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Toronto mayor John Tory will start the week with a prebudget announcement Monday, one day before deliberations officially begin with the presentation of staff’s recommended spending plan to the budget committee.

Fred Lum/The Globe and Mail

Toronto residents will get their first indication this week of Mayor John Tory's financial plans – and a chance to see if he can make good on campaign promises to freeze TTC fares and hold residential tax increases at or below the rate of inflation.

Mr. Tory will start the week with a prebudget announcement Monday, one day before deliberations officially begin with the presentation of staff's recommended spending plan to the budget committee.

The budget is the first major test of the city's new leader, and will set the tone for the administration in the months ahead. Mr. Tory says he has been working on the budget since "day one" after his election. "I knew the budget, in any government or any company or any enterprise, is the fundamental expression of how you're going to manage things and how you set your priorities," he said last week.

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Mr. Tory has promised this year's fiscal plan will be a "forward-looking, positive budget" that will do "great things for the people of Toronto within the context of a fiscally responsible commitment" he made during the election. And the new mayor has said the first budget of his term will include many of the issues he addressed during his campaign, including transit and restoring previously cut TTC services, housing and homelessness.

Keeping to those promises will be challenging, especially on the transit file. Since taking office, Mr. Tory has been vague when asked if he will honour his promise to hold fares at current levels. Late Friday, city manager Joe Pennachetti released a report that asks city council to approve up to $1.65-million in funding for studies on Mr. Tory's SmartTrack plan – to run more commuter trains, largely on existing tracks in the city – on top of $750,000 already approved.

"You know what I campaigned on," he said last week when questioned by reporters. "Next week, we'll lay out the entire budget plan and you'll see what it says."

Budget committee member Councillor James Pasternak described the fare freeze as a "point of discussion," and other city hall sources have described the fare freeze as one of several options on the table.

"What we are looking at now is a tax increase at the rate of inflation and no freezing of TTC fares," said Mr. Pasternak, who added later he has not seen final budget details.

"I think you are going to be facing a very tight budget and not a lot of goodies to hand out," he said.

Early forecasts put the gap between city spending and revenue at more than $300-million on an operating budget of roughly $9.6-billion, but Toronto's CFO, Rob Rossini, has signalled that number will likely be lower when he presents his figures this week.

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Staff's most recent budget forecast estimated the city would finish 2014 with a $100-million surplus. The final number is likely to be higher given the strength of the city's real estate market, which translates into more revenue from Toronto's land-transfer tax. Under city policy, three-quarters of any surplus goes to funding capital projects.

While Mr. Tory has promised to keep tax increases at or below inflation, this year's tax bill will see an increase to 1 per cent for the special levy imposed last year to pay for the Scarborough subway extension.

This week's budget announcements are the first in a series of events, which will include a round of public consultations in all areas of the city at the beginning of next month before final approval by council in March.

Most councillors not on the mayor's executive say they are taking a wait-and-see attitude on the budget and will be watching to see if Mr. Tory can deliver on his tax pledge without reducing services.

"I'll have to see the actual numbers before I know what any of it means," said Councillor Gord Perks. "It's one thing to set a policy goal, it's another to commit resources."

Former mayor Rob Ford, now an Etobicoke councillor, said he will be looking for a tax increase of no more than the latest national inflation figure of 1.95 per cent.

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He says he has a list of proposed cuts ready to bring to the council. "I am going to bring my motions forward, as always," he said Friday at City Hall.

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