'Whatever steps are needed:' Mississauga could face nearly $60M deficit if coronavirus closures remain

Province looking at ways to support municipalities

Yorkregion.com
April 9, 2020
Steve Cornwell

If COVID-19 physical distancing measures continue until the end of June, the City of Mississauga will face a nearly $60 million deficit, according to a staff report.

The sizeable deficit, which could be as high $100 million by the end of the year if distancing rules remain, would be due in large part to declines in the city’s revenues in MiWay transit and recreation programs.

Under provincial law, a municipality can run a deficit but must balance it the following year by using reserves or increasing taxes and other revenues.

The city also can’t borrow money to fund a deficit, so unless other levels of government intervene, Mississauga would have to find a way to balance its books.

Mississauga Mayor Bonnie Crombie is hoping the federal and provincial governments take action to help cities in what she called "unprecedented times."

At an April 8 press conference, she also said the city would look at several options, including deferring or cancelling projects, deploying new levies and drawing from reserves if help is not there from other levels of government.

"We'll have to look through our budgets line item by line item to see what can be done and we will take whatever steps are needed to get to where we need to go," she said.

In March, Mississauga shut down facilities including arenas, libraries and fitness centres to help slow the spread of COVID-19 and offered full refunds for residents on cancelled programs.

The move was re-enforced by closures ordered by the Ontario government, which declared a COVID-19 state of emergency.

Mississauga's MiWay service was also reduced to reflect demand and made fare-free to help limit exposure to transit operators.

Losses on transit and recreation fees alone could reach as high $49 million by June 30 if they continue, the report said.

Mississauga’s Commissioner of Corporate Services, Gary Kent, said at a Wednesday, April 8, council meeting that the numbers in the report could shift as the COVID-19 situation evolves.

Kent said the city does have a number of reserves that could be utilized to provide short-term deficit relief, but draining them could put pressures on Mississauga's operating budget should extreme weather or other bad circumstances arrive.

“It is the provincial and federal governments only that have the fiscal firepower to implement dramatic solutions for this dramatic health and economic crisis,” he said.

In an April 8 email, Julie O’Driscoll from the office of Ontario municipal affairs minister Steve Clark did not rule out providing some deficit-related relief to cities.

“We understand that municipal revenues are impacted by the current situation,” the email said.

“We are monitoring the situation and will be working with (Association of Municipalities Ontario) over the coming weeks and months to better understand the fiscal impacts on municipalities --and identify possible steps we can take to support our municipal partners.”

To help address the ballooning deficit, the city report recommends asking the federal and provincial governments for a grant to maintain operations during the COVID-19 crisis.

The report also recommends speeding up anticipated infrastructure funding.