Water Solid Waste Management Services Toronto Parking Authority *Rate Budgets include capital contributions Operating Budget Overview • Manages affordability • Focused on maintaining core front -line services • Includes a 5.5% residential property tax rate increase • Confirms 3% rate increase for water; wastewater; and solid waste • Additional revenue generated through the Municipal Accommodation Tax increase (2%) and a 10 cent TTC fare increase (3.1%) • Responds to key pressures and priorities: • Emergency services and public safety • Transit and housing • Economic recovery • Requires provincial and federal funding: • $933 million for COVID-19 impacts • $97 million for refugee response • $48 million for supportive housing 12 Historical Opening Budget Pressures 13 COVID-19 Impacts $933 M In addition to continued COVID-19 pandemic impacts, the City faces unprecedented inflationary pressures and significant impacts of growth in 2023: 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Inflation Growth COVID-19 $271 M $503 M $456 M $756 M $577 M $669 M $559 M $650 M $2.3 Billion $2.0 Billion $1.9 Billion $2.3 Billion $583 M $931 M 14 Economic Impacts by the Numbers Inflation 2022 year-to-date average: 6.6% (Toronto CPI) Cost of fuel • $0.01 increase to cost / litre for gas and diesel: $900K impact • Total incremental pressure in 2023: $46M • The City maintains the largest public transit system in Canada Interest rates • 2021: lowest interest rates ever (0.25%) • Today: highest interest rates since 2008 (4.25%) • Total added pressure for capital financing costs in 2023: $65M Cost of food • Long-term care raw food costs up from $9.92 to $13 per diem (31% increase): $3M Impacts are being experienced across all City Divisions and Agencies. Continued Federal and Provincial Support Required COVID-19 Funding Required* Other Funding Support Required * *For 2023, the City requires support towards $933 million in COVID-19 funding and $145 million in other funding from the federal and provincial governments. $933 million = 24% tax increase The City cannot do this alone and welcomes alternative means of financing cities. Transit - $366 million Shelters - $317 million Public Health - $87 million Other Impacts - $163 million Refugee Response - $97 million Supportive Housing - $48 million 15 16 Balancing Actions 2023 opening budget pressure of $1.9 billion including: Revenue Actions: ($498 million) • Property tax impacts and assessment growth • Increased City revenues (Municipal Accommodation Tax; user fees and TTC fares) • Recovery of corporate revenues Expenditure Actions: ($289 million) • Program and line-by-line review • Modernization efforts • Procurement savings • 2023 Budget assumes full funding support from provincial & federal governments towards COVID-19 impacts • Capital funds set aside as a one-time emergency provision • Funds would be leveraged, impacting the capital program Base budget pressure: $786 million COVID-19 Pressures: $933 million Supportive Housing & Refugee Response: $145 million • 2023 Budget assumes full funding support from provincial & federal governments towards supportive housing and refugee response costs • In absence of sufficient funding, one-time emergency reserves will be depleted If one-time provisions or emergency funding is used, the backstop strategy will be fully exhausted and no longer available for ongoing commitments and COVID-19 impacts in 2024. Tax and Rate Supported Operating Budget 17 WHERE THE MONEY COMES FROM ($16.16 B) HOW THE MONEY IS INVESTED ($16.16 B) * Reflects annual reserve draws which are supported by annual reserve contributions in order to smooth out expenses that fluctuate or are periodic in nature (e.g. insurance claims, employee benefits and vehicle reserves) Other Agencies Transportation Governance & Corporate Services Corporate Accounts Other City Operations Financing Rate Programs Emergency Services Transit Cost Shared Social Programs Base COVID-19 Expenses 27.7% 14.7% 13.4% 7.5% 7.0% 5.3% 6.4% 2.8% 2.6% $4.47 $2.38 $2.17 $1.21 $1.14 $0.86 $1.03 $0.45 $0.41 $2.04 12.6% Transfers from Capital Investment Income User Fees & Fines Reserves* Other Land Transfer Tax Transit Fares Rate Program Revenue Fed / Prov Revenue Property Tax Base Funding COVID-19 Funding COVID-19 Revenue Loss 30.4% 26.3% 7.8% 5.9% 5.8% 3.6% 4.5% 1.8% 1.3% $4.91 $4.25 $1.27 $0.95 $0.94 $0.58 $0.72 $0.29 $0.21 $2.04 12.6% Services Which Extend Beyond Toronto 18 On an annual and ongoing basis, the City of Toronto invests in extensions of federal and provincial responsibilities. 