Mayor Olivia Chow will recommend that property taxes increase by 9.5 per cent, cutting a full percentage point off the city staff proposal from earlier this month.
Chow's office confirmed to CBC Toronto the mayor will formally announced the change at a news conference Thursday morning.
Chow will recommend council raise residential property taxes by eight per cent, instead of the nine per cent in the city staff proposal. Combined with the 1.5 per cent city building levy, taxes would jump by 9.5 per cent.
The mayor's office did not comment on her rationale for the reduction, but Chow said earlier this week that she was conscious of affordability issues across the city.
"You will see me presenting a budget come Thursday morning that would address the needs of Torontonians in the most balanced, fair way," she said. "Keeping in mind that we need to get the city back on track and making life affordable, caring and safe for Torontonians."
Chow will access the city's Tax Stabilization Fund to cover the $42 million needed to reduce the tax rate. The reserve was established by the city to help address financially difficult times.
Chow said Tuesday that she still considered the 10.5 per cent hike "semi-modest," but her goal is to achieve a balance between investing in city services and addressing Toronto's $1.8-billion deficit.
"The budget that I present will not be perfect, (but) hopefully it's close to perfect," she said.
Some city councillors had already signaled that they couldn't support a double-digit tax increase. Coun. Brad Bradford said a tax hike at 10.5 per cent is unaffordable for many in the city.
A 9.5-per cent tax increase would still be the highest since amalgamation.
"A historic tax increase is not modest," he said. "It's not semi-modest. It's historic. And that's the only way to define it."
Police budget battle could continue
Chow will also need to grapple with the question of what size budget increase to provide to the Toronto police.
The service has asked city council for a $20 million increase on their nearly $1.2 billion net budget. City staff have recommended they receive $7.4 million. Chief Myron Demkiw calls that a "cut" that will put city residents at risk.
Chow pushed back Tuesday, saying the service would also have access to tens of millions in city reserves. That money is earmarked for staffing special events and for expected pay raises when the force signs a new contract agreement with its officers this year.
"That's a substantial amount of an increase," she said.
Federal dollars for shelters still in question
The fight between the city and federal government over $250 million in funding for refugee claimants in Toronto's shelter system continues.
The budget committee has recommended Chow ask city staff to report on options to reduce services or find alternative funding for what it says are federal responsibilities.
Those options include charging taxpayers a six per cent "Federal Impacts Levy," raising the total residential tax increase to 16.5 per cent.
An additional $362 million will be available made across the country to address the situation, Marc Miller, the federal immigration minister, said Wednesday. Quebec will receive $100 million of that funding, but Miller did not say what Toronto would receive.
Will windrow clearing be saved?
Questions also linger about a popular snow clearing service that city staff put on the chopping block in their draft budget earlier this month. The cut would affect more than 262,000 homes in the city's suburbs, and councillors who represent those wards want it saved.
The budget committee recommended the mayor find savings or additional revenues to save windrow clearing.
Chow has not ruled out finding millions to save the service.
City council will hold one final budget meeting on Feb. 14.