Agenda

This meeting of the Executive Committee will be conducted with members participating in person and remotely.

Members of Council, City Officials, and members of the public who register to speak will be provided with the video conference details closer to the meeting date.

To provide comments or make a presentation to the Executive Committee

The public may submit written comments or register to speak to the Committee on any item on the agenda. The public may speak to the Committee in person or by video conference.

Written comments may be submitted by writing to exc@toronto.ca

To speak to the Committee, please register by email to exc@toronto.ca or by phone at 416-392-7033. Members of the public who register to speak will be provided with instructions on how to participate in to the meeting.

Special Assistance for Members of the Public: City staff can arrange for special assistance with some advance notice. If you need special assistance, please call 416-392-7033, TTY 416-338-0889 or e-mail exc@toronto.ca.

Closed Meeting Requirements: If the Executive Committee wants to meet in closed session (privately), a member of the Committee must make a motion to do so and give the reason why the Committee has to meet privately (City of Toronto Act, 2006).

Notice to People Writing to the Executive Committee: The City of Toronto Act, 2006 and the City of Toronto Municipal Code authorize the City of Toronto to collect any personal information in your communication to City Council or its Committees and Boards. The City collects this information to enable it to make informed decisions on the relevant issue(s). If you are submitting letters, faxes, e-mails, presentations or other communications to the City, you should be aware that your name and the fact that you communicated with the City will become part of the public record and will appear on the City’s website. The City will also make your communication and any personal information in it - such as your postal address, telephone number or e-mail address - available to the public, unless you expressly request the City to remove it.

If you want to learn more about why and how the City collects your information, write to the City Clerk's Office, City Hall, 100 Queen Street West, Toronto ON M5H 2N2 or call 416-392-7033. 

toronto.ca/council

This agenda and any supplementary materials submitted to the City Clerk can be found online at www.toronto.ca/council. Visit the website for access to all agendas, reports, decisions and minutes of City Council and its Committees and Boards.

Declarations of Interest under the Municipal Conflict of Interest Act

Speakers/Presentations - The speakers list will be posted online at 8:30 a.m. on August 24, 2023.

Communications/Reports

The City Manager and the Interim Chief Financial Officer and Treasurer recommend that:

1. City Council acknowledge the magnitude of the City's financial challenges amount to $46.5 billion and commit to exploring and implementing a wide range of solutions to address the fiscal gap.

2. City Council approve graduated Municipal Land Transfer Tax (MLTT) rates for high value residential properties containing at least one, and not more than two, single family residences, by introducing additional thresholds as follows:

a. Direct the Chief Financial Officer and Treasurer to implement graduated MLTT rates effective for all transactions registered or upon which MLTT otherwise becomes payable on or after January 1, 2024;

b. Amend City of Toronto Municipal Code Chapter 760, Municipal Land Transfer Tax to reflect the changes detailed above;

c. Authorize the Chief Financial Officer and Treasurer to amend the City's Collection Agreement with Teranet to allow Teranet to collect the Municipal Land Transfer Tax in accordance with these changes.

3. City Council amend Subsection 179-7D of the Toronto Municipal Code to delete the restrictions on the limited delegated authority currently provided to the Toronto Parking Authority (TPA) and to delegate authority entirely to TPA to fix rates for on-street parking meters or parking machines, specifically to delete the words “such rates do not exceed $5.00 (inclusive of HST) per hour and have been agreed to by the Ward Councillors for the Ward in which the parking meters or parking machines are located,” and impose a condition that the TPA consult with "the Ward Councillor(s) for the Ward(s) in which the parking meters or parking machines are located” prior to the fixing of rates.

4. City Council direct the City Manager and the Chief Financial Officer and Treasurer to develop a multi-year approach for the remaining term of City Council when recommending property tax rates and policies.

5. City Council direct City Officials to report back in advance of City Council's consideration of the Mayor's proposed 2024 Budget, as follows:

a. The Chief Financial Officer and Treasurer with an implementation plan to introduce a land transfer tax on foreign buyers of residential property in the City including a recommended tax, collection and enforcement design, estimated revenues and required timelines for implementation by the end of 2024.

b. The Chief Financial Officer and Treasurer on the development of a levy on commercial parking within the City with an implementation plan including a recommended tax, collection and enforcement design, estimated revenues and required timelines for implementation in 2025.

c. The City Manager to develop an implementation plan, estimated revenues and required implementation timelines to introduce a 911 levy dedicated to fund Next Generation 911 and associated costs.

d. The Deputy City Manager, Corporate Services, in consultation with the Chief Executive Officer, CreateTO, on a review of all City-wide surplus and underutilized real estate assets with a recommended strategy for disposition or change in use as required, with priority consideration given to opportunities which may:

1. Be leveraged to support affordable housing initiatives;
2. Enhance the City's revenue generating potential and/or contribute to the City's goals of long-term financial sustainability; or
3. Allow for joint ventures or partnerships which benefit the local community.