22%, or $1.1 billion, of Torontonian’s annual property taxes are directly invested in the following services which reduce the financial burden for other governments: Housing $616 M Social Services $247 M Health Services $256 M *This excludes the significant capital investments made by the City of Toronto in intergovernmental priorities. Homelessness and Housing First Solutions Social and Affordable Housing Child Care Employment Services Youth Development Infectious Disease Control Long-Term Care Homes Family Health Growing Demand for Shelter Spaces 19 • Pre-pandemic: the City provided 6,000 shelter beds • In 2022: the City provided 8,500 shelter beds • 2023 Budget: provides funding for 9,000 shelter beds Toronto has more shelter beds per capita than any other municipal shelter system. The housing crisis across Canada, along with current mental health challenges, has a disproportionate impact on major cities and continues to increase demand on shelter services and other services supporting the shelter system. Increased Costs: Shelter Space for Refugees 20 • January 1, 2021: City provided 500 shelter beds dedicated to refugee claimants • January 1, 2022: City provided 788 shelter beds dedicated to refugee claimants • In 2023: the City anticipates demand for up to 2,550 beds per night for refugee claimants The City needs timely funding support of $97 million from the federal government in 2023 to be able to continue refugee response. Toronto’s shelter system has more dedicated beds for refugees than any other Canadian city. The City has expanded temporary refugee programs to accommodate growing demand however, as of today, demand for refugee-specific beds represents 28% of the City’s shelter capacity. Supportive Housing: Needs Support from Province 21 The City needs confirmation of ongoing funding support from the provincial government in 2023 including $48 million for supportive housing costs. • The City of Toronto provides significant funding and investments in affordable housing infrastructure • Supportive housing is a key component to ending chronic homelessness, which will reduce costs for the health care system and other community services • Confirmation of operating funding is needed from the province to support residents in their new homes Transit Services 22 The 2023 Budget will ensure transit remains safe, accessible, connected, and keeps people moving, through a $53 million subsidy increase and 10 cent fare increase (3.1%) • Prepare for Eglinton Crosstown and Finch West opening • Expansion of the Fair Pass Program • Enhanced downtown station and streetcar route cleaning • Additional safety measures (50 additional hires) • Increased fuel costs to operate transit services • Prioritized TTC service on routes in Neighbourhood Improvement Areas • Frozen TTC fares for seniors The Toronto Transit Commission operates the largest public transit system in Canada and the third largest system in North America *Historical information on the City’s added subsidy to the TTC can be found in the Appendices. Emergency Services 23 Fire Services: • 52 new permanent firefighters, with planned hiring of up to 200 firefighters • Year 1 of 3 year plan to hire a total of 156 new operational firefighters • Council-approved Operational Service Delivery Model (2021.EC24.13) Paramedic Services: • 66 new permanent positions, with planned hiring of up to 250 paramedics • Year 4 of 5 year plan to hire additional paramedics • Council-approved Multi-Year Staffing and Systems Plan (2019.EC5.3) Toronto Police Service: • Planned hiring of 200 uniformed front-line positions (new and vacant) • Hiring strategy includes hiring 136 civilian officers including 911 operators • Includes 25 uniformed officers for the downtown core to enhance public safety The 2023 Budget includes enhanced investments in emergency services to improve 911 response times and public safety: Key Initiatives in the 2023 Budget 24 Focusing on delivery of core, front-line services Promoting supply and safety of housing Investing in economic and downtown recovery Ensuring public safety Maintaining affordability • Improve front-line emergency services and 911 times • Continue expanded sidewalk snow