In late 2015, staff in the finance office at Toronto City Hall — usually not much for illustration — started using a visual aid in their budget presentations to politicians: a picture of a giant iceberg.

The iceberg, Mayor John Tory and city councillors were told by then-City Manager Peter Wallace, was meant to illustrate the scale of the city's unfunded capital projects.

And here's a more detailed breakdown of the city's $22 BILLION in unfunded capital projects. Iceberg for scale. <a href="https://t.co/keCN5keSoN">pic.twitter.com/keCN5keSoN</a> —@GraphicMatt

Just as icebergs are in fact much, much larger than they appear to be when looked at from above the water line, explained Wallace, the city's need to invest in fixing, replacing or building new infrastructure is in fact much, much larger than has been reflected in the budgets approved by politicians.

How much bigger? When the iceberg visual first surfaced in 2015, the unfunded total was about $22 billion over 10 years. Today, the number is even higher.

What's this iceberg made of?

When you add up unfunded costs related to building more transit, housing, and other important projects, while also meeting provincial accessibility requirements, the city's unmet capital needs over the next decade is now about $30 billion, according to the city's long-term financial plan, which was released earlier this year.

The unfunded stuff includes what the city calls "state-of-good-repair," which is the money needed to prevent stuff like bridges and water mains from collapsing or bursting. It also covers necessary repairs to ensure residents of Toronto Community Housing units don't get kicked out of homes they've lived in for decades. (This has already started happening.)

But despite repeated warnings, it's notable that this issue hasn't come up more this year.

The lead-up to the Oct. 22 election has seen lots of talk about transit plans and Premier Doug Ford, but not a lot about the city's financial situation.

How do you have an election and ignore an iceberg?

City faces clear financial risk

It wasn't their stated intention, but the city finance department's use of iceberg-as-metaphor can't help but conjure up iceberg-related peril: like the Titanic slamming into a big one, and then, you know, that sad scene where Leonardo DiCaprio drowns. Disaster.

This too could turn out to be a pretty good metaphor for Toronto's finances.

According to that long-term financial plan, Toronto faces risks that "threaten the city's ability to maintain existing services, and impede consideration of any new services."

Mayor John Tory, seeking re-election this October, has vowed to keep property tax increases at, or below, the rate of inflation. (John Rieti/CBC)

These risks include those billions in unmet capital needs, of course, but also the heavy reliance on the municipal land transfer tax — charged every time property changes hands. The revenue the city takes in from that tax has increased by over 350 per cent since 2011, and as it's grown, so too has city council's reliance on the tax as a means to pay for basic services.

For all four budgets passed during Mayor John Tory's first term, the land transfer tax — funded by a hot city real estate market — has been the key factor that allows him to deliver on his promise to keep annual residential property tax increases low.

But there are some early signs that the next term of council won't see the land transfer tax cash bonanza enjoyed over the last four years. In May, a budget report to council noted that "year-to-date Municipal Land Transfer Tax revenue is lower compared to the same period in 2017."

If the amount of increased revenue brought in by the land transfer tax changes, the mayor and council's approach to the budget will need to change too. Because city council is not allowed to run an annual deficit, either services will need to be cut to match revenues, or new revenue will need to be found.

Again, probably something worth talking about during a mayoral election.

Toronto property taxes among the lowest in the GTA

There is a simple way the city could significantly improve its financial situation: raising property taxes.

By most measures, Toronto property taxes are low compared to neighbouring municipalities. The average tax bill paid by Toronto residents is the second lowest in the GTA. Even when you factor in the cost of the land transfer tax and user fees related to garbage collection, Toronto's average property tax bill is below the GTA average.

Raising the average homeowner's tax bill to the same level of the GTA average — roughly matching what homeowners pay in the City of Markham — would certainly help melt the budget iceberg and insulate the city from a decline or levelling-out of land transfer tax revenue.

So far, mayoral candidate Jennifer Keesmaat has supported one new tax measure, but has said little about changing property taxes. (John Rieti/CBC)

But, of course, politics renders this easier said than done.

Tory, for his part, has ruled out any notion of increasing property taxes, suggesting that property tax increases beyond the rate of inflation would only make the city less affordable.

A direct relationship between low property tax rates and increased affordability is difficult to prove, however. Toronto's low property taxes have certainly not helped the city stay affordable compared to other municipalities with higher tax rates.

And a lack of revenue — which could be raised through higher property taxes — is the biggest obstacle to the city building more affordable housing, which has been identified as the most effective way to make the city, wait for it, more affordable.

Keesmaat policy acknowledges need for revenue

Jennifer Keesmaat's campaign made a move toward acknowledging this last week, with a new policy designed to fund the construction of rent-to-own affordable housing through a property tax surcharge on homes worth more than $4 million. It's a policy that addresses both the expense and revenue side of a city need.

A step forward, but projected to raise just $80 million annually the new tax amounts to small change compared to $30 billion in unmet budget needs.

For now, with just two weeks to go before election day, the iceberg still looms.