Mayor Olivia Chow’s 2026 budget proposal was approved by the city council on Tuesday with unanimous support, albeit with some modifications. The budget features a moderate 2.2 percent increase in property taxes, the lowest rate seen during Chow’s tenure. Emphasizing affordability, the mayor highlighted her budget’s aim to enhance residents’ financial well-being during a recent news conference.
The total operating budget for 2026 is set at $18.9 billion, with property taxes covering 31 percent and federal and provincial funding making up 24 percent. Additional funding sources include rate programs (12 percent), transit fares (six percent), and reserves (nine percent). Mayor Chow submitted her budget plan on February 1, building upon a staff proposal from January 8.
Before the council’s deliberations, Chow outlined the budget’s objectives to foster a more affordable, caring, and safer environment in Toronto. This includes initiatives such as fare freezes for the TTC, school meal programs, and increased funding for emergency services.
To finance the minimal property tax hike, Mayor Chow explained that revenue generated from increased taxes on home speculators and luxury homebuyers in the top two percent played a crucial role. However, some, like Coun. Brad Bradford, questioned the timing of the tax increase reduction in an election year, expressing concerns about its sustainability.
Modifications to the proposed budget were made during the council meeting, with unallocated funds of approximately $2 million being distributed across various initiatives. These include allocations for rat and coyote response plans, a youth-innovation hub, and funding for free school trips at the Toronto Zoo.
The budget also allocates $6.2 million towards youth violence prevention programs, contingent on future federal funding. Councillors emphasized the importance of these programs for the community, underscoring the need for support from other levels of government to sustain them effectively.
Earmarked for the Toronto Transit Commission (TTC), the budget includes nearly $1.48 billion to cover operational costs and affordability measures like fare freezes and fare capping. Mayor Chow aims to implement free rides for TTC users after 47 trips per month, starting in September.
In a significant move, the Toronto Police Service will receive a $93 million funding increase, totaling $1.43 billion. Mayor Chow defended the increase, citing the need to honor collective agreements and support the ongoing hiring plan within the police service.
To bridge a financial shortfall, the budget involves drawing approximately $400 million from the city’s reserve funds. While concerns were raised about the long-term impact of this move, Mayor Chow reiterated the necessity of using the reserves for their intended purposes.
The budget adjustments also include increased funding for small businesses through a 20 percent reduction in property taxes and additional support for housing and social services based on public feedback. Overall, the budget reflects Mayor Chow’s commitment to enhancing affordability and addressing key community needs.