clearing • Enhance availability of water fountains and washrooms in parks • Vacant Home Tax • Expanding housing options (e.g. legalization of multi￾tenant homes) • Eviction Prevention Intervention in the Community (EPIC) • Downtown recovery initiatives • Maintain the Small Business Property Tax Rate Reduction (15%) • Enhance the Toronto Community Crisis Service • Anti-Violence Programs • Youth Employment Initiatives • Additional resources to promote community safety • Property tax rate increases below inflation • Continued support for needs-based programs and subsidies • Expansion of Fair Pass Program • Frozen TTC fares for seniors 25 2024 Outlook The City is anticipating ongoing fiscal challenges into future years including an opening pressure of $1.5 - $1.7 billion in 2024. • Preliminary COVID-19 impacts of up to $0.9 billion associated with reduced transit ridership revenue and shelter services, which is expected to continue into future years • As the City recovers from the pandemic, will analyze which impacts are expected to create continued base line operating pressures • Continued funding support from the federal and provincial governments is critical – we cannot sustain these pressures alone. In $ Millions Estimates Low High Base Pressures Transit 118 Salaries and Benefits 187 Inflation & Growth 296 Sub-Total 600 Federal/Provincial Responsibilities Refugee Response 97 Supportive Housing 48 Sub-Total 145 COVID-19 Impacts Transit 350 - 420 Public Health 44 Shelters 317 352 Corporate Revenues 18 42 Other Costs 35 70 Sub-Total 720 927 Total: 1,465 1,672 Property Tax Impacts toronto.ca/budget | #budgetTO 26 27 Property Tax Rate Increases to Fund Services Residential Properties Business Properties Residential Multi-residential Commercial* Industrial 5.50 % 2.75 % 2.75 % 5.50 % Assumed at below inflation Half of residential increase Half of residential increase per policy & regulation Assumed at below inflation Proposed property tax rate increases for 2023: Annual operating budgetary tax increase to the average home: $183 *Small Business Subclass Continued rate reduction of 15%, established in 2022, supporting 29,000+ small businesses City Building Fund: Dedicated to Transit and Housing 28 Dedicated funding to support transit and housing in the 10 Year Capital Plan *The City Building Fund increase extends to 2035 to continue to support investments in transit and housing 1.5% Increase to dedicated levy for 2023* $6.1B Annual City Building Fund increase to the average home: $50 29 2023 Rate Increases *Interim rate increases of 3% were approved by City Council on December 14, 2022 for Toronto Water and Solid Waste Management Services. 3.0% Increase to water and wastewater consumption rates* 3.0% Increase to Solid Waste Management Services rates and fees* Average annual household increase based on 230 cubic metres of water consumed per year: $29 Average annual single-family residential increase will range depending on size of their garbage bin: $5 - $16 30 Your Property Tax Investment The average home in Toronto has an assessed value of $695,268. The 2023 Property tax on this home would be $3,569. This includes an increase of $183 for City operations and $50 for the City Building Fund. *Does not include education taxes The current reassessment cycle reflects a January 1, 2016 valuation date for the period of 2017-2020. As the Province postponed the 2021 reassessment, 2023 property values are the same assessment values as 2020, unless the property experienced relevant changes (e.g. renovations, improvements or demolitions). $131 $137 $236 $275 $297 $302 $541 $658 $992 Transportation Services Other Agencies Housing Cost Shared Social Programs Other City Operations Governance & Corporate Services Transit Capital Investments & Corporate Financing Emergency Services (Fire Services, Paramedic Services, Toronto Police Services) 2023 Capital Budget toronto.ca/budget | #budgetTO 31 Capital Budget Overview • 2023 Capital Budget of $4.45 billion • Largest 10-Year Capital Plan introduced: $49.26 billion • Prioritizes investments in transit; housing, and advancing the City’s climate action goals • Experiencing significant challenges • Supply chain disruption and cost escalations • Specialized labour shortages • Increased cost of borrowing • Supported by extension of the City Building Fund • Will leverage Sustainable Debenture Program • Maximizes use of development charges • Assumes full reimbursement of Bill 23 impacts • Supports job growth and provincial / national economy 32 $4.3 8% $0.9 2% $1.5 3% $4.0 7% $5.5 10% $3.9 $13.8 25% $15.3 28% Other Emergency Services Corporate Real Estate Management Environment & Recreation** Transportation Housing Transit Water $5.9 $9.8 20% Tax and Rate Supported 10-Year Capital Plan 33 WHERE THE MONEY COMES FROM ($49.26 B) HOW THE MONEY IS INVESTED ($49.26 B) Foregone revenue including land value and financial incentives $1.8 4% $1.6 3% $2.4 5% $3.4 7% $3.8 8% $3.8 8% $6.1 12% $6.2 13% $6.2 13% $14.0 28% Other Provincial Funding Recoverable Debt Federal Funding Capital From Current Reserve/Reserve Fund Dedicated City Building Fund* Development Charges Debt Utility - Water Rate The 10 Year Capital Plan assumes full reimbursement of any impacts from Bill 23. * City Building Fund is dedicated to Transit and Housing projects ** Projects that support Council-approved sustainability outcomes are included in all spending categories Enhanced Investments in the Capital Plan MOBILITY: $1.2 B HOUSING: $0.9 B FLOOD PROTECTION & PARKLAND: $0.7 B Parks and Community Recreation Facilities Flood Protection (Broadview/ Eastern; Rockcliffe) Quayside Water & Wastewater Infrastructure Library Construction, Expansion and Renovation Technology Infrastructure Investments Transit Fleet State of Good Repair Investments Capacity Enhancement (Line 1 & 2) Roadway Extension (Broadview Avenue) 4 Year Bike Share Expansion Rental Development Emergency Housing Action Housing Now TCHC Development Projects INFRASTRUCTURE / OTHER: $2.1 B 34 *The 10 Year Capital Plan assumes full reimbursement of any impacts from Bill 23 Investments which include components that support Council-approved sustainability outcomes are embedded throughout the Capital Plan. The 2023 10-Year Capital Plan includes an additional $2.1 B towards these outcomes vs. 2022. 10 Year Tax and Rate Supported Capital Budget and Plan analyzed using the Climate Lens: $17.62 billion in investments include components that support Council-approved sustainability outcomes 35 2023-2032 Capital Plan – Funded Climate Action Reduce Greenhouse Gas Emissions and Improve Climate Resilience Council Priorities and Decisions Buildings • Reduce Energy Consumption & Corporate Emissions • Net Zero Carbon Plan Mobility and Fleet • Zero Emission Vehicles • Sustainable City of Toronto Fleets Plan • TTC’s Green Bus Program Water and Waste • Wet Weather Resiliency • Erosion Control • Landfill Control and Organic Waste Processing TransformTO: Toronto Climate Strategy; Toronto’s Climate Action Strategy; Toronto’s Resilience Strategy; Corporate Strategic Plan Of the $17.6 B in investments: $4.2 B supports GHG emission reductions; $5.4 B supports climate resilience; $8.0 B supports both GHG emission reductions and climate resilience Investments in State of Good Repair (SOGR) 2016-2020 36 Since 2014, the City of Toronto has made increased investments in SOGR: • 2014 10-Year Capital Plan: $16.6 billion invested in SOGR • 2023 10-Year Capital Plan: $24.7 billion invested in SOGR • Increase of 49% in funds dedicated to addressing SOGR needs During this time period, the City has significantly invested in various SOGR projects to address infrastructure needs including: • Transit and transit system upgrades • TCHC building repairs • Fleet replacements • Water and wastewater Photo by: Juan Rojas on Unsplash SOGR will continue to be a City priority 2016-2020 37 • Investing in SOGR continues to be a priority, reflecting $24.2 billion or 49% of planned capital over the next 10 years • SOGR has been negatively impacted since the onset of COVID-19 • Paused capital projects due to COVID-19 funding shortfalls • Supply chain issues and cost escalations • Specialized labour shortages • Increased cost of borrowing • Further impacted by aging infrastructure and assets • Despite added investments in SOGR, the backlog is expected to grow from $9.5 billion in 2023 to $18.8 billion in 2032 • Greatest impacts in transit; transportation; recreation and City buildings • The extension of the City Building Fund will help to mitigate growing pressures for transit and housing • The City continues to enhance asset management planning The City will conduct a review of remaining SOGR challenges and return with a strategy and opportunities to increase SOGR investments and reduce the expected backlog for the 2024 budget process. 