Toronto’s proposed 2026 operating budget is $18.9 billion, with a combined 2.2 per cent residential property tax increase, a third straight TTC fare freeze and monthly fare capping. Mayor Olivia Chow presented the plan on Jan. 8, 2026, as an affordability budget that also funds police, paramedics, student meals and libraries.
A much smaller tax increase than the last two years
The 2.2 per cent increase is well below the 6.9 per cent rise in 2025 and the 9.5 per cent rise in 2024. The city said it was also low compared with other municipalities in the Greater Toronto Area.
For an average Toronto home, assessed at $692,140, the increase works out to about $91.53 more over the year. The city’s final budget release described the 2.2 per cent as a combined residential property tax increase and City Building Fund levy increase. The levy is the dedicated charge, appearing on the same tax bill, that helps pay for major capital work.
City officials framed the smaller increase as a sign that finances had stabilized after larger rises were used to close a major operating shortfall. The final budget documents later reported $788 million in efficiencies, reductions and offsets to address financial pressures, alongside a $63.1 billion 10-year capital plan covering 2026 to 2035, which the city described as the largest in its history.
Mayor Olivia Chow said the plan was built around the cost of living. “After paying rent or your mortgage, groceries and all your bills, there’s not much left at the end of the month,” Chow said in a release on Jan. 8. “Families are feeling the squeeze from the high cost of living. That’s why I’m focused on making life more affordable for Toronto families.”
Fares frozen, and capped for frequent riders
The Toronto Transit Commission fare freeze would run for a third straight year. On top of the freeze, the plan introduced monthly fare capping, set at 47 paid rides in a calendar month in 2026 and falling to 40 rides in 2027. Riders who pass the cap would ride free for the rest of that month.
When the budget became final in February, the city confirmed capping would begin in September and estimated it would provide 2.1 million free rides. Once a rider reaches the cap, extra trips that month are free.
Police, paramedics, meals and libraries
Beyond taxes and transit, the operating plan directed money to emergency services and social supports. It included funding to hire hundreds of new police officers and paramedics under a multi-year hiring plan, more free meals for students, and expanded library service.
The library commitment would open branches seven days a week. In its final budget release, the city said all 100 Toronto Public Library branches would open seven days a week, year-round, starting in the summer, with more weekday hours as well.
Those items explain how the mayor linked the budget to daily life rather than only to the tax rate. A smaller increase still leaves homeowners paying more, but the city argued the added services — transit, emergency response, school food and library access — were the services residents use most directly.
What happened next
The proposal released on Jan. 8 was the start of the process, not the end. It went to budget committee consideration and public feedback until Jan. 24, before Chow was to present a final budget at the end of the month.
Toronto City Council later considered the mayor’s budget on Feb. 10. The city said council’s version kept the combined 2.2 per cent residential increase and the $18.9 billion operating budget, made up of $16.61 billion tax-supported and $2.25 billion rate-supported spending. Chow issued a mayoral decision saying she would not use her veto and shortened the veto period, so the 2026 budget was deemed adopted that day.
The city also said input came from more than 25,000 residents through consultations held the previous October, telephone town halls, speakers at budget committee and written submissions in January. That consultation record, and the February adoption with the headline figures unchanged, mean the plan Torontonians debated in January is, in its main lines, the budget now in place for 2026.
