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It’s done — Toronto city council finalized Mayor Olivia Chow’s 2026 budget at a special meeting Tuesday.
The budget includes a 2.2 per cent residential property tax increase, maintains a TTC fare freeze, expands the child nutrition program and grants a budget increase to the city’s embroiled police service.
Chow told councillors the nearly $18.9-billion spending plan — the last budget of her three-year term — is about “building a city that’s more affordable.”
The property tax increase is far below her two previous budgets, which saw hikes of 9.5 per cent in 2024 and 6.9 per cent in 2025, something she said was made possible due to earlier investments.
“You’re seeing the result of the tough work that we did together for those two years,” Chow said.
The budget, which passed in the chamber without significant amendments on Tuesday, offers little expansion to city services, instead largely maintaining programs built up in the past two years.
Its few service enhancements include expanding the student nutrition program to cover over 62,000 new students, buying more air conditioners for low-income residents, adding rental inspectors and opening libraries seven days a week.
The property tax increase was approved 19 to 5, opposed by councillors Brad Bradford, Stephen Holyday, Vincent Crisanti, James Pasternak and Anthony Perruzza.
Criticism of the use of reserve funds
Bradford (Beaches-East York), who plans to run for mayor in October after finishing eighth with less than two per cent of the vote in 2023, was one of a few councillors criticizing the budget. He charged the mayor with advocating an unsustainable budget that dips too much into reserve funding.
“You are effectively trying to buy Torontonians’ votes with this budget,” Bradford said, accusing Chow of an artificially low tax rate.
Chow, who has not yet declared whether she’ll seek reelection but is expected to, rejected the claim and pointed to Bradford’s attempt to use reserve funds last year to give local businesses tax relief amidst U.S. tariffs.
Around nine per cent of this year’s budget is being funded by drawing from the city’s reserve, a roughly $400-million increase from last year.
Holyday (Etobicoke Centre) also criticized the budget’s higher use of city reserves and moved motions to remove the TTC fare freeze, raise fares and implement fares for children under 12.
“The three motions each reduce the reserve fund draw,” Holyday said, requesting the installation of a red light in council to symbolize the city “running on fumes” of reserve funds.
All three motions were rejected by over 20 of 26 votes.
The largest share of the budget is funded by property tax revenue, followed by provincial and federal funding and program revenue. It also includes a previously approved increase to the land transfer tax of homes valued over $3 million and a 20 per cent property tax break for small businesses, increased from 15 per cent.
The city also passed its largest ever capital budget, which makes investments to projects like roads and public housing over the next 10 years, and also postpones the expansion and building of new community centres.
What’s in the 2026 spending plan?
The TTC budget is the biggest single spending item in the municipal budget, with spending increasing around $94 million from last year to $1.48 billion after deducting revenue.
It includes a freeze of fares for the third-year straight and the start of fare capping in September.
The budget for the Toronto Police Service is the city’s second biggest expenditure, with council voting to increase its funding by $93.8 million to $1.43 billion after deducting revenue.
Chow defended the increase, which comes amid a corruption scandal that has seen seven active police officers charged criminally, saying the bump was previously agreed upon.
“It was negotiated last year and needs to be honoured,” she said at a press conference before council’s meeting began.
Toronto police staff at the budget debate said that around “90 per cent of the police budget is labour,” with the increase going towards a multi-year hiring plan and wages agreed in collective bargaining.
During council, Chow hammered home the idea that her spending plan is an affordability budget, repeating goals from her early February memo about “building a more affordable, caring, and safe Toronto,” where people working in the city can also afford to live in it.
One area facing a cut in this year’s budget is shelter services, with expenditures sinking by about $126 million, from $912 million to $786 million.
In a prepared overview, city staff said the reduction is due to a decline in demand from refugee and asylum seekers and the scheduled closure of temporary shelter hotels. An average of over 100 people were turned away daily from shelters in 2025, according to city data.
The city is also continuing a hiring freeze on non-essential workers in 2026, first implemented in 2025.
Gabriel is a reporter for OTR in Winter 2026.
No AI tools were used in the production of this story.
