Council has backed a push from Mayor John Tory for all city departments and agencies to find 2.6 per cent worth of reductions in next year’s budget as the city faces a shortage of new revenue.

In a 32-10 vote, council also passed a resolution saying the 2017 budget should be based on a property tax increase at or below at inflation — a key promise from Tory’s mayoral campaign.

But critics on council warned those budget directions will lead to service cuts that will hurt transit users, Toronto Community Housing tenants and other vulnerable citizens.

“This is one of most important elements of their job, is to find ways with scarce public resources to do more, or to do the same for less, and that is all we’re asking here,” Tory said of city management on Tuesday. “What we’re doing is asking people to do what every family does every year, what every small business does every year, what every big business does, what every non-profit organization does and what every government should do.”

The mayor and most of his hand-picked executive voted against a series of motions from left-leaning councillors meant to limit the future impact of budget reductions on TTC riders, TCH residents and those waiting for childcare spaces.

The mayor voted against a motion from Councillor Gord Perks that looked to prevent budget reductions from having a negative effect on the quality of life for TCH tenants. The motion lost 17-25.

Affordable housing committee chair and TCH board member Councillor Ana Bailao, who sits on Tory's executive, also voted against the motion.

“Let’s go through budget process. When staff actually put their budgets in front of us, then we can make all the decisions we need to!” Bailao tweeted after the vote, echoing Tory’s earlier arguments to not constrain the search for budget reductions before it gets underway.

Tory voted against a motion from Councillor Mike Layton that asked that any cuts not contradict the council-approved poverty reduction strategy, an initiative backed by Tory. The motion failed 16-26.

Perks said demanding that departments continue to absorb inflationary budget increases is not serving communities, nor making government more efficient.

“If you want to build this system, build the city, you will not support arbitrary directions to cut,” Perks said on the council floor. “What you will do is protect the services that make neighbourhoods and the city’s economy work.”

City manager Peter Wallace has outlined the tight financial challenge facing the city next year and beyond, as insufficient revenues leave council with a $516 million operating shortfall next year. He has said council can no longer afford to “kick the can” down the road when it comes to short-term budget-balancing measures.

Staff recommended options to balance the city’s budget next year. Tory’s executive committee recommended the request for across-the-board reductions.

The city will consider new fees and taxes in the fall, a conversation Tory argues should come after the city tries to find further efficiencies.

The debate set up a looming showdown on Wednesday over plans for a transit network that will add some $11 billion in unfunded projects to the growing $29 billion in capital projects council has approved but not found ways to finance.

That includes plans for transit in Scarborough and a debate over spending at least $3.2 billion on a single subway stop extension.

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“I’ve heard a lot of members talk about how important it is to run this government effectively and efficiently,” said Councillor Josh Matlow, who has vocally opposed that plan. “I do find it rich that so many people talk about this, these values, while we are poised to spend over $3 billion on one subway stop.”

That debate picks up Wednesday morning, where council is expected to be asked to return to a light-rail plan that would build more transit with fewer costs to the city.

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