Bailao spoke briefly with reporters on Wednesday morning at Toronto City Hall, a day after she was arrested and charged by police.
"I intend to plead not guilty," said Bailao, with colleagues from city council standing nearby.
"I assure you that I am taking these charges very seriously and I will continue to co-operate with the legal process."
Asked how the allegation of impaired driving will affect her political future, the first-term councillor said she was unsure.
"What this will do, I think time will tell," she said.
"I'm being as honest as I can possibly be."
Toronto police say Bailao was arrested in the early hours of Tuesday morning in the Bathurst Street and Harbord Street area. She was charged with impaired driving and driving with more than 80 milligrams of alcohol in 100 millilitres of blood.
Bailao attended the Mayor’s Ball for the Arts on Monday evening, hours before she was arrested.
She is due to appear in court on Dec. 3.