38 Bill 23: Impact to Development Revenues • Bill 23 was announced with the intention of increasing affordable housing, however it has a direct negative impact on the City’s ability to deliver the HousingTO Plan • The current 10-Year Capital Plan assumes full reimbursement of $2.3 billion in expected impacts. If the City is not reimbursed, the following is at risk: • $1.9 billion (93%) will impact housing; transit; roads; water; and parks and recreation • $1.3 billion (57%) will directly reduce the City’s investments in the HousingTO Plan (40,000 units) • The City anticipates an ongoing deficit far beyond the 10-year period, while also expecting the City to grow by more than 250,000 people in the next 10 years • A reduction in annual capital spending of $230 million could result in 2,000 job losses in the greater economy. Consistent with the provincial announcement, the City of Toronto is expecting to be fully reimbursed for the revenue losses or else capital projects will be postponed or canceled. 2023 Budget Summary • Experiencing significant financial challenges and continued COVID -19 impacts • Budget manages affordability and focuses on maintaining core front -line services • Leverages new funding mechanisms and extension of City Building Fund • Makes key investments in emergency services and public safety, transit, housing, and climate action • Promotes economic recovery • Requires continued support and partnerships with other orders of government 39 40 2023 Budget Schedule Budget Launch Budget Committee Presentations & Review Budget Committee: Public Presentations (Multiple Locations – In Person and Virtual Options) Jan 12-13 Jan 10 Jan 17-18 Jan 24 Budget Committee Wrap-Up By Feb 1 Mayor proposes 2023 Budget Feb 14 Special City Council Get Involved! The budget is about setting goals and building a great city – together. Residents and businesses are encouraged to get involved in the budget process: • Speak at a public meeting on January 17 or January 18, 2023 (in - person at multiple locations or virtually) • Submit written feedback to the Budget Committee • Contact Members of Council 41 Thank you toronto.ca/budget 42 Appendices 43 44 Table of Contents Glossary Property Taxes • Property Tax Ratio Shifts • 2023 Tax Increase for Average Home • 2022 Comparison of Residential Property Taxes • 2022 Comparison of Residential Property Taxes as a Percentage of Household Incomes Operating Budget • City’s Operating Spending Per Capita • City Subsidies Provided to Toronto Transit Commission (2014 to 2023) • City-Funded Investments in Housing (2015 to 2023) Capital Budget • 2023-2031 Capital Plan by Category • State of Good Repair (SOGR) Backlog • 2023 SOGR Backlog as % Total Asset Value • Capital Plan – Debt Service Ratio • Reserves and Reserve Funds 45 Glossary Actuals: An actual financial amount paid (or received) for the delivery of City services. Achievability: Refers to goals or objectives that are able to be brought about or reached successfully. The capital budget is achievable means that the City can realistically spend and deliver capital projects consistent with the plan. Affordability: Refers to the City's capacity to pay for its investments. Capacity to Spend: Ability to spend money along with the capacity to deliver projects as demonstrated by historic spending patterns and approved contractual obligations. Capital Budget: A Capital Budget is the City's plan to acquire / build assets or extend the useful life of existing assets; an example of a capital expenditure is the construction of a new community centre. Capital Needs Constraints: The capital needs that cannot be accommodated within the capital plan that the Division or Agency have the capacity to deliver. City Building Fund: A special dedicated property tax levy called the 'City Building Fund' for priority transit and housing capital projects. Complement: Positions that support the delivery of City services and service levels as approved by Council. Efficiencies: Reductions in the cost of delivering a service without a reduction in service level. New / Enhanced: New and enhanced service changes resulting in an increase in service levels from what was previously approved by Council. Operating Budget: An Operating Budget is the City's annual plan to provide services