Toronto council approves Mayor Chow’s 2025 budget that includes 6.9 per cent tax hike, votes to eliminate Tesla subsidy

Toronto City Council has approved the 2025 budget. It includes a 6.9 per cent tax hike as well as a 3.75 per cent increase to water and garbage fees.

Toronto City Council has voted to approve Mayor Olivia Chow’s 2025 city budget, which includes a 6.9 per cent tax hike to support the $18.8 billion operating budget and the $59.6 billion capital plan.

The budget includes a 5.4 per cent property tax increase, along with a 1.5 per cent increase to the city-building fund, for a total of 6.9 per cent.

The latest increase comes on the heels of a 9.5 per cent tax hike last year, the largest since amalgamation.

Chow tabled her second budget as mayor, cautioning that “the stakes are high for all of us,” citing what she described as decades of underinvestment and neglect.

“For too long, living in Toronto has become really difficult. Rent is too expensive. Subways break down too often, too many kids are hungry and police and paramedics are taking too long to arrive when Torontonians need them most,” Chow told reporters ahead of the meeting.

The budget includes money for expanded food programs, longer public pool and library hours, more parks staff, a freeze on TTC fares, more traffic wardens and union-negotiated wage increases for city staff.

During deliberations, some councillors bristled at the suggestion that tax increases above the rate of inflation are needed in order to continue building the city. Councillor James Pasternak pointed to a number of projects in his ward that were completed at a time when property tax increases were held to the rate of inflation.

However, Chow pointed out that during that time, the city was still able to negotiate Section 37 deals with developers in order to obtain funding for community infrastructure projects. The province ended that tool in 2023.

A number of other councillors questioned whether a property tax increase this high is necessary.

They suggested that the city could perhaps get more aggressive when it comes to fare evasion on the TTC.

Coun. Vincent Crisanti said some of his constituents are having trouble seeing the light at the end of the tunnel when it comes to tax increases.

“They feel the tunnel is getting longer, the light is getting a little dimmer,” he told Chow in the council chamber.

He moved a motion to reduce the property tax hike by two points by taking money from the reserve funds and implementing a 1.3% reduction in expenditures across all city departments. The motion drew some heated debate on the council floor, but was ultimately ruled out of order by speaker Francis Nunziata.

“I’ve never seen a perfect budget, but in this particular respect, with this budget, it is the budget for our time to respond to the needs that exist in our city,” Coun. Michael Thompson said.

Coun. Shelley Carroll, who serves as budget chief, pointed out that millions of dollars in efficiencies were already found through the budget process.

“It’s pretty clear what people are telling us. They want us to fix what is broken. They want us to deliver on whatever is in the budget. We don’t need to dream up new ideas. What we need to do is repair the city, reduce traffic, make it a safer place, work on that affordability,” Carroll said after the budget passed.

“They don’t need a brand new pony. They just need a city that works for them and keeps their kids safe and keeps their grandchildren able to call Toronto a place they’ll build their careers.”

Carroll added she plans to help inform residents on where their taxes are spent.

“I’m going to make it my business as budget chair for the rest of this year to walk people through how to find that information and share it with the community, so that as they make the investments that we’re asking of them right now, because we must, they can actually point to what will happen with those investments, and we can all together track whether or not we deliver on those,” she said.

Chow motion to exclude Tesla from grant program approved

Coun. Brad Bradford moved a motion calling on council to dig into reserves in order to cut industrial taxes by 25 per cent. It was defeated by a vote of 3 to 22.

That motion drew heated debate, with Coun. Paula Fletcher warning that such a cut could benefit U.S. warehouse retailers like Amazon.

Chow said she wouldn’t support Bradford’s motion, but she indicated that she was moving a motion to ban Tesla from the list of vehicles which qualify for a $4.85 million licensing fee grant program aimed at encouraging vehicle-for-hire drivers to buy electric vehicles.

Chow initially did not answer directly when asked if she was taking the move because the company is headed by Elon Musk, who is a close associate of U.S. President Donald Trump.

