Ottawa to pledge billions to aid cash-strapped cities

Thestar.com
June 1, 2020

Prime Minister Justin Trudeau on Monday will pledge several billion dollars in assistance to help cash-strapped cities whose bottom lines have been battered by the pandemic, the Star has learned.

Trudeau is expected to roll out details at his daily briefing of Ottawa’s plan to bring some financial relief to towns and cities that have seen costs soar and revenues plummet because of the pandemic.

The federal money will be earmarked for infrastructure projects, according to a senior official who spoke on background because the funding had not yet been publicly announced.

That could be a potential problem for municipal politicians who have been seeking help with daily operating costs, though the official stressed the funding would help the immediate needs.

It will be to help with a lot of projects and work that they currently don’t have the resources to be doing and offers a fair bit of flexibility,” the official said.

“With the infrastructure dollars coming in, it will offer flexibility for them to use their own revenues for those operating costs,” the official said.

The health and economic fallout of the pandemic has seen municipal revenues such as parking and transit fares drop sharply, while expenses such as boosting local health services and supporting vulnerable populations have risen, leaving municipalities in a financial hole.

Municipalities back in April had asked the provinces and federal government for $10 billion --$7.6 billion to cover operating losses suffered by towns and cities and a further $2.4 billion for losses related to transit operations. Toronto alone is looking at a shortfall of up to $1.5 billion this year.

Monday’s announcement is not expected to fully meet that demand. However, the official stressed that the funding promise is not the end of Ottawa’s assistance. “I do want to qualify that this is just the first step,” the official said.

Trudeau and the premiers discussed the issue during their weekly teleconference call on Thursday. The prime minister followed that up with a letter sent to the premiers confirming the first round of funding for municipalities.

Municipal officials had been optimistic that Ottawa would act, after Trudeau acknowledged in an earlier call with the premiers that municipalities were facing “significant challenges” in trying to maintain services while struggling with “massive” drops in revenue.

In other announcements this week, Trudeau is expected to unveil further spending to support the lifting of social restrictions and reopening of the economy.