Infra
‘Falling apart’: Toronto facing $26B infrastructure shortfall to maintain service over next decade
![‘Falling apart’: Toronto facing B infrastructure shortfall to maintain service over next decade ‘Falling apart’: Toronto facing B infrastructure shortfall to maintain service over next decade](https://www.cp24.com/content/dam/cp24/en/images/2024/5/14/olivia-chow-1-6886635-1715709535391.jpeg)
A report adopted by Toronto City Council’s Executive Committee today says the city is staring down a $26 billion shortfall when it comes to maintaining its infrastructure in a state of good repair (SOGR) over the next decade.
“That’s what keeps me up at night,” Mayor Olivia Chow told reporters ahead of the Executive Committee meeting Thursday.
Regulations passed by the province several years ago require Ontario municipalities to have council-approved strategic asset management plans which are updated at least every five years. The plans must also anticipate service levels.
According to the report, the cumulative 10-year cost to maintain current service levels is estimated to be $40 billion. But that’s $26 billion more in infrastructure spending than the city currently has budgeted in its state of good repair plan for the next decade.
That means “planned capital investments are insufficient to maintain current levels of service over the next 10-years,” the report says.
Chow noted that the $26 billion figure includes a $2.3 billion shortfall for transit, “a huge amount of money,” as well as smaller shortfalls of $27 million for Parks, Forestry & Recreation and $3 million for libraries.
“Through the New Deal, we are adding in a lot more money for state of good repair funding. It’s $1.6 billion through the 2024 budget process, but it’s nowhere near enough. We’re just treading water,” Chow said. “We need a comprehensive plan from the both the federal and the provincial governments and I will continue to have conversation with other levels of government so that our assets can be maintained in a proper way.”
She noted that many assets identified in the report are “falling apart, literally in front of our eyes, and require replacement.”
Aside from core assets, the total replacement value of the city’s assets is estimated at $72.9 billion, with nearly half of that being made up of transit and community housing assets.
Nearly 40 per cent of the city’s asset portfolio is graded as poor or very poor.
“These are the assets that are past their useful lives and require rehabilitation or replacement,” the reports says. “They may still be able to provide service but at increased operating expenses or at a suboptimal level of service. There is also an increased likelihood of disruptions or closures to the service they provide.”
City staff note that the report simply indicates what funding for infrastructure will be required to keep up with the current level of service.
But the current level of service “may not be the ‘necessary’ or ‘proposed’ level of service needed to support continued growth, mitigate ongoing risks, and minimize future costs,” the report states.
The gaps between the two are expected to be identified in a report next summer, which will also include financial strategies required to fund those asset investments.
This is the Toronto’s first Corporate Asset Management Plan and city staff say the process will help them gather better information to plan for the future across all departments.
“For the City of Toronto specifically, more than 50% of its 2024-2033 Tax and Rate Supported Capital Budget and Plan is dedicated to capital investments in SOGR projects to simply maintain the current state of infrastructure over the next 10 years,” city staff said in the report.
“In this context, it is extremely important to have high quality and comparable data across the organization for senior leadership to plan and prioritize renewal projects based on the evidence, implement best practices for cost savings, and leverage funding opportunities from provincial and federal governments.”
Chow noted that the city has implemented measures to bring in more revenue, such as a property tax increase, higher land transfer tax for homes over $3 million, a vacant home tax and is considering more revenue options.
“But even doing all of that it’s nowhere near enough to deal with that huge backlog,” she said. “That’s what keeps me up at night.”