Mayor Olivia Chow’s proposed 2026 budget was approved unanimously with modifications at the city council meeting on Tuesday. The budget features a modest 2.2% increase in property taxes, the lowest hike seen during Chow’s tenure. Emphasizing affordability, Mayor Chow stated during a previous news conference that the budget’s primary focus is to enhance residents’ financial well-being.
The total 2026 operating budget amounts to $18.9 billion, with property taxes covering 31%, and federal and provincial funding making up 24%. Other financial sources include rate programs (12%), transit fares (6%), and reserves (9%). Mayor Chow submitted her budget proposal on February 1, building upon a city staff proposal presented on January 8.
Before the council meeting, Mayor Chow highlighted the budget’s objectives to make Toronto more affordable, compassionate, and secure. Initiatives such as fare freezes for the TTC, school meal programs, and increased emergency services funding were emphasized.
The lower property tax increase was made feasible by revenue generated from increased taxes on home speculators and the top two percent of luxury homebuyers. Some council members, including Coun. Brad Bradford, raised concerns about the timing of the reduced increase in an election year, although Mayor Chow has not confirmed her re-election plans.
The proposed budget saw changes during the meeting, with approximately $2 million in unallocated funds. A motion by Coun. Shelley Carroll allocated these funds to eight different initiatives, including responses to rat and coyote issues, a youth-innovation hub, and funding for school trips at the Toronto Zoo.
Additionally, the budget includes increased funding for youth violence prevention programs, with $6.2 million earmarked, expecting federal support at a later stage. The city emphasized the importance of external funding for such crucial programs.
Other amendments to the budget included funding for various community projects and a 20% reduction in property taxes for small businesses. Public feedback prompted Mayor Chow to allocate half a million dollars for housing and social support services.
In addition to the property tax increase, the budget allocates nearly $1.48 billion to the TTC, meeting the agency’s funding requirements. This funding will support transit operations and affordability measures like fare freezes and fare capping.
Mayor Chow announced plans for TTC riders to travel free after 47 trips starting in September. Concerns were raised by Coun. Jon Burnside regarding freezing TTC fares, suggesting that inflation adjustments could result in fare reductions.
The Toronto Police Service will receive a $93 million increase, totaling $1.43 billion in the new budget. The funding aims to honor collective agreements, support the hiring plan, and address transparency issues within the service.
The budget includes an increase in funding drawn from the city’s reserve funds to address a $1 billion shortfall. Mayor Chow defended the use of reserves, stating that the allocated funds were intended for specific purposes. Some council members expressed concerns about the long-term implications of depleting reserve funds.
Despite reservations about reserve spending, some council members supported the initiative, citing it as a means to provide financial relief to taxpayers. The ongoing debate highlighted the significance of balancing financial stability with addressing residents’ affordability concerns.