With a growing number of capital construction projects, infrastructure to maintain and new city investment, Toronto is going to continue to run a deficit in to 2009.
While the debt load for the 2009 capital budget is $99 million under projections, the latest capital budget estimates indicate the city will continue to rack-up significant debt, totaling $2.7 billion by the end of 2009.
The budget committee assembled on Oct. 30 to introduce the city’s capital budget for the next year.
With a total budget of $1.626 billion the city is investing a significant portion, $929 million, in maintaining city services and other infrastructure. In order to fund this the city is adding an additional $367 million to the city’s debt, something city councillor Rob Ford was not happy with.
“It’s disappointing how the city is going to be run,” Ford said. “That’s what they keep doing. The past few years they’ve been borrowing and borrowing and borrowing and in real life you can’t do that.”
Mayor David Miller however, seemed encouraged by the budget and the projections for the next five years. Those projecting show a declining debt load with only the TTC running in the red.
“By 2013 there will be no new debt for city services,” Miller said. “We’ve reduced the reliance on debt which is significant.”
Budget committee chairperson Shelley Carroll also supported the move towards reducing the city’s dependency on deficit financing. She pointed out that the city is constantly attempting to reduce its total debt.
“It’s important to notice that there’s a real balance here,” Carroll said. “We’re in a program where we’re retiring more debt. We’re already on the course we should be on.”
Miller said the current economic slowdown is a time when governments should be investing in infrastructure in the attempt to stimulate the economy.
This budget does just that, according to Miller, it is both prudent but addresses long overdue infrastructure needs for the city.