Toronto facing a massive $1.42 billion budget gap in five years

If the city continues on its current financial course, it will face a massive $1.42 billion budget gap in just five years, warns a new report from the city’s top bureaucrat.

Peter Wallace, the current city manager who is leaving to take on the job of secretary of the treasury board in Ottawa next month, tabled his long-awaited and much-delayed long-term financial plan on Monday. It will be considered by Mayor John Tory’s executive committee on March 19.

Without raising taxes or finding a new source of income, the services the city provides will suffer or user fees like TTC fares or those for recreation classes could increase. Cuts could affect things like the number of hours the library is open, the availability of shelter beds, how quickly potholes are fixed, how often the bus comes, and many other basic functions of municipal government.

A property tax increase alone would need to be significant to make a dent in the looming operating gap. A 1 per cent residential property tax hike currently raises $30 million.

Because Wallace’s report was delayed until after the last budget of this term, and simply recommends executive have a new city manager bring forward an action plan, change won’t be possible until the 2020 budget process. With the election scheduled Oct. 22 of this year, it will be up to a new council to implement it.

There is $30 billion in capital projects that have been approved but which remain unfunded.