Why Toronto may defer some infrastructure work — even as backlog grows

The City of Toronto’s 2026 budget offers relief many homeowners were looking for in its property tax increase, but it also lays bare the massive amount of infrastructure work hanging over the city in the coming years which, in some cases, may be deferred. 

With budget season now in full swing at city hall, several city departments will sit in front of the budget committee this week to give presentations on their financial needs this year.

Among them will be the parks and recreation department, which is caught up in a nearly $2 billion deferral of work in the 10-year capital plan, which is the city's plan to maintain, renew and grow infrastructure.

That work was supposed to be funded by development charges that builders pay to the city, but recent provincial legislation made it so developers could pay those fees once their buildings are occupied, as opposed to when they get their building permits.

The change means the city will receive that revenue years later than under the previous rules, so the work it would fund has to be put off, according to city budget documents.

Under the proposed 2026 budget, the parks department would see a $214 million reduction in its 10-year capital plan. That deferral will hit community centre projects the hardest, Stephen Conforti, the city’s chief financial officer, told reporters after the budget launch. 

“You’re looking at almost a cascading deferral across the entire plan,” he said. “Where project one may get pushed out 18 months, then project two, and so-on and so-forth.” 

The capital plan for libraries would also see a $76 million deferment and waste services would take a $6 million hit; the impacts of the change could extend to budgets for water services and roads in 2027. 

Overall, the funds for the 10-year capital plan would increase slightly under the proposed 2026 budget, by about $3 billion to $63.1 billion. But the need to maintain assets — work known as state of good repair — makes up a little more than half of the plan and is outpacing the funding for it, according to the budget presentation made last week. 

State of good repair work can range from massive projects to smaller things Torontonians might take for granted. 

One example in the 2026 budget is street light infrastructure, about one-third of which is considered past its useful life. That means the assets are becoming more costly to maintain and require urgent investment. 

Last year, the city passed a capital budget with a historic spending increase meant to flatten the backlog’s curve. In 2025, the projected state of good repair backlog in 2033 was $16.8 billion, down about $6 billion from the previous year’s projection.

While it’s still a small improvement from two years ago, the 2033 projection is back up to $21 billion this year. 

One of the key pressures on the backlog, per the budget presentation, is that the city is limited in how it can find money to pay it down. The city is responsible for 60 per cent of infrastructure in Toronto while only receiving nine per cent of tax revenue, with the rest flowing to higher levels of government.