Join Date: Oct 2002
Car: A decent one
Originally Posted by mirek
Toronto's debt just from last year is 700 million, overall I believe Toronto is in about 3,000,000,000. 3 Billion dollars...
And yet people get angry at the striking workers instead of the Management.
Here's a good article from March 2007:
Toronto's debt, spending rise in capital budget
Last Updated: Thursday, March 8, 2007 | 10:39 AM ET
Toronto city councillors approved a $1.4-billion capital budget Wednesday that will see the city's debt and spending grow, even as a backlog of repairs sit idle.
The capital budget plan includes the construction of a police training centre in Etobicoke, renovations at City Hall and creation of new bicycle lanes.
More than half of the overall budget, $717 million, will be spent on public transit, such as the purchase of new buses and subway cars.
Mayor David Miller pointed to the expenditure as unsustainable, stressing the need for long-term funding from the federal and provincial government.
"That's the key thing. That is the driver of all the financing in the city of Toronto — the need to pay for public transit," Miller said.
Debt to rise over $3B in 2011
City councillors were concerned about Toronto's debt which is expected to grow from $2.6 billion this year to more than $3 billion in five years.
Coun. Denzil Minan-Wong called the budget a short-sighted one that will dig the city into a deeper hole.
He questioned the $3 million approved for renovations to expand the mayor's office and committee rooms at City Hall.
"It's about choices and the mayor made his choice and that was to fix his office and buy new office furniture," said Minan-Wong.
Meanwhile, the backlog of road work stands at more than $300 million and work on park and recreation facilities is nearly $200 million.
Debt could hurt day-to-day services
About 10 per cent of Toronto's tax revenue this year will go toward paying off the debt and is set to increase to 15 per cent in five years.
Toronto's chief financial officer Joseph Pennachetti said the city will be in trouble if the debt goes any higher.
"The increase in debt is going to be a burden that actually does impinge on providing the day-to-day core municipal services to our residents," he said.
But while the debt is growing, budget chair Shelley Carroll said, the city doesn't have a choice.
"What we are looking at is those things that just can't wait," she said. "All of it is based on the citizens' needs, this city's health."
And that was followed by this on Dec 12, 2007:
Toronto's `spiralling' debt to hit $2.6 billion in 2008
Budget chief says the city doesn't have an option as capital budget includes TTC expansion funding
city hall bureau
The megacity is another year older and deeper in debt.
In the 10 years since the amalgamated Toronto was formed, net debt has risen from less than $1 billion in 1998 to $2.4 billion in 2007.
"The debt is spiralling out of control," Councillor Doug Holyday told reporters yesterday as city council voted 34-10 in favour of next year's proposed capital budget, which is expected to push the debt level to $2.6 billion in 2008.
As borrowing escalates, so does the cost of paying it back. Interest and principal payments are expected to rise by $40 million to $443 million in 2008, making debt repayment the second biggest expense in the operating budget after the police department.
Just less than half of the $1.6 billion in capital spending proposed for 2008 goes to the transit system to buy buses, streetcars and subway cars, as well as new signals to make the Yonge subway line run better.
The second-largest item is for roads, at 16 per cent of the total budget. But the spending won't be enough to reduce the backlog of road repairs – expected to grow from $300 million to $400 million over the next five years.
About one-third of the $1.6 billion it will cost to maintain and upgrade the city's hard assets next year will come from borrowing. One-third will come from property taxes and reserves, and a third from the provincial and federal governments.
Budget chief Shelley Carroll described the debt picture as "a huge worry, but at the same time, we don't have an option. The riders are coming to the Toronto Transit Commission regardless of the fact that we haven't really given them the capacity.
"In terms of the environmental plan, given the federal government seems to be abdicating its responsibility, you bet it's a priority," she said, responding to Holyday's critique as to whether the city could afford to "break the bank" trying to be a world leader on the environment. "As is happening all over the world, cities are having to take the lead because federal governments don't seem to be able to move fast enough to save our environment."
Council also unanimously endorsed a plan to offer tax incentives to businesses that make substantial investments in the city.
The move comes as Toronto continues to lose jobs including well-paying manufacturing positions to elsewhere in Greater Toronto Area, where land values are cheaper and property taxes are lower. Since 1990, Toronto has lost 54,000 jobs, while the 905 area has added more than 700,000 jobs.
Under the plan, current property taxes will still apply. But when particular industries pour money into a property, driving up the property value and by extension, property taxes, the city will collect only a partial amount of the additional taxes generated over the first 10 years.
"It's using some of the increase in tax revenue to give a little subsidy," said Mayor David Miller. "It will allow us to welcome new jobs and new prosperity."
Councillor Kyle Rae, who spearheaded the plan that will be finalized in April, said it will allow Toronto to compete with other cities.
Ten U.S. states have economic development offices in Toronto whose sole job is to lure investment south of the border, Rae said.
The tax incentive plan will only apply to certain industries such as film, food and beverage manufacturing, biotech and information technology. The city has never offered tax incentives to lure business here, except in a small pilot project in south Etobicoke.
Last edited by Miguel; 06-25-2009 at 05:27 PM.