LILLEY: Olivia Chow's budget is smoke, mirrors and raid on city reserves

Mayor Olivia Chow kicked off the announcement of her election year budget with a campaign-style speech on Thursday. Standing in the Junction Triangle Branch of the Toronto Public Library, Chow said that her budget was about investing in services and giving residents a break.

The budget has a proposed 2.2% tax increase, the lowest since 2022, with a 0.7% rate hike for the operations budget and 1.5% increase for the city building fund. It’s all backed by a $1.7-billion raid on reserve funds.

“When you ask how we’ve made it, how we make life more affordable, this budget is my answer. Together, we are building a more affordable, caring and safer city for you,” Chow said at the event in the Junction.

Chow taking aim at election rivals

She also took a shot at her predecessor and likely campaign rival come the fall, former mayor John Tory. Chow said that she inherited a fiscal mess, which is why she had to increase taxes by 9.5% in 2024 and 6.9% in 2025.

“I didn’t create the fiscal crisis, but I took responsibility for fixing it. I partnered with the provincial government and secured a historic new deal that helped close a $1.8-billion gap,” Chow said.

That was a clear reference to Tory, who has refused to declare if he is running even as key organizers try to line up support for a potential run that could be announced by mid-month.

Small tax hike after raid on reserves

Despite finding fiscal sanity all of a sudden with her rate hike of just 2.2%, the only way Chow could do this is by raiding the reserves. It’s not unusual for the reserves to make up part of the city budget; it’s just unusual that it is such a large part of the revenue stream.

In last year’s $18.85-billion operations budget, reserves contributed $1.3 billion or 6.9% of the total. In this year’s $18.9-billion operations budget, reserves account for $1.731 billion or 9.2% of the total.

In most years over the last decade, reserves make up about 4% of the city’s operations budget revenue with the previous exceptions being 2025 at 6.9% and 2017 at 7%. What Chow is doing is keeping the property tax low, while taking a larger share of reserves than we’ve seen in well over a decade.

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Bradford says budget plan unsustainable

Councillor Brad Bradford, who has already said he is running in October’s election, compared the budget to Chow burning the furniture to heat the house.

“I find it rich that on the eve of an election, Mayor Chow has finally found some fiscal restraint, but let’s be clear: A leopard doesn’t change their spots and a tax-hiker doesn’t change their ways,” Bradford said.

He didn’t say he’s calling for a bigger tax hike, but did say supporting the budget by taking so much from the reserves simply isn’t sustainable.

“Mayor Chow is mortgaging Toronto’s future to pay for her re-election prospects in the fall,” he said.

Line-by-line spending review needed

Bradford has long called for a core services review for all city spending, an idea that Chow and her NDP allies on council have rejected. It’s the type of thing that should happen every five to 10 years, but it’s hard work and councillors might annoy someone.

The simple truth is that just because a program was created years ago doesn’t mean it needs to continue or be delivered in the same way. Without reviews, nothing gets looked at, nothing changes and taxpayers keep footing the bill for programs that no longer make sense.

It’s far easier, especially in an election year, to raid the reserves, take $30 million out of the Toronto Parking Authority and offer goodies like reduced TTC fares for frequent riders.

Chow’s budget is all about getting her re-elected and it just might work.