Mayor John Tory’s administration is trumpeting a $13.53-billion operating budget for Toronto that would make new investments, but has a $77-million hole without a cash injection from Ottawa.

Councillor and budget chief Gary Crawford predicted Friday that the spending blueprint created by city staff for Canada’s biggest city will confound critics who say Tory has run the city down with austerity budgets, as well as those who say he is a lavish spender.

“I believe this budget charts a responsible path forward for the city in 2020,” Crawford told reporters at city hall after a staff presentation. “It strikes an important balance that protects services, invests in key services,” he said, and hires more police officers, TTC operators and paramedics.

But the budget’s revenues don’t cover planned expenses, as required by Ontario law, unless Prime Minister Justin Trudeau’s government gives Toronto $77 million to cover the costs of refugees who have streamed to the city in recent years.

Crawford brushed aside concerns, saying he is “fairly confident” Trudeau will come through and, if he doesn’t, the city can tap a $93-million rainy-day fund for unexpected emergencies.

This is the second effort by staff to put together what they say is a balanced budget without funding promises in place from the federal government. Last year, council approved a “balanced” budget with a $45-million request to the federal government and $34 million in additional unidentified cuts.

Friday’s budget launch is the start to a long process that will see the proposed spending plan debated and amended over the next month at various committees and council. The final approval at council is set to take place Feb. 19.

While Tory’s administration stressed it will keep the property tax hike to roughly the rate of inflation, that two-per-cent boost recommended by staff will come on top of a major tax hike approved last month to help Toronto cope with major transit and public housing costs.

Tory championed an increase to property taxes — eight per cent over the next six years — to benefit the city building fund, which was created in 2017. It will get the proceeds from an additional one per cent property tax hike in both 2020 and 2021, followed by annual 1.5-per-cent hikes through 2025. The revenue will leverage $6.6 billion in borrowed funds to invest in transit and housing projects now.

With the 1.5 per cent property tax increase for the city building fund in 2020 and other adjustments, the total 2020 residential property tax increase would be 4.24 per cent this year if this initial budget were to be approved.

That works out to $128 more for the owner of an average home assessed at $703,232, with a total property tax bill of $3,141.

Some councillors, however, say that increase is not enough.

Coun. Ana Bailao (Ward 9 Davenport), a member of Tory’s executive as well as his hand-picked housing advocate, says she will push council to commit to introduction of a vacant home tax and an increased municipal land transfer tax on luxury homes in 2020 to help the city raise badly needed revenues for housing programs in the midst of an ongoing crisis.

“This situation is very serious and needs urgent action and I think that we need to look at everything and anything that can assist with the situation,” Bailao told the Star this week. Tory said Thursday he is in favour of a vacant home tax “in principle” subject to a pending staff study and believes it could be implemented relatively quickly. He has previously been dismissive of the municipal land transfer tax proposal.

“For years council didn’t invest enough in our city,” Councillor Mike Layton, a frequent Tory critic, told reporters. “Fortunately now, finally, the mayor has heard the message.”

Layton said now the city must hear from residents if they are getting the level of service they need, citing services to help homeless Torontonians. “I don’t think the status quo in Toronto is something people are particularly proud of,” he said. “We’ve got to look at a lot of areas where people are suffering.”

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Councillor Gord Perks blasted the budget, saying insufficient investment in the maintenance of roads and transit will make Toronto less livable as its population continues to soar.

A new report, from advocacy group Social Planning Toronto, argues that a decade of austerity budgets at city hall has cost Toronto greatly when it comes to transit, housing and child care.

David Rider is the Star’s City Hall bureau chief and a reporter covering city hall and municipal politics. Follow him on Twitter: @dmrider

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