to the residents of Toronto; the budget includes all revenues and expenses needed to provided services; an example of an operating cost would be the cost to run the TTC subways. Operating Impact of Completed Capital Projects: The additional expense (or savings) and positions needed to operate or maintain a new asset; an example would be the additional expense and staff needed to operate a recently completed community centre. Rate Supported Budget: Budget fully funded by user fees such as Solid Waste, Toronto Water and Toronto Parking Authority. State of Good Repair (SOGR): Cost of maintaining assets to ensure they are able to support the delivery of City services and meet service outcomes. Sustainability: Refers to the City's ability to maintain a certain rate or level (e.g. spending rate). Tax Supported Budget: Budget funded by property taxes. User Fees: Program generated fee and rental revenue for the use of its services (such as the TTC fare, ice rental fees and various City permits). 46 Property Tax Ratios Tax Class Actual Projected and Target Year: 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Commercial 3.07 3.00 2.90 2.85 2.81 2.74 2.65 2.61 2.58 2.497 Industrial 2.83 2.76 2.71 2.62 2.59 2.51 2.513 2.50 Multi-Residential 2.66 2.46 2.28 2.10 2.05 1.96 1.899 Small Business 2.63 2.50 2.50 2.49 2.44 2.43 2.43 2.43 2.19 2.120 For tax ratios above the provincial thresholds (1.98 for Commercial; 2.63 for Industrial; and 2.00 for Multi￾Residential), the regulations allow for a maximum tax increase of ½ of the Residential tax rate increase. 47 2023 Tax Increase for Average Home $ % 2022 Municipal Taxes* 3,335 Budgetary Levy Increase 183 5.50% City Building Fund 50 1.50% Total Impact for 2023: 233 7.00% 2023 Municipal Taxes 3,569 Average Home Value: $695,268 *There is no Current Value Assessment (CVA) shift for 2023. The 2022 Municipal Property Tax amount includes a technical adjustment of 0.16% ($5 for the average home) which represents adjustments for assessment appeals. 3,228 3,504 3,773 4,632 4,689 4,754 4,968 5,256 5,363 5,723 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 48 2022 Comparison of Residential Property Taxes Large GTHA Municipalities, Vancouver, Ottawa, Montreal & Calgary Sources: 2022 Municipal Study – BMA Consulting Inc., City of Vancouver, Montreal & Calgary websites, World of Web Advertising (WOWA); 2022 Housing Market Reports (Vancouver & Calgary Markets). Note: BMA Comparison (Ontario municipalities) based on the weighted average median residential assessment of seven residential property types per MPAC Municipal Status Report 1st Quarter, 2022. *Includes education property taxes and excludes land transfer tax values **For Toronto, it also includes provision of average solid waste collection and the City Building Fund levy 49 Large GTHA Municipalities, Vancouver, Ottawa, Montreal & Calgary Source: 2022 Municipal Study – BMA Consulting Inc., City of Vancouver, Montreal & Calgary websites, CMHC Note: BMA Comparison (Ontario municipalities) based on the weighted average median residential assessment of seven residential property types per MPAC Municipal Status Report 1st Quarter, 2022 *Includes education property taxes and excludes land transfer tax values **For Toronto, it also includes provision of average solid waste collection and the City Building Fund levy 2022 Residential Property Taxes as a Percentage of Household Income 2.4%3.2%3.9% 3.9%4.1%4.4% 4.4% 4.4%4.7% 4.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 50 City’s Operating Spending Per Capita Increased Operating Spending Per Capita (2015 to 2023) When Adjusted for Inflation and Population Growth * Based on Q3 Variance Report ** Indexed to 2023 dollars *** Prior year actuals adjusted for revised IDC/IDR methodology $4,699 $4,616 $4,637 $4,707 $4,735 $4,808 $4,951 $4,992 $5,215 2015 Actual 2016 Actual 2017 Actual 2018 Actual 2019 Actual 2020 Actual 2021 Actual 2022 Projection 2023 Budget 51 City Subsidies to the TTC (2014 – 2023) - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 City Subsidy COVID-19 Support City Subsidies Provided to the TTC ($ millions) • City subsidies to the TTC have increased from $546.9 million in 2014 to $958.7 million in 2023, excluding COVID-19 funding (increase of 75%) • When including COVID-19 impacts, the City’s subsidy has increased by $776.8 million (increase of 142%) 52 City-Funded