Trump has been threatening Canada with tariffs since taking office and signed an executive order Monday imposing steel and aluminum tariffs on Canada.

She said she is taking the move, which would come into effect on March 1, because Tesla is a “very popular brand” and said that there is “no reason” the city should be providing subsidies for it.

“People can still continue to buy electric vehicles, just not Tesla. I see no reason why the city should subsidize the purchase of Tesla,” Chow said.

However, the mayor later told council when she introduced the motion: “One of the best ways that we have is to send a message to the president’s right-hand person, (Tesla CEO) Elon Musk.”

Chow said the move will not affect taxi drivers who already own Teslas and operate them under the program.

She said the city has other ideas for how it might respond to U.S. tariffs that it could unveil down the road as part of its Toronto Action Plan.

The motion passed with a vote of 20 to 4.

Here’s a recap of Tuesday’s special council meeting:

8:40 p.m.

Council passes Mayor Olivia Chow’s budget that includes a 6.9 tax hike.

8:06 p.m.

The mayor’s motion to temporarily drop new Tesla vehicles from eligibility for vehicle-for-hire licensing grants from the city passes with a vote of 20-4. It comes to effect on March 1.

7 p.m.

Council has resumed debating the budget. Several councillors introduce motions, including Coun. Matlow, who is asking the chief financial officer and treasurer to ensure reserve funds are stable in the event of U.S. tariffs so the city can make strategic investments that support those who are affected.

6:30 p.m.

City council has taken a break. Budget deliberations are paused until the meeting resumes.

5:55 p.m.

Mayor Chow introduces a motion to temporarily restrict any new Tesla vehicles from participating in Zero Emission Grant Program for vehicles for hire, which she hopes will send a message to the White House.

“One of the best ways that we have is to send a message to the president’s right-hand person, Elon Musk,” Chow tells council.

5:30 p.m.

Coun. Bradford’s motion to dig into reserves in order to cut industrial taxes by 25 per cent was defeated by a vote of 3-22.

4:30 p.m.

Coun. Brad Bradford introduces his motion to use reserve funds to reduce industry and small business taxes by 25 per cent in the face of tariff threats.

The debate on the motion draws a heated exchange with Coun. Paula Fletcher.

3:45 p.m.

Council has resumed its meeting. Speaker Frances Nunziata says if there is another disruption, the chamber will be cleared and the public will have to watch the rest of the meeting online.

3:02 p.m.

Council has been interrupted by a few masked protesters who pushed their way onto the council floor. They yelled that they are unhappy about “policing of the unhoused and poor people in the city.”

One of them also appeared to unfurl a Palestinian flag.

The meeting has been paused as the protesters are removed from the chamber.

3 p.m.

Speaker Nunziatta moves Crisanti’s motion out of order because it called for reductions with no impact to service levels.

2:50 p.m.

Coun. Vincent Crisanti has moved a motion to cut two points off the property tax increase by finding $92.9 million – $37.9 million from reserves and $55 million by reducing expenditures by 1.3 per cent across all departments.

His motion draws some intense debate with other councillors on the floor.

2:40 p.m.

Mayor Chow’s office says they are confident her motion will go ahead on dropping Tesla vehicles from eligibility for vehicle-for-hire licensing grants from the city.

2:30 p.m.

Coun. Dianne Saxe says other levels of government should be doing more in their areas of responsibility, but just because they aren’t, it doesn’t mean the city can stop. She points to what happened when asylum seekers were shut out of shelters because the federal government wasn’t chipping in enough support.

However she adds that people need to see results for their money.

“When people pay more, they have a legitimate right to get more. They have a right to see the basic services that the city provides get better,” Saxe said.

2:20 p.m.

Coun. Stephen Holyday has moved several motions aimed at reducing the property tax increase, including a reduction in the TTC’s operating budget.

2:10 p.m.

Council has resumed.

1:55 p.m.

