City hall’s spiralling costs land on Toronto taxpayers

In Toronto’s municipal election campaign ahead of the October vote, the high and increasing cost of city hall should be a major issue. Since becoming mayor in 2023, Olivia Chow has raised property taxes by 19.6 per cent and made both the vacancy tax and municipal land transfer tax more punitive. And while Torontonians get hit with higher taxes, spending has spiked.

For example, according to the auditor general’s recent report, after a relatively modest 3.5 per cent annual increase in staff overtime costs in 2024, there was an astonishing 18.5 per cent jump in overtime costs in 2025, amounting to $21.0 million in higher costs last year compared to 2024. Similarly, while staff sick leave costs increased by 3.6 per cent in 2024, they jumped 16.7 per cent in 2025, adding $18.9 million in costs last year.

The auditor general also found that in 2025, staff “standby costs” (employees are off-duty but must remain available to work if required) increased 18.0 per cent or $1.6 million, and staff “callback costs” (employees called back to the workplace outside of scheduled shifts) increased 64.2 per cent or $0.6 million. While these dollar amounts are smaller than for overtime pay and sick leave, they follow the same pattern of staff spending growth.

One possible justification for the sharp jump in staff overtime costs might be that circumstances demanded it, such as a significant increase in fires causing more overtime costs for the fire department. But that cannot explain, for instance, why the “Parks and Recreation” division hiked its overtime costs from $6.6 million in 2024 to $9.7 million in 2025—or nearly 50 per cent. Notably, the Parks and Recreation division also increased its fulltime staff complement by approximately 10 per cent last year, so it can hardly be said to be short-staffed.

Finally, the auditor general found that the “Attendance Management Program,” which is the city’s policy regarding employee attendance and absenteeism, is based on historical averages established back in 2001, has not been updated since then, and is managed at the divisional level so “there is no centralized tracking or oversight of the program’s outcome and effectiveness” and “according to the December 2025 Attendance Management report, City-wide average absenteeism was 9.48 days per employee, approximately 18.5 per cent above the City’s eight-day standard.”

Clearly, city hall could do a much better job managing taxpayer money. And not just regarding city staff.

Municipal construction in the industrial, commercial and institutional sector is subject to closed bidding, which means in Toronto, only certain unionized shops can bid on those construction projects. According to a 2023 study by Cardus, based on evidence from other Ontario municipalities that have opened construction bidding to wider competition, Toronto’s anti-competition policy cost taxpayers an estimated $347 million that year.

Toronto’s municipal climate change subsidies—including energy retrofit loans, Indigenous and youth grants, and energy efficiency rebates—add yet more unnecessary costs. Studies show that these kinds of subsidy programs deliver nowhere near the environmental benefits required to justify the costs.

Unfortunately, instead of trying to manage taxpayer money better, city hall is running in the opposite direction. Earlier this year, city council passed a motion to open four government-run grocery stores. This idea defies common sense—grocery profit margins are in the low single-digits, which means even if city hall operates stores as efficiently as the most efficient private business, shoppers would only save about three per cent on groceries. And even these meagre “savings” would be fake. Toronto taxpayers would have to put up millions of dollars to establish these stores to earn zero return on their capital while taking massive risk.

As the municipal election approaches in October, Torontonians should demand better from their municipal politicians. Taxes are too high because spending is too high.