Mayor John Tory wants city departments and agencies to “absorb” more than $100 million in unavoidable cost hikes next year while city council engages Toronto in “ambitious” city building.

City staff released a letter from Tory on Monday, outlining his position on the 2017 budget in response to a grim outlook from the city manager on the widening, worrying gap between city expenses and revenues.

Tory wants the budget committee to lay groundwork to freeze the property-tax-supported $3.97-billion operating budget, with the costs of inflation, negotiated wage settlements and any new or enhanced city services “absorbed within existing budgets.”

If council raises property taxes by inflation or less, as Tory demands, that translates into big spending cuts by city departments and agencies, boards and commissions.

Inflation alone, at Toronto’s current rate of about 2 per cent, is poised to add $79.4 million to city spending.

Bureaucrats would have to cut a further $19 million to cover increases in the police contract negotiated last year. For the TTC, no 2017 figure was available, but the four-year cost of that contract is pegged at $196 million.

Wage and benefit hikes for the rest of the city’s roughly 50,000 workers total $56 million, with further costs for Tory-endorsed transit expansion and service improvements, including ambitious poverty-eradication measures.

“While our budget is under real strain, we must continue to build the city we want,” Tory states.

“It’s time to exert discipline and ramp up our efforts to build a modern city and an efficient, ambitious and effective government.”

The mayor does not offer a blueprint for doing more with dramatically less, but he takes aim at “outdated systems and services, unnecessary duplication and a slow embrace of technology.”

He wants the city to look at contracting out more public services, a greater focus on digital solutions and more cost-saving efforts such as the police transformational task force.

Tory is only one vote on council. While he can shape the nature of the budget debate and urge allies to follow his lead, ultimately the 45-member council can go in a completely different direction.

Last week, city manager Peter Wallace recommended that, since council doesn’t have time to impose new fees or taxes for 2017, a property tax freeze means spending cuts or freezes are in order.

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Councillor Gord Perks, a Tory critic, told the Star last week: “This is city staff telling the mayor and members of his hand-picked budget committee that you cannot have your cake and eat it too.

“If (Tory and his allies) stick to their pledge on property taxes, we are going to have to make historic cuts to programs. This would amount to the largest cut to the TTC that I have seen since 1996.”

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