Coun. Shelley Caroll says she’s not sure Mayor Chow’s motion on barring Tesla vehicles from grants for Taxi drivers will go ahead today.

12:35 p.m.

Council has recessed until 2 p.m.

12:30 p.m.

Coun. Vincent Crisanti says he’s hearing from constituents who are concerned about repeated tax increases.

“We’ve already heard the phrase ‘light at the end of the tunnel,’” Crisanti said. “People are asking me, ‘Councillor, is there a light at the end of the tunnel where we’re going to see better days when it comes to these tax increases?’ They feel the tunnel is getting longer, the light is getting a little dimmer.”

He points out that a provincial election is a great time to pressure the province when it comes to negotiations on a new deal for the city.

Crisanti also asks if the TTC could be more aggressive on fare evasion.

Chow says funding talks continue with other levels of government. She also says that the city does want to tackle fare evasion, but switching to single-door boarding on the TTC would make service worse and some people feel the fare evasion fines are already quite aggressive.

12:15 p.m.

Coun. Lily Cheng asks how the city will be able to continue funding community infrastructure long-term without the old tools and avoid a “dystopian” version of Toronto.

“It’s a lot of money, and no one is saying how we’re going to replace it,” Cheng said.

Chow says discussions are underway for part two of a new deal with the province and that discussions are also underway with other levels of government. She said the city is also advocating for revenue tools tied to growth.

12:05 p.m.

Coun. James Pasternak challenges the idea that you can’t build the city without raising property taxes. He lists a number of community facilities that were built when the city held property tax increases to the rate of inflation.

Chow counters that those things were built back when the city had Section 37 funding from developers, a tool it no longer has.

11:55 a.m.

Coun. Jon Burnside is also questioning the need for a 6.9 per cent tax increase and says the city should be more aggressive on cracking down on fare evasion on the TTC.

“No one is ever happy when we’re asking people to pay more, but we have to fix the city,” Chow says.

TTC Chair Jamaal Myers jumps in and says nobody did anything about fare evasion before Chow was mayor.

11:30 a.m.

Coun. Stephen Holyday is questioning why the city needs to grow the operating budget by $94 million.

He said this is not the year for “big changes” and said a 6.9 per cent tax increase feels like more instability to many people.

“If we just did what we did last year, we could reduce it by $94 million and take nearly two per cent off of the tax increase,” Holyday said. “Why would we not take that choice, just given the circumstances in the world right now, right?”

Chow said the city needs the extra money to fix TTC infrastructure and fund growth.

“Because our city is growing, we have to hire more frontline officers, whether they’re police, the paramedics, the firefighters,” Chow said.

9:30 a.m.

Mayor Olivia Chow says she’ll be moving a motion to ban Tesla from the list of vehicles which qualify for a $4.85 million licensing fee grant program aimed at encouraging taxi drivers to buy electric vehicles.

Chow did not answer directly when asked if she is taking the move because the company is headed by Elon Musk, who is a close associate of U.S. President Donald Trump.

Trump has been threatening Canada with tariffs since taking office and signed an executive order Monday imposing steel and aluminum tariffs on Canada.

She said she is taking the move, which would come into effect on March 1, because Tesla is a “very popular brand” and said that there is “no reason” the city should be providing subsidies for it.

“People can still continue to buy electric vehicles, just not Tesla. I see no reason why the city should subsidize the purchase of Tesla,” Chow said.

Chow said the move will not affect taxi drivers who already own Teslas and operate them under the program.

She said the city has other ideas for how it might respond to U.S. tariffs that it could unveil down the road as part of its Toronto Action Plan.

However she reiterated that she does not support a proposal from Coun. Brad Bradford to use reserve funds to provide a 25 per cent property tax reduction for industry and small businesses in the face of tariff threats.

“This is the worst time one would raid a reserve fund,” Chow said. “Why? Because we have a senseless trade action from the south. We are facing economic hard times.”

She said she nevertheless “looks forward to the debate” at council as to how to use around $3 million in unallocated funds.