Toronto to work with Province to address operating budget shortfall

    TORONTO, March 26 /CNW/ - The introduction of Toronto's operating budget
today highlighted the need for the province to pay its agreed upon share for
the provincially mandated programs the City delivers. The proposed
$7.8 billion operating budget presented today noted the absence of adequate
provincial funding for cost-shared programs such as shelters, child care and
the cost of administering Ontario Works. The provincial funding shortfall in
2007 for these programs is $71 million. The absence of these funds has meant
that Toronto's proposed operating budget is not balanced.
    Chair of the City's Budget Committee, Councillor Shelley Carroll stated,
"While we have done significant work to control costs, the impact of
provincial programs on the City's budget continues to require significant
property taxpayer dollars - this fiscal issue needs to be finally resolved."
    The presentation made earlier today recommends a 3.8 per cent property
tax increase plus increases in some user fees. The increases are required to
deliver basic municipal services and deliver the programs and services
identified as Toronto City Council's highest priorities. As a result of the
funding pressures created by provincial programs, the Toronto Government
continues to rely on reserve funds as a major funding source for core
municipal services. Reserve funds are not intended for this purpose and the
City's reliance on reserve funds is not sustainable.
    Mayor David Miller commented on the proposed budget stating, "Simply put,
the province needs to pay its bills and we will continue to work with the
provincial government to ensure the province pays what everyone agrees is its
share for the cost of the programs they have municipalities deliver for them."
    In reviewing the City's proposed budget, City Manager Shirley Hoy pointed
to the City's fundamental structural financial problem that has been
recognized by the Board of Trade, Conference Board of Canada and TD Bank.
"There continues to be an unacceptable level of property tax revenues being
diverted to fund provincial cost-shared programs at the expense of core
municipal services such as roads, parks, recreation and garbage collection,"
stated Hoy.
    While presenting the proposed budget, Deputy City Manager and Chief
Financial Officer, Joe Pennachetti stressed the need for the province to pay
its share of cost-shared programs and relieve the property tax of expenses it
was never designed to pay. Pennachetti stated, "The impact of funding
provincial cost-shared programs combined with the City's stagnant non-tax
revenue has meant an over-reliance on one-time fixes that are not sustainable.
The City's financial circumstance demonstrates why cities need a source of
revenue that grows with the economy, such as one cent of the GST."
    The budget proposed today maintains current service levels and limits
budget increases in the majority of service areas to zero or less than two per
cent. There are modest service enhancements valued at $14 million that focus
on the City's highest priorities.
    The Toronto Government continues to participate in continuous
improvement, best practice and benchmarking initiatives to control costs and
has performed well in these comparisons. In addition, the City has conducted a
number of program reviews to ensure the mandate and structure for service
delivery is the most efficient and effective possible. City staffing numbers
remain at amalgamation levels for the majority of programs, while growth has
been confined to areas such as TTC, police and those cost-shared programs
where service levels are mandated by the province.
    For more information about the 2007 proposed Operating Budget and to see
the presentation made today, visit
    The 2007 Operating Budget hearings will be held by the Budget Committee
for stakeholder groups and the general public on March 29 in the Council
Chamber at Toronto City Hall. To make a presentation, please contact the
Budget Committee at 416-392-6662.

    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 liveability for all its residents.

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For further information: Media contacts: Cindy Bromley, Communications
Manager, (416) 392-4993; Brad Ross, Manager, Strategic Communications, (416)

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