Why Toronto’s repair backlog is rising again in 2026 despite the Gardiner deal
Toronto’s 10-year capital plan hits a record high in 2026, yet the city’s repair backlog grows as transit, roads and public housing needs outpace funding.
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By Torontoer Staff
Toronto’s repair backlog is projected to grow again in 2026, despite a 2023 agreement that transferred Gardiner Expressway and Don Valley Parkway maintenance costs to the province. The city’s 10-year capital budget reaches a historic high this year, but deferred projects, rising construction costs and new assessments of public housing needs mean long-term repair liabilities are increasing.
City officials say the budget spike addresses immediate repairs, but that will not be enough to stop overall backlog growth without new, sustained revenue or changes to project delivery. The capital plan totals about $63 billion, up from $59 billion last year.
What the 2023 deal did and did not fix
The 2023 agreement with Queen’s Park was intended to relieve Toronto of the most maintenance-intensive pieces of infrastructure, the Gardiner and the Don Valley Parkway, and to reduce the city’s multibillion-dollar repair backlog. That helped lower estimates in some divisions, but the overall backlog is expected to rise to $24.7 billion by 2035, up from last year’s projections.
Officials point to several factors that offset those gains: renewed assessments of public housing needs, steeper-than-expected inflation in construction and materials, and postponed growth-related projects that carry future costs.
Main contributors to the increasing backlog
- Public transit: The TTC’s state-of-good-repair needs increase to more than $6 billion by 2035, up from $4.3 billion last year.
- Major and local roads: Together they account for nearly $6 billion in additional needs, with local roads expected to deteriorate markedly over the next decade.
- Public housing: New assessments of Toronto Community Housing Corporation sites add repairs and previously uncounted soft costs, pushing TCHC’s backlog to about $4.8 billion by 2035.
- Postponed growth projects: Delays to community centres, library upgrades and recreation projects reduce near-term spending but raise long-term costs.
Transit and roads
The Toronto Transit Commission is the largest single contributor to the projected increase in the backlog. The TTC’s needs rose by roughly $1.7 billion in the latest plan, driven by ageing assets and deferred investments. Major roads and local streets are the second-largest contributors, with the transportation department warning that the proportion of local roads in fair or good condition will drop significantly over the next decade.
What keeps me up at night is our capital program. We were really stunting the growth of that repair backlog. But it still was growing.
Stephen Conforti, city chief financial officer
Public housing and rising costs
New inspections and updated cost estimates at 483 Toronto Community Housing sites uncovered additional repair needs, such as windows and HVAC replacements, and added soft costs like design and project management. Those additions, combined with higher construction and material prices, pushed TCHC’s backlog estimate to $4.8 billion by 2035, compared with $2.5 billion in last year’s outlook.
Projects postponed and revenue changes
The city is deferring millions in growth-related projects, including community centre expansions and library modernizations, to prioritise state-of-good-repair work. Provincial changes to development charges now let builders delay payments until projects are complete, reducing anticipated revenue by about $1.9 billion over the next decade. That gap forces trade-offs between maintaining existing assets and building capacity for population growth.
The parks and recreation division postponed more than $214 million in projects by three to five years, including community centres in Southwest Scarborough and Central Etobicoke, and waterfront work at Rees Park. Library service improvements were deferred at the Toronto Reference Library to focus on critical repairs.
Over the next 10 years, potholes, sinkholes, water main breaks, all of that stuff is going to become more frequent and more severe because the federal and provincial governments have handcuffed the city.
Coun. Gord Perks, vice-chair of the budget committee
Choices ahead and potential outcomes
City staff say more deferrals are likely next year, and depending on future revenue collection, some capital projects may need to be cancelled. Rising costs reduce purchasing power, meaning the same budget will cover fewer repairs or projects than before.
That creates a policy choice for Toronto: identify new revenue sources, reallocate priorities within the capital plan, or accept a growing backlog and increasing failure risk for infrastructure and services. Officials are already prioritising immediate risk in repairs, but that approach leaves many growth-related needs unmet.
City leaders and councillors will face difficult decisions in upcoming budgets as they balance maintaining existing assets with investments for a growing population. The 2026 capital plan raises the scale of the challenge, even as it increases near-term spending.
For now, Toronto continues to spend more on capital investment than in previous years, but officials warn that without new funding arrangements or policy changes, the repair backlog will keep growing and the city will face harder trade-offs in the years ahead.
Toronto budgetinfrastructurecapital planTTCToronto Community Housing
