In a letter to Prime Minister Doug Ford and Deputy Prime Minister Chrystia Freeland on Thursday, the Tories stressed that unless both government orders provide financial relief, they risk choking the economy of Canada’s largest city. Tory wrote that he is reiterating his request that Ottawa and Queen’s Park “address the ongoing impact that COVID-19 is having on our city’s finances, “so that we do not have to make major cuts to the services that our residents require, impose massive tax increases they can’t afford or implement cuts to our capital budget that will eliminate thousands of jobs and threaten our economic recovery.” City staff, and Tory himself, have warned for months that Toronto is facing a large budget shortfall it must fill by law. But with limited revenue streams to draw on to balance its books during the pandemic, Toronto has been forced to make annual requests to other levels of government to help it get into the black. Tory said the huge shortfall has been caused by low ridership, the need to boost protection for people in shelters and various lost revenues. “It’s totally the hangover of COVID,” he said. Tory also pointed out that while both governments have given positive indications they will come to the table to save the city, neither has produced a signed cheque. And with less than 50 days left in the city’s fiscal year, the time to act is now, he said. “My message today is very simple. It’s time to end the discussions. And it’s time to sit down.”
The city is “fragile,” Tory says
Tory also warned of the consequences of inaction, which could lead to property tax increases, service cuts or the cancellation of capital projects. “We can’t tax our way out of this, what happened with COVID,” he said. “And we can’t get away from it. Both will damage the city at a time when it doesn’t need to be damaged. It’s fragile.” Federal Housing Minister Ahmed Hussain, who was with the Tories at an event Thursday, stressed that while he could not speak for Freeland, he has made the case for Toronto to his government. Federal Housing Minister Ahmed Hussen appears here at a press conference last month. Hussen, the Toronto MP for York-South Weston, says he has communicated the city’s needs to his government. (Sean Kilpatrick/The Canadian Press) “As the minister responsible for housing, I’ve always wanted to make sure that Toronto leverages federal investment in housing, federal investment to address homelessness, and we have a great partnership,” he said. A spokesman for Premier Doug Ford said the province has provided $4 billion in support to municipalities across Ontario to help recover from the pandemic. The province has asked the Trudeau government to match an additional $1.3 billion for municipalities, Christine Wood said in a statement. “Ontario is ready and willing to do more to support municipal partners, but we can’t do it alone,” he said. “We must have the federal government as a partner to ensure that Ontario’s municipalities can continue to provide vital services.”
Cities need more revenue tools, expert says
Enid Slack, director of the University of Toronto’s Institute for Municipal Finance and Governance, said cities have few options to raise revenue. It could be time to consider giving councils more tools to balance their budgets, he added “This is a difficult task for them with these limited sources of revenue, and it may be time to consider giving the city access to income or sales tax revenue, which will bring in more significant amounts of revenue,” he said. Slack said the current funding arrangement between cities and senior government has been in place for decades, and a review of who provides what services would also be helpful. “There is a structural problem in the sense that their costs, and other demands on municipalities, to provide services are increasing,” he said. “But the revenue sources remain the same.” Toronto’s budget process begins next month and wraps up in early 2023.