e. The General Manager, Economic Development and Culture, in consultation with the Chief Financial Officer and Treasurer and the Chief Planner and Executive Director, City Planning, as part of their review of the Imagination, Manufacturing, Innovation and Technology (IMIT) Financial Incentive Program, to evaluate the effectiveness and outcomes of financial incentives provided under the program to date, and to recommend changes to the design, program objectives or eligibility criteria in consideration of immediate and longer-term financial and economic impacts, including options to restructure the IMIT Program through amendments to the Community Improvement Plan, or a dissolution of the Community Improvement Project area; and

f. The Chief Financial Officer and Treasurer, in consultation with the Chief Planner and Executive Director, City Planning, the General Manager, Economic Development and Culture, and the City Solicitor, to complete all procedural and statutory requirements including undertaking a Development Charges Background Study, and bring forward an amendment to the development charges by-law that would remove the non-residential non-ground floor exemption, for Council consideration, or at such a time that the Background Study is complete.

6. City Council direct the Chief Financial Officer and Treasurer, to include, in the report on the Status of the Vacant Home Tax Implementation planned for the fourth quarter of 2023, an analysis of the feasibility of increasing the existing Vacant Home Tax rate from one percent tax of the current value assessment of the residential property on which the vacant unit is located to three percent.

7. City Council direct the Executive Director, Environment and Climate Division to:

a. Report by the fourth quarter of 2023, with a proposed by-law that would require existing buildings in Toronto to annually submit to the City of Toronto building-level performance data, including but not limited to emission data, energy data, water data, and building characteristic information; and

b. Report in 2024, with a proposed by-law that would require existing buildings in Toronto to meet specific greenhouse gas emissions performance standards.

8. City Council request the Province of Ontario to authorize the City of Toronto under the City of Toronto Act, 2006 and/or required regulations, to be able to implement new revenue tools reflective of the City's responsibilities and contributions to the economy, including specifically a Municipal Sales Tax that applies to the purchase of goods and services in Toronto.

9. City Council direct the City Manager to continue advocacy efforts with other orders of government and, should authority be granted under the City of Toronto Act, 2006, to report back with a proposed implementation plan including recommended tax, collection and enforcement design, estimated revenues and timelines in 2024, on the introduction of a Municipal Sales Tax.

10. City Council inform the Province of Ontario that the City is unable to implement the previously announced 978 new long-term care home beds in the City in the absence of a revised funding model, currently planned for introduction in future years.

11. City Council direct the City Manager to continue discussions with the Province of Ontario and Metrolinx regarding the urgent need for funding transit operations and maintenance for Eglinton Crosstown (Line 5) and Finch West (Line 6) in recognition of the City’s immediate financial challenges.

12. City Council inform the Province of Ontario, that in the absence of a new funding model for transit operations in the City of Toronto commensurate with the scope and demands of the largest public transit system in Canada, the City will pause negotiation of further funding agreements for the Provincial Priority Transit Projects and any future provincial transit expansion projects.

13. City Council direct the City Manager to continue to advocate with the provincial and federal governments for a new fiscal framework that is commensurate with the complexity and scope of municipal services delivered by the City of Toronto, including those that are delivered as extensions of other orders of government or that benefit the Greater Toronto and Hamilton Area region, and City Council inform the provincial and federal governments, in the absence of a new fiscal framework, the City will be required to reduce essential service levels and cancel capital projects, including those that contribute to intergovernmental priorities.

Following the 2023 Budget Process, the City, with the support of an independent third-party, updated its financial model to assess the long-term fiscal risks anticipated in the next 10 years. This updated analysis was presented to City Council in March 2023 and indicated that the City faces a combined operating and capital pressure of $46.5 billion over 10 years, a pressure which has been created over decades. The analysis represented the City's first 10-year consolidated operating and capital financial model.

The purpose of this report is to provide an updated Long-Term Financial Plan (LTFP) which identifies and considers immediate and long-term opportunities to address the City's fiscal challenges, including options to review operating expenditures, financial incentives, new and existing revenue tools, capital prioritization, asset transactions, and intergovernmental funding arrangements.

From the opportunities identified in Attachment 1, staff have assessed these and are recommending implementation or further exploration of a subset of options, some of which are expected to realize financial benefits as early as 2024. However, it's important to highlight that these actions alone will not be sufficient to address the City's fiscal risks in 2024 or over the next 10 years. It will require continued collaborative efforts with City Council and other orders of government to promote the long-term financial sustainability of the City, and to ensure the City continues to generate financial benefits for the Province and for Canada. Further, it's critical to note that, given the urgency of the financial challenges ahead, inaction is not an option at this time to address the City's financial sustainability and urgent 2024 financial needs.

