Toronto launches 2026 budget with focus on affordability and stability

The City of Toronto has officially launched its 2026 Budget, outlining a financial plan aimed at easing affordability pressures, maintaining core services and strengthening the city’s long-term financial sustainability at a time of ongoing economic uncertainty.

City staff presented a proposed $18.9-billion operating budget alongside a $63.1-billion capital budget and 10-year plan covering the period from 2026 to 2035. The capital plan is the largest in Toronto’s history and is designed to tackle aging infrastructure while expanding investments in housing, transit and water systems.

The budget was shaped by public input from more than 11,000 residents who participated in consultations last October. City officials said that feedback reinforced the need to balance cost-of-living concerns with the protection of services residents rely on daily.

Among the key highlights are expanded affordability measures, including the extension of the student nutrition program to all public schools, a freeze on TTC fares for a third consecutive year, and the opening of all Toronto Public Library branches seven days a week. The budget also provides additional support for renters and homeowners, including grants to help mitigate basement flooding and upgrade aging furnaces.

Community safety remains a priority, with new investments planned to support emergency response services and neighbourhood safety initiatives. Significant funding is also directed toward repairing and maintaining roads, bridges, housing stock, transit infrastructure and water systems across the city.

The 2026 Budget builds on progress made over the past two years to stabilize Toronto’s finances. The City points to $1.23 billion in operating support secured through the Ontario–Toronto New Deal, as well as a recent credit rating upgrade to AA+, which lowers borrowing costs. The budget includes $788 million in efficiencies, reductions and offsets to manage ongoing pressures.

Despite these measures, officials acknowledge persistent challenges, including softer-than-expected revenues in some areas, rising costs for emergency services and transit, inflationary pressures and the limits of municipal revenue tools.

To support the operating budget, residential property taxes are proposed to increase by 0.7 per cent. When combined with the previously approved 1.5 per cent City Building Fund levy, the total impact amounts to about a 2.2 per cent increase, or approximately $91.53 per year for the average Toronto home. Property tax relief programs will continue for eligible low-income seniors and people with disabilities, while small businesses and new multi-residential developments will also receive ongoing tax reductions.

Interim increases to Toronto Water and Solid Waste rates, approved by City Council in December, took effect on January 1 and are maintained in the staff-prepared budget to ensure service continuity.

Mayor Olivia Chow said the budget responds directly to household pressures. “Families are feeling the squeeze from the high cost of living,” she said, noting measures such as free healthy meals for students, frozen transit fares and expanded library access.

Budget Committee Chair Shelley Carroll described the plan as a careful balance between fiscal responsibility and service protection.

Public participation in the budget process will continue through telephone town halls, committee deputations and written submissions ahead of the Mayor’s formal budget presentation to City Council on February 1, with final deliberations scheduled for a special council meeting on February 10.