Let’s talk about everyone’s favourite topic: money.
Now, combine conversations about funding with arguments about the government and all of a sudden, you have a few people yelling at each other and fights breaking out.
But seriously, understanding where the City of Toronto gets its money is essential for a couple different reasons. For starters, we can’t hold officials accountable unless we know their funding sources and where it’s going. Second, we can’t be active members of the City unless we take proper interest in knowing where the money is from.
Toronto has a ton of bills to pay. There’s public transit, emergency services, libraries, parks, roads, shelters, public health, garbage collection, random FIFA festivities and approximately a zillion other things that somehow need to get paid for.
So, where does all that money actually come from? You probably think it’s property taxes, and you’re not wrong, but that’s not the full story.
First things first, we should discuss the operating and capital budgets.
- The operating budget is basically the money the City needs to run Toronto on a day-to-day basis. This includes things like employee salaries, operating libraries, maintaining parks and more.
- The capital budget is where the City plans for major investments and infrastructure like transit, roads, housings and public buildings.
These two budgets don’t get their money from the same place.
Let’s break it down (pretend I’m DJing).
Property taxes
Property taxes are annual fees charged by municipal governments to real estate owners. The fees are based on the market value of the land.
In 2026, Toronto’s operating budget includes about $5.79 billion in property tax revenue, making it the City’s largest single source of operating revenue. So when you pay property taxes, some of the money helps pay for the services Toronto provides.
But property taxes don’t cover everything and Toronto has a couple different revenue sources too.
Support from other governments
Toronto gets funding from the provincial and federal governments. Matter of fact, it’s quite common. In 2026, the City budgeted about $4.49 billion in federal and provincial revenue for its operating budget.
That money can support programs and services where funding or responsibility is shared between different levels of government. And this is important because the City doesn’t control all of the services it provides — or all of the money associated with them.
So when you hear Toronto asking Queen’s Park or Ottawa for more money, part of the conversation is about who is responsible for paying for what.
On Aug. 5, the Government of Canada’s Mark Carney announced a partnership with the City of Toronto to invest $2.7 billion to build more than 18 housing projects across the City over the next three years.
The projects will bring more than 5,600 new rental homes. This is an example of money coming from a different government.
Where else does the City get its money?
Property taxes and government funding are only part of the picture. We give the City some money when we use its services. These are user fees.
In 2026, Toronto’s operating budget includes about $910 million in user-fee revenue.
That can include things like recreation programs, permits, licenses and other City services.
There’s also rate-supported programs, which are funded through rates and fees rather than primarily through property taxes. For example, your water and wastewater rates help fund the City’s water system and related infrastructure.
Your TTC fares also help fund the City too — though your $3.30 fare doesn’t pay for the entirety of our transit system.
The City also makes some money from the Municipal Land Transfer Tax — which happens when money is collected from properties that are transferred in Toronto.
Fines and penalties are also a source of money for the municipal government.
So, now that we’ve answered where our money comes from, where does it go exactly? That’s a good question. Stay tuned — next week, we’ll break down how our funding is allocated across different projects.
And if you’re looking to understand some more civic-related jargon, you can let me know what I should break down next at aia@thegreenline.to.
Fact-Check Yourself
Sources and
further reading
Don’t take our word for it — check our sources for yourself.
Join the conversation