Investments in Housing (2015 to 2023) ($ millions) This provides an update to the information requested as part of the 2022 Budget Process which compared the 2015 and 2022 Housing-Related Budgets. *The city-funded portion of the 10-Year Capital assumes full collection of the City’s forecasted development charges. - 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0 2015 2023 - 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 4,000.0 2015-2024 Capital Plan 2023-2032 COVID-19 support Capital Plan Operating Operating Investments: Capital • Since 2015, the City has increased direct funding from $359 million to $616 million in 2023, when excluding COVID-19 (an increase of 71%) Capital Investments: • The 2015-2024 Capital Plan included $96 million in City funding for housing-related budgets. • The 2023-2032 Capital Plan includes $3.76 billion in direct City funding for housing-related budgets (an increase of 3817%) • This excludes additional support of $5.9 billion planned in foregone revenue such as land value and financial incentives. Shelter Support & Housing Administration Toronto Community Housing Corporation Housing Secretariat 53 2023-2032 Capital Budget & Plan 10-Year Tax & Rate Supported Capital Plan by Category (in $ millions) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 State of Good Repair Growth related, Service Improvement and Enhancement Legislated, Health and Safety 54 State of Good Repair (SOGR) Backlog Tax & Rate Supported SOGR Backlog (in $ millions) 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2022 Accumulated Backlog Est. 9,654 9,909 10,536 11,245 12,031 13,087 14,252 15,502 16,733 2023 Accumulated Backlog Est. 10,032 10,337 10,761 11,658 12,389 13,748 14,879 16,193 17,686 18,764 2022 Backlog % of Asset Value 6.1% 6.2% 6.5% 6.8% 7.2% 7.8% 8.5% 9.1% 9.8% 2023 Backlog % of Asset Value 6.0% 6.0% 6.1% 6.5% 6.8% 7.3% 7.8% 8.3% 8.9% 9.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 0 5,000 10,000 15,000 20,000 55 2023 SOGR Backlog as % Total Asset Value SOGR Backlog ($ millions) 2023 (beg. bal.) 2023 (1 Year) 2027 (5 Year) 2032 (10 Year) 2022-2032 Change Toronto Transit Commission 0 92 2,646 6,285 6,285 ▲ Transportation Services 1,816 2,147 3,725 7,013 5,197 ▲ Corporate Real Estate Management 911 927 1,157 1,282 371 ▲ Parks, Forestry & Recreation 773 805 1,089 1,179 406 ▲ Exhibition Place 53 55 74 157 104 ▲ Technology Services 0 0 16 49 49 ▲ Other 944 930 792 740 (204) ▼ Total City Backlog (excl. Gardiner, Water & TCHC) 4,496 4,957 9,499 16,705 12,208 ▲ F. G. Gardiner Expressway Rehabilitation 1,888 1,828 748 80 (1,807) ▼ Toronto Water 1,592 1,748 879 492 (1,100) ▼ Toronto Community Housing Corporation 1,549 1,500 1,264 1,487 (62) ▼ Total SOGR Backlog (Tax & Rate) 9,525 10,032 12,389 18,764 9,239 ▲ Total Asset Value 160,725 168,440 183,030 203,612 42,887 SOGR as % Asset Value 5.9% 6.0% 6.8% 9.2% 56 2023-2032 Capital Plan: Debt Service Ratio 12.00% 12.50% 13.00% 13.50% 14.00% 14.50% 15.00% 15.50% 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Tax Supported Debt Ratio Comparison 2022 Council Approved 2023 - 2032 Plan 57 Reserves and Reserve Funds $11.2 billion in deferred revenues and reserves balances as of September 30, 2022 97.4% of these balances are fully committed: • Legally mandated reserves with legislated, contractually bound, capital plan or Council-directed commitments ($6.6 billion) • For example, provincial legislation restricts use of growth￾related funds to specific purposes (e.g. Development Charges Act, Planning Act) • Committed reserves further supporting 10 year capital and operating plans ($4.4 billion) • The remaining amount ($290.3 million) is required to be reserved for: • emergency purposes such as extreme weather events; or • one-time backstop purposes in the event funding is not received such as refugee response or supportive housing (which comprises 78% of the emergency reserve balance). The uncommitted amount represents 1.8% of the total 2023 Operating Budget. City Reserves $ Millions Balance Sept. 30/22 Legally Mandated Reserve Funds Deferred Revenue (Externally Restricted)* 6,560.7 10-Year Capital Plan Commitments Reserves Committed in Capital & Operating Plans 4,365.0 Mandated / Committed Reserves 10,925.7 Remaining Reserves Emergency Reserves 290.3 Total City Reserves / Reserve Funds 11,216.0 *Also represents commitments in Capital Plan