“Being budget chief is an honour—but there’s also a sense of dread”: A Q&A with Councillor Shelley Carroll

Everyone knows Toronto is broke, and a new report from Ernst and Young and StrategyCorp lays out the damage in detail. The city’s $1.5-billion budget hole will balloon to a staggering $46.5 billion unless council takes action. The options are dire: slash services, housing, transit and long-term care beds or convince Doug Ford to let the city raise new taxes, fees and tolls. This burden now falls on Councillor Shelley Carroll, Olivia Chow’s newly appointed budget chief. And that may be a good thing. Carroll had the same role under former mayor David Miller, when the city was in similar turmoil—and she delivered four balanced budgets in a row. We caught up with the new fiscal czar to talk work-life balance, life as a grandmother, taxes, sneaker shopping and the daunting task ahead.

You served as budget chief from 2006 to 2010. How does it feel to be back in the saddle?
It’s an honour, of course, but there’s also a sense of dread, because I know exactly how hard it is. Last time around, a lot of us on the budget committee were literally unwell by the end of each process, from overwork and lack of rest. I ended up in the hospital with a kidney infection, and two of the other councillors got sick. We all looked at one another one day in a briefing and said, “We should really take care of ourselves.”

How do you plan to take care of yourself this time around?
You have to balance life and work. My three grandchildren are now teenagers, and one of them is starting college in September. When I leave the office, I’ll be with them, doing drop-offs and pickups. I was just at Fan Expo!

Did you celebrate when Mayor Chow gave you the news? Or did the sheer dread put a damper on things?
Actually, my celebration came when I was appointed chair of Economic Development and Culture by former mayor John Tory after he was re-elected in 2022. Getting a public leadership role was amazing. But it was an honour for Mayor Chow to say, “I don’t want anyone else to be my budget chair, and I’m not taking no for an answer.” I thought, “This is huge. I have to embrace it.”

Why have the past three mayors chosen you for such important fiscal positions?
Back in the day, following amalgamation, we had run out of all our funds. The previous budget chief, David Soknacki, had just retired, so I got the job. And I helped deliver balanced budgets. Now, here I am again, still talking about what we’ve always needed: diversifying the funding formula that sustains Toronto.

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Are there any decisions you made back in the Miller days that have come back to haunt you?
Not really, but today, I need to be more clear on what exactly our money gets spent on. Simcoe Street used to end at Front Street. The reason it extends to the waterfront now is because the former vehicle registration tax paid for it. Same with the grade separation on Morningside in Scarborough. Going forward, I want to say to people, “Yes, we do need this tool to sustain the city—and here’s exactly what it will do.”

You’re going to have to do a lot of that since you’re now floating new taxes. What is taxpayers’ hard-earned cash paying for these days?
Take the Eglinton Crosstown. The province has built it, but they want us to operate it. We’re not sure if we can. There was never a firm idea of how we’d pay for that service. And now they’re going as fast as they can to build the Finch West LRT, and it’s the same scenario. Toronto has a mature transit system that’s expanding constantly, but we’re the only major city in the world that doesn’t employ funding beyond property taxes and the fare box.

What’s wrong with funding these things through the property tax?
It’s unreasonable to sustain a city of this size on a tax that isn’t calculated on your ability to spend. Property taxes are meant to pay for things just outside your picket fence. When it’s paying for arterial roads, highways, buses, rail lines—that’s when cities hit a wall. People ask, “What are you doing running an entire subway system on my property taxes? I can’t afford to pay for that.” And it’s true, they can’t!

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You’ve floated the idea of a one per cent municipal sales tax. How is that any better?
My grandson once came to me and said, “Grandma, will you buy my street shoes for school? They’re $100 at Foot Locker.” So I took him to the mall and bought them, since I could afford it. The feds and the province will split $13 off that sale. What we’re proposing to people is, throw in a buck for the city. Now, say you can’t afford those shoes. Maybe you go to Payless and get a good pair of knock-offs for $20. I’m only going to get 20 cents from you, and that’s all I want. What if you can’t afford shoes at all? Well, the person who buys really nice $400 shoes is going to give the city enough money to help cover you.

How are you managing the rising cost of living in your own life?
It’s a real struggle. Nowadays, if you’re like my daughter—a young single mom with three kids—you can’t do that alone. The whole multi-generational family pulls together and passes the hat. So I’m helping to pay for my grandkids’ sports while also taking care of my dad in a long-term care home. We’re trying to give these kids what we had growing up, because they deserve it. But it’s hard. I’m not going to be middle class for very much longer, and I say that as a person who earns a substantial amount of money. I’m on the Sunshine List—Why am I feeling the pinch? But we all are.

