In response to a nearly $1.8 billion operating budget shortfall, homeowners in Canada’s largest city, Toronto, could see a property tax increase in the double digits. The proposed 2024 budget unveiled today outlines a 9% property tax hike for residential properties, along with a 1.5 per cent increase to support a fund dedicated to transit and housing initiatives.

For the average Toronto home, this could translate to an additional cost of approximately $31 per month or just over $370 annually, according to city estimates. The proposed budget aims to address “significant budget pressures” driven by increased demand for refugee claimant support, shelter spaces, and reduced transit revenues.

The city claims to have identified $600 million in savings to alleviate the budget challenges. The proposal is contingent on the federal government fully reimbursing costs related to supporting refugee claimants, estimated to be $250 million for 2024.

Toronto Councellor Shelley Carroll, the chair of the city’s budget committee, emphasized that if Ottawa fails to provide the expected funding, she will have “no choice” but to propose an additional six per cent levy on homeowners to cover those costs.

Carroll explained that the 2024 tax increase could have been lower if the city had not kept property tax increases artificially low in the past. She underscored the need for a prudent and wise approach to chart a new course for the city’s financial sustainability.

A report released last summer on the city’s budget outlook projected a $1.5 billion shortfall for the year, highlighting a combined operating and capital pressure of $46.5 billion over the next decade. The report suggested various measures to address the budget crisis, including a progressively increased land-transfer tax on high-value homes, raising the vacant homes tax from one to three per cent, and introducing a new commercial parking levy alongside higher fees at on-street parking meters.