Toronto’s 2026 budget puts affordability first, Chow says

The City of Toronto’s 2026 budget will prioritize affordability and will include a lower tax increase than the city has seen in recent years, Mayor Olivia Chow said ahead of the budget’s reveal Thursday morning. 

Property taxes in Toronto are set to increase at 2.2 per cent, Mayor Olivia Chow said in a statement on Wednesday. 

The budget was made to improve affordability for residents, Chow said at a news conference on Thursday before the budget committee meeting.

“If you work here, you should be able to afford to live here,” Chow told reporters on Thursday.

The total tax increase includes a 0.7 per cent bump to the residential property tax and a 1.5 per cent increase to the city building levy.

Chow said the budget will also outline funding for school meal programs, a TTC fare freeze and fare capping at 47 rides a month.

“We make the budget more fair by shifting the burden from families like yours to speculators and luxury property buyers,” Chow said, citing the increase to the municipal land transfer tax (MLTT) on houses valued at more than $3 million, which council voted in last month. 

The budget also includes a five per cent tax cut for small businesses in the city, according to the city’s budget chief and councillor for Don Valley North, Shelley Carroll. 

“This is not a one-year decision” Carroll said at the news conference. “It's part of an intentional planned reduction as part of our multi-year strategy to get Toronto's finances back on track.” 

Torontonians saw a 6.9 per cent increase to property taxes last year and a 9.5 per cent increase in 2024.

When Chow took office in 2023, there was a $1.8 billion deficit in the city’s operating budget. 

Chow said after years of higher taxes to reduce the hole in the city’s budget, the city’s finances have stabilized. 

The shortfall has been reduced to $1 billion, Carroll said on Thursday. And the municipal government’s credit rating has increased for the first time in 23 years to AA+, according to a release from Chow’s office. 

It’s the last year the city’s new deal with the province will be included in the budget, but Chow said negotiations to renew the deal with Ontario Premier Doug Ford are underway.