The Ernst and Young report listed 27 possible new financial tools the city could use, but 22 of them would need Doug Ford’s approval. How do you get it?
I think Mayor Chow is using a really good approach here. She’s saying, “Okay, we’ve got this report now. Get it through the executive committee fast, get it through council fast. So, by the time we go to Queen’s Park, there will be full support from city hall.” I’ve seen it happen a different way. Mayor Tory had a conversation with former premier Kathleen Wynne, and she said, “I will consider new revenue tools, but your council has to be asking for it. Vote on the ones you want.” We as a council debated, but we didn’t put forward strong enough endorsements for any of the tools. I’m happy we can do things a bit more sensibly this time.

Let’s say council reaches a consensus on new taxes. What happens when you take that mandate to Queen’s Park?
We have to show the province that this is about affordability. My colleague Councillor Gord Perks has said, “Taxes are what make the city affordable.” They build the services that sustain life. They make sure the transit system works, so you can apply for a job in any part of town. They keep libraries open until midnight, because some people need to get out of crowded apartments to find a job. Property taxes alone won’t get us there; diversified revenue streams will.

Once upon a time, you shared the city hall chamber with councillor Doug Ford. What did your time together teach you about how to approach him?
The first term in council is always a huge learning experience, and he only got one term—plus, he was overwhelmed dealing with the personal circumstances of his brother Rob. Doug will be the first to tell you that he’s not a world-class expert on municipalities. While he exudes confidence publicly, when you sit down with him, he’s always able to be a bit more real. He’s just that kind of guy. He’ll say, “I don’t know everything, so tell me what’s going on.” And I look forward to that conversation.

What will that conversation look like?
I will be clear that new revenue tools are things both council and the community need. We haven’t even launched a campaign to promote the new taxes, but an independent poll shows that people already approve of these things. They’re saying, “Enough is enough—just solve this fiscal problem.” And Doug has got to be looking at that. If I know him, he’ll groan; he’s probably already dreading it. But he knows enough about Toronto to know he should have that conversation.

What about the feds? We had that terrible situation with refugees being forced to sleep outside after they were turned away from city shelters. Ottawa provided a one-time funding boost before cutting off support. Can you bring the Liberals around?
Former councillor Howard Moscoe, who mentored me when I first got to city hall, once said, “The further a government gets from what happens on the ground, the harder it is for people to understand.” Ottawa thought we were playing some sort of game when we said that our shelters were full earlier this year. But, no, they really were full. It was bad timing, because the call to close shelters to refugees happened in the middle of the by-election for mayor, and then it became the first thing Mayor Chow had to tackle. What we really need is for the federal government to sit down and understand where the refugee influx problem is—to see it for themselves.

In a letter to Mayor Chow refusing more funding, Finance Minister Chrystia Freeland pointed out that Toronto has a huge amount of money in its capital reserve fund. Why can’t we just use that cash to solve our problems?
I don’t disagree with her. We could. That money is there because we underspent each year of the pandemic, since we didn’t know when various bills would need to get paid. But what you have to understand is that all of that money is committed. It’s for something. We know when every vehicle in the TTC needs to be replaced, for example, and we’re already experts at extending their shelf life. If we spent that money now, we’d be okay for this year. But, if we plug the hole in our operating budget with one-time money today, next year we’ll still have the structural gap plus the hole. It just doubles.

Say we get everything we ask for: new taxes, better funding from the province and the feds—the works. Will that ensure our “world-class” city status, as Ernst and Young seems to suggest?
Maybe over time, since we’ve left all this for so long. But we can start to work on things right away. It all comes down to sound fiscal policy, because we have a huge backlog of state-of-good-repair and transit needs even beyond what we’ve committed to so far. If we skip repairs, that leads to whole buildings needing to be replaced. A world-class city is one that fixes the little stuff so things don’t fall apart. We need to get to the point where we can say to other levels of government, “You guys figure out your piece, and we’ll be the partner who does things that make us all look good.”

And say we don’t get any of what we want from the other governments. As citizens, we’d usually protest in the streets. What are our options?
We don’t need to protest; we just need to act responsibly. If we can’t pay the bills, there are many things we won’t be able to do. I’m not posturing when I tell the province that we won’t be able to run their programs. It’s not an idle threat—it’s just common sense. We pay for many things that are provincial and federal responsibilities, and now we don’t have that money anymore. We can solve problems for them, but they need to give us the wherewithal to do it. We’re not even asking for a cheque. We’re asking for powers and tools. Just give us those, and we’ll get on with it.

This interview has been edited for length and clarity.