As the economic engine of Canada, the City of Toronto currently delivers services, initiatives and projects that far exceed the traditional role of municipal government, and which substantially benefit the region and other orders of government. In addition, the City is faced with growing demands for services and infrastructure, for which the City is not able to capture the benefits of growth. This is unlike the provincial and federal governments whose funding tools are indexed with the growth of the economy, such as income and sales taxes. Rather, the City is unable to keep up with the costs of delivering both the upfront infrastructure requirements associated with growth, or the ongoing and sustained demand for services.

While the City has limited revenue tools and strategies available under the City of Toronto Act (COTA), the LTFP makes every effort to address the City's financial challenges on its own. However, ultimately, the City's existing revenues do not match the complexity or the level of expenditures incurred. As will be demonstrated in this report, without a new fiscal framework for municipalities or sustained long-term funding support commensurate with City responsibilities, the City will have no choice but to further consider reduction of service levels and cancellation of capital projects.

Pending Council's consideration and direction, staff will initiate additional review, analysis and implementation plans of identified options, and report back as indicated below. The LTFP can be leveraged to guide future decision-making by Council with a focus on long-term planning and financial sustainability.

As was noted in the 2023 Financial Update and Outlook presented to City Council in March 2023, the City faces material fiscal risks over the next 10 years, including a combination of increasing annual operating pressures, additional debt servicing costs, and a growing list of capital needs, totalling $46.5 billion.

As these pressures will be experienced as early as 2024, there are two priority components which are included in this total figure:

- $1.5 billion in anticipated 2024 opening operating budget pressures, consistent with what was reported during the 2023 budget process; and

- $29.5 billion in unfunded capital needs over the 10-year planning period.

The City's 10-year outlook may be further worsened in light of recent legislative changes and in the absence of full funding support for ongoing pandemic-related impacts. For example, due to the Province's introduction of Bill 23, the City estimates that there will be reduced development-related revenues of $2.3 billion over the 10-year period. In the absence of the City being fully reimbursed by the Province for the lost revenues as a result of Bill 23, and without new financial and policy tools, the City will not be able to provide the services and investments essential to support growth in the short or long term.

While some of the recommendations contained in this report are expected to realize financial benefits as early as 2024, it's important to note that these actions alone will not be sufficient to address the City's fiscal risks in 2024 or the 10 year period, and will require continued collaborative efforts with City Council and other orders of government to ensure the long-term financial sustainability of the City or else the City may have no choice but to consider reduction of services, increased taxes, or cancellation of capital projects.

Additional information regarding potential financial benefits associated with the opportunities discussed in this report is contained in Attachment 1.

Mayor Chow recommends that:

1.  City Council direct the City Manager, in consultation with the Deputy City Manager, Development and Growth Services, to work with all of the agencies, boards, corporations, and divisions at the City of Toronto to assess preliminary cost estimates, to create a plan, and an implementation framework and timeline to achieve 25,000 new rent-controlled homes by: 

a.  Increasing the affordable housing target by a minimum of 7,500 affordable homes, of which a minimum 2,500 are new rent-geared-to-income homes; and

b.  Adding a new target for 17,500 rent-controlled homes.

2.  To support the above recommendation, City Council direct the Deputy City Manager, Development and Growth Services to report back in Q4 2023 on:

a.  an effective alignment of resources, mandates, structure, and personnel of all City of Toronto agencies, boards, commissions, corporations and divisions, in particular Toronto Community Housing and CreateTO, that would enable the City of Toronto to build new public and community housing in collaboration with co-ops, non-profit housing providers, governmental organizations, and other partners;

b.  current suitable parcels of City lands that are available for development purposes; and

c.  identification of housing-ready sites that are immediately available and suitable, including land owned by the City, co-ops, non-profit housing providers, governmental organizations, and other partners.

3.   City Council, as Shareholder, request the Board of Directors of Toronto Community Housing to work with the Deputy City Manager, Development and Growth Services to undertake the development of complete communities on TCHC lands and properties through revitalization, redevelopment or stand-alone developments on existing sites; and create a model that includes staff and TCHC Board members to initiate and carry out this work.

We are facing an unprecedented housing crisis. Each year, more of our friends and neighbours are losing their homes or finding it impossible to afford a place to live. Newly-arrived refugees find themselves in shelters, church basements, or sleeping on the street. Seniors are forced to work beyond retirement age or watch their rent take up a greater share of their fixed incomes. Families are facing exploding mortgage prices that push their finances under water. Young people are having trouble starting a family and some are forced to move out of the city. People experiencing intimate partner violence can’t afford to move to safety. Employers struggle to hire workers who can afford to live in the city. 

While thousands of new homes are built in the city every year, it is not enough to address the affordability crisis we’re facing.  We must act with urgency and a renewed determination to make sure everyone can find a place to call home. 

As Mayor, I have committed to building 25,000 more homes above what the City is already planning. This is my top priority. Today, I am asking staff to take the necessary actions to start making this commitment reality. 

With the right tools and resources in place, we can build new affordable housing, create stronger and more caring communities, and ensure a better quality of life for all residents.

Together, we can build the affordable housing people need and deserve. With this motion we take the first step.