Nov 10, 2026
Just days after Olivia Chow secured a second term as Toronto mayor on a promise to keep property tax increases close to inflation, Ontario Premier Doug Ford ruled out another funding deal with the city. The decision leaves Toronto facing a significant budget shortfall in 2027, with limited options to close the gap.
For Toronto residents, the political standoff could have real financial consequences. Higher property taxes, increased transit fares or cuts to city services could all be on the table. The question now is how much more residents may have to pay — and what they can do to prepare.
What did Premier Ford actually say about a ‘New Deal 2.0’?
When reporters asked on Nov. 4 whether a second deal was coming, Ford was blunt: “There’s no 2.0, to answer your question directly.” He pointed to Ontario’s $16.9 billion deficit. He also said the federal and provincial governments have together given Toronto $9 billion, and the city must be responsible for its own budget. Ford did leave room to work with the city on “certain priorities” such as crime reduction and subway safety.
Thanks for subscribing!
The best of Money.ca delivered weekly.
By signing up, you accept Money.ca Terms of Use, Subscription Agreement, and Privacy Policy.
The original deal, a three-year, $1.2 billion agreement struck in November 2023, saw the province take over the Gardiner Expressway and Don Valley Parkway. That operating support came to an end in 2026.
Must Read
- A single line on your car insurance policy could be inflating your premium by up to 30% — here's what to change
- Here are 5 'must-haves' that Canadians constantly overpay for. How many of these are sabotaging your budget every single month?
- Here are the 5 biggest differences between rich and poor Canadians — which side do you fall on?
Join 20,000+ readers and get Money.ca’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
How big is Toronto’s budget gap and could it grow?
The City of Toronto projects a shortfall of roughly $1.1 billion in 2027. City documents suggest that figure could climb by nearly $500 million, TorontoToday reports. Because cities can’t run deficits, Toronto’s city council must close that gap.
Advertisement
Transit is a pressure point. The Toronto Transit Commission (TTC) estimated the end of provincial funding would leave it about $379 million short in 2027.
In response to these pressures, Chow implemented a municipal government hiring freeze; however, the freeze won’t impact “frontline services,” explained Chow, including “fire, ambulance, paramedics, community crisis workers.”
Chow is also committed to conducting another “line-by-line” review of the city’s budget to “find the savings.”
Could an ‘inflation-level’ increase still sting?
Chow has promised to keep municipal tax increases “at or around” the rate of inflation. That is far gentler than the 9.5% increase in 2024 and 6.9% in 2025. Still, inflation isn’t low right now. Statistics Canada reported annual inflation of 3.1% in September.
The City’s own numbers give a useful benchmark. This year’s 2.2% increase added $91.53 a year to the property tax bill on an average assessed home of $692,140.
Using these numbers, municipal residents can expect roughly $42 on their tax bill (for the average home) for each percentage point increase. That means an increase that matches September’s inflation rate would add about $129 to an annual property tax bill. A 10% hike would add about $416, which is the kind of double-digit increase Green Party leader Mike Schreiner warned municipalities could face without a new fiscal deal.
However, property tax isn’t the only lever. User fees, transit fares and service levels can all shift, so renters aren’t fully insulated either.
What Toronto residents should do now
- Property tax payers should budget early. Setting aside about $11 a month would cover a $129 increase on an average home. Scale that up if your assessment is higher.
- Check City of Toronto relief. Toronto’s property tax and utility relief program serves eligible low-income seniors and people with disabilities.
- Claim provincial credits. The Ontario Energy and Property Tax Credit (OEPTC) pays up to $1,307, or $1,488 for seniors. Homeowners 64 and older may also qualify for the Ontario Senior Homeowners’ Property Tax Grant of up to $500. Both are claimed on Form ON-BEN with your tax return.
- Speak up. Public budget consultations are your chance to flag which services matter most to you.
Chow insists talks with Queen’s Park aren’t over, calling the first deal in 2023, “always interim” and never final. As she said after her latest electoral win, “the conversation (and) negotiation will continue.”
You May Also Like
- This 7-step plan from Dave Ramsey is designed to help you ditch debt, save more and build wealth — here’s how it works
- Prioritize these 4 critical investments and watch your net worth skyrocket
- Here are 8 solid money moves that could free up real cash every month — here's where to start
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
The most expensive financial mistakes are often the ones you don't see coming. Join 19,000+ Canadians who get the money moves, risks and opportunities shaping their finances — delivered free each week. Subscribe now.
Romana King, Senior Editor at Money.ca, also writes for various North American publications and the RKHomeowner blog. Her book, House Poor No More, is an Amazon bestseller and five-time award winner, including the 2022 New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award.
