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The City’s Money, Good Government & Democracy

Published 2026-07-30 · part of the research library.

Every city service — transit, garbage pickup, parks, libraries — runs on money the city has to raise and account for honestly. This page is about where that money comes from, how the city decides who’s watching city hall itself, and what happens when residents want more of a say between elections. Some of these levers sit entirely with city council. Others need the province to say yes first.

Where things stand

  1. Toronto’s 2026 operating budget is $18.9 billion. The city faced an opening budget gap that grew from an early outlook of about $1.07 billion to an adjusted $1.34 billion once new pressures were counted — and over the next ten years, the pressures add up to about $46.5 billion. This is not one bad year; it is the shape of the system, driven partly by a property-tax base that doesn’t grow with the economy the way income or sales taxes do.
  2. Toronto property tax bills are still based on what homes were worth on January 1, 2016. Ontario paused property-value reassessment; that freeze was supposed to last four years — Toronto is now in year ten of it. The freeze doesn’t change how much the city collects overall, but it quietly changes who pays what. In January 2026, the city asked the province for new revenue tools, like a share of the sales tax, and the province said no.
  3. Ontario’s Ombudsman reviewed closed-door municipal council meetings across the province in 2023–24 and found that 42% of the reviews it completed found the open-meeting rules were broken.
  4. Toronto’s Integrity Commissioner logged a record 60% jump in formal complaints in 2024, closing 91% of them within the same year. But the only penalty on the books for a proven code-of-conduct violation is a reprimand, or a council-decided pay suspension capped at 90 days — council itself decides whether to impose even that. The municipal sector’s own association has asked the province for real financial penalties and standardized training for integrity commissioners.
  5. Across Ontario, municipal revenue comes roughly 39.5% from property taxes, 18.7% from provincial grants, 18% from user fees, and 4.3% from federal grants.
  6. Cities elsewhere have tried letting residents directly decide how some public money gets spent. Paris lets residents propose and vote on about €100 million of city projects every year, and participation grew from 40,000 people to 158,000 in three years. In Brazil, cities that adopted this kind of citizen budgeting shifted money toward sanitation and health, and infant deaths fell 5–10% compared with similar cities. It doesn’t always last: Montreal ran a $101.5 million citizen budget over three rounds, then ended it during a budget crunch.
  7. The City recently settled new four-year contracts (2025–2028) with its two largest unions, CUPE Locals 79 and 416. Separately, the city’s own solid-waste general manager told council in 2024 that a 2011 decision to contract out west-of-Yonge garbage collection now costs about the same as running the service in-house — council renewed that contract anyway, for up to seven years through 2033, while also directing staff to study bringing it back in-house. That study reported in June 2025: it found in-house delivery would run modestly cheaper per year by 2031, but would need substantial up-front spending on new yards and fleet. The choice remains open.
  8. On climate-related city finances specifically: Toronto has issued eight green-debenture bond transactions of $100–300 million each since 2018, and the Toronto Atmospheric Fund runs on $78 million in endowments from all three governments without drawing on the tax base.

What the city controls vs. what needs the province

The city can act on directly: planning its budget multiple years ahead instead of one year at a time, and banking surplus years instead of spending them; running citizen budgeting at a larger scale (even 1% of the capital budget is about $60 million a year); creating a standing residents’ council that city hall must formally answer to, in writing; publishing more city information proactively instead of waiting for freedom-of-information requests; deciding how it staffs, contracts, and negotiates with its own workforce; giving its own Integrity Commissioner a stronger accountability tool, within the limits council itself sets.

Needs the province: setting a date to update property assessment values; granting the city any new tax power, such as a share of the sales tax (already asked for, already refused as of January 2026); giving council real financial penalties it can impose on its own members for proven misconduct, rather than only a capped pay suspension; comprehensively reviewing the 30-year-old law governing what municipal information the province can demand and how residents can access it.

One honest gap: the sources behind this page don’t yet say much about how well city services actually get delivered day to day, or about newer ideas for direct democratic participation, beyond the citizen-budgeting examples above. A related topic — how the city collects, protects, and governs residents’ personal data — is covered on the Technology, AI & the Automated City page instead of here, to avoid duplicating it.

Go deeper

How this connects to the election

Several of the levers described above sit with Toronto’s city council and mayor; the province controls others directly, as noted above. A resident who wants to ask a candidate for city council or mayor what they would do about any of these levers can use the neutral, non-partisan candidate question bank for this category — every question there works identically for any candidate, any party. This page does not endorse, score, or rank any candidate or party, and does not direct a reader to any organization or campaign.

Sources & receipts

  1. City budget gap and ten-year pressure figures — City of Toronto budget documents; see the property-tax backgrounder above (fact 1).
  2. 2016 assessment freeze and the province’s January 2026 refusal of new revenue tools — see the property-tax backgrounder above (fact 2).
  3. Ontario Ombudsman 2023-2024 Annual Report (fact 3).
  4. 2024 Annual Report, Office of the Integrity Commissioner (fact 4).
  5. Functional Foundations: AMCTO's 2025 Provincial Election Priorities (fact 5).
  6. Paris, Brazil, and Montreal participatory-budgeting figures — see the participatory budgeting backgrounder above (fact 6).
  7. CUPE contract terms and the west-of-Yonge garbage-collection study — see the city workforce backgrounder above (fact 7).
  8. Green Debenture Program; Toronto Atmospheric Fund endowment figures via the Fund’s own audited financial statements (fact 8).