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Notes for Remarks by His Worship Rob Ford, Mayor of Toronto on the launch of the 2012 Staff-Recommended City Budgets

The 2012 Budget - Rebuilding our Fiscal Foundation

November 28, 2011

Good morning everyone.

Just over 13 months ago, I was elected as Mayor of Toronto with a very clear mandate - to make RESPECT FOR TAXPAYERS the core value at City Hall.

The people of Toronto have been very clear about what they want. First and foremost, they want us to stop the waste, to reduce city expenses and to hold the line on taxes. They know we face difficult decisions. They expect us to be tough enough to make them.

On January 10th of this year, I stood before you to launch the City's 2011 Budget. I described it as the 1st stage of a 2-stage process. With that 1st stage, we brought a decade of out-of-control spending under control.

I explained that the 2nd stage of our process to rebuild Toronto's fiscal foundation would start in March as we began to prepare for the 2012 budget. Well, folks, as you know - it's been a busy year!

For the first time in Toronto's history, we launched a bold, comprehensive process to review the City's Finances, find efficiencies and identify ways to rebuild our crumbling fiscal foundation. We consulted with thousands of people. The 2011 budget process included more public consultation than any previous budget. And, we continued that consultation over the summer.

We held 8 public meetings and heard from over 1,200 people at consultation sessions. More than 13,000 people responded to the Service Review Survey. Committees and Council held more than 101 hours of debate and heard 574 deputants.

Council approved the results of the Core Service Review and the User Fee Policy in September. That process provided direction to staff to create this 2012 Staff Recommended Budget.

Rate Supported Budgets
But - before I get into too much detail on the Operating and Capital budgets, let me say a few words about our Rate Supported Budgets that go before Council for approval tomorrow.

Our WATER budget is in the 7th year of a 9-year program of rate increases to fund our $1.7 billion backlog of repairs. These increases are unfortunate, but they are the only way we can pay for the repairs we need to reduce basement flooding and water main breaks caused by our aging infrastructure.

It goes to show you how expensive it is to ignore our financial challenges. It is always more expensive later. That's why we must act NOW to Rebuild our Fiscal Foundation.

Rising costs for garbage collection were set to drive rates up by 4 per cent. However, because we acted to outsource collection in District 2, we will save about $11.5 million per year going forward. It is those savings, ladies and gentlemen, that mean Council can approve a 2012 Budget with NO increases to garbage rates for homeowners next year.

Operating & Capital Budgets
Back to our Operating and Capital Budgets.

I will not spend much time reiterating how we got into the mess we were in one year ago. It's enough to say that - for years - the City spent more money than it could afford, and kept increasing that unaffordable spending year after year, after year.

The growth in city spending was out of control and taxpayers were sick of it. I was elected - this Council was elected - to take action. We were elected to make tough decisions and to fix this problem once and for all. And that, ladies and gentlemen, is exactly what we're doing.

Last year, we slowed the growth in city spending to a fraction of what it had been. You will see in the City Manager's presentation later this morning, how the growth in city spending leveled off this year.

And, you will see how our 2012 budget will basically STOP that spending growth in its tracks. In fact, for the first time EVER - we will spend LESS next year than we did this year.

That's unheard of. But that's exactly what the taxpayers demand - and that's what this Council can deliver in this 2012 Budget.

Through our Core Service Review, service efficiencies and modest service adjustments, we found $355 million in savings this year. That's 10 per cent of our 2011 NET budget.

That $355 million is more than the amount of 1-time money we needed last year to balance our budget. That means we're closing the structural deficit. That's a tremendous success. It's the result of an intense year-long effort by City Staff, Committee Chairs and members of Council. As part of these savings, we will see the City's total work force reduced by over 2,300 employees. That's a significant change since April.

Ladies and Gentlemen, we've done something in Toronto that few city governments have done. We've begun the process of Reducing the Size and Cost of Government to a sustainable level. We've made huge strides in rebuilding our fiscal foundation.

It wasn't easy to get here - and, frankly, we're not quite there yet. We will reduce our 1-time draw on reserves from $346 million in 2011 down to about $83 million in 2012. That means, we still have more work to do.

But, we will close the rest of the gap next year, based on the savings that will come if we follow through on what we started this year.

The Staff recommended budget includes some modest service adjustments. With an opening pressure of $774 million, we were faced with some daunting prospects.

• We were faced with closing over 35 wading pools - Instead, we've managed to reduce that list to just 5 that are underused and require expensive capital spending - leaving over 100 wading pools in full operation.
• We were faced with closing libraries to save money for child care or emergency services - Instead, we've managed to avoid library closures by digging deep to find efficiencies in the library system.
• We were faced with the prospect of raising taxes 34 per cent to fill the $774 million hole - but we have been able to keep our property tax increase this year to a manageable 2.5 per cent - that's less than inflation.

Through all this, we have to remember the global economy is reeling and, while Canada is doing better than most nations, unemployment is up in Toronto. Average people are not getting raises and cannot afford to pay much higher taxes.

This Budget includes MORE funding for Ontario Works to help care for higher numbers of people who may require assistance in 2012.

We will also spend MORE money to help low income families access recreational programs through our Welcome Policy. And we will make it more fair by expanding the program so people can access support city-wide, NOT just at a few priority centres.

We will work to create an Economic Development Strategy to create jobs for people in Toronto and help drive assessment growth to further strengthen our fiscal foundation.

In the past year, we've accomplished a lot. We must stay the course on this budget and we will finally turn the corner in 2012 and begin to breathe a tiny bit easier.

Once we've rebuilt our fiscal foundation in 2012, we will begin building a better city for all of us to enjoy. for all of us to be proud of. and to entice the world leading up to the 2015 Pan-Am Games.

I'd like to thank City Manager Joe Penachetti, CFO Cam Weldon and Josie LaVita and all City staff for the months of hard work that has gone into this budget.

I'd like to thank Budget Chief Mike Del Grande and all of his Budget Committee for the work they've done so far - and will now do over the next few weeks.

And, finally, I'd like to thank all members of Council for their persistence and commitment to Respecting the Taxpayer this year - and through the rest of this budget process.

Ladies and Gentlemen, our 2012 budget is a SMART budget. It's a RESPONSIBLE budget. It's a budget that slams the door on out of control spending. It's a budget that begins to rebuild our Fiscal Foundation.

Our taxpayers - our residents - expect it. They deserve a government that sets priorities and lives within its means so we can work together to build a better future for us all.

Thank you.