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No sign Ontario budget will bail out Toronto, says Deputy Mayor Jennifer McKelvie

The province has already pledged $235 million to help address Toronto’s COVID-19 ‘hangover.’ The city is asking the feds to match that.

Thestar.com
March 22, 2023
Ben Spurr

Deputy Mayor Jennifer McKelvie says Premier Doug Ford’s government has given no sign its incoming provincial budget will include money to plug the gaps in Toronto’s COVID-ravaged finances, as a new report paints a dire picture of the city’s long-term fiscal health.

“No I haven’t,” said McKelvie at a press conference Tuesday when asked whether she’s received any indication from the province that the provincial budget, scheduled for Thursday, will include another big bailout for Toronto.

But McKelvie, who has been filling in as mayor since John Tory’s abrupt resignation in February, said she will continue negotiations past Thursday if necessary.

“We have been pleading our case. I’m hopeful, I’m optimistic,” she said, adding she was particularly upbeat the Ontario Conservative government will meet Toronto’s request for $48 million for services for supportive housing residents.

In pre-budget letters to the other orders of government earlier this month, the deputy mayor reiterated Toronto’s urgent request for more than $1.2 billion in relief.

The province has already pledged $235 million to help fill the pandemic-related gap in last year’s operating budget. The city is asking the feds to match that, and for both governments to provide more money in 2023 to address Toronto’s COVID-19 “hangover,” plus costs for refugee accommodation and public health.

Separately, the city is seeking compensation from Ontario for lost development charge revenue as a result of provincial housing legislation.

Ontario Housing Minister Steve Clark’s press secretary said in statement Tuesday the province has already helped provide more than $2.7 billion in COVID-19 support for Toronto, and continues to work with the city “to ensure they are addressing local needs, delivering high-quality and sustainable services, and keeping our communities safe.”

A spokesperson for Deputy Prime Minister and Federal Finance Minister Chrystia Freeland said the federal Liberal government has been a “reliable partner” to Toronto and other cities, providing more than $5 billion in emergency funding since the start of the pandemic.

The federal government will table its budget next Tuesday.

Whatever help it receives in the short term, a report on Toronto’s long-term financial outlook debated at council’s executive committee Tuesday predicted the city will need a fundamental fiscal reset to stave off decline over the next decade.

It estimated the city is facing $46.5 billion in operating and capital pressures over ten years, primarily driven by mounting costs for city infrastructure, and incremental growth in operating expenditures and debt financing.

The report warned that if council can’t soon find a way to pay those costs, they will threaten the city’s ability to deliver public services.

“Without meaningful action the future of Toronto as a great place to live, visit, and do business could be at risk,” it stated.

City Manager Paul Johnson told councillors that while the other orders of government have a duty to help, council will also have to consider new revenue streams and finding ways to provide municipal services more efficiently.

“Let’s be honest, the other orders of government are not single-handedly going to come along and say great, $46.5 billion over 10 years, here’s the cheque to do that,” he said.

A staff report on new revenue tools is expected later this year.

Coun. Stephen Holyday (Ward 2, Etobicoke Centre) said it’s time to hit the “panic button” and make tough choices about which programs the city pays for.

He suggested council prioritize services that ensure residents’ health and safety or are required by legislation, but should stop funding programs that are primarily the responsibility of other governments.

“If we’re looking to the federal and provincial governments to pay for the services that they’re supposed to be delivering, I’m not sure the winning strategy is to pay for it voluntarily ourselves,” he said.

But Coun. Lily Cheng (Ward 18, Willowdale) said the federal and provincial programs the city augments include refugee accommodation and housing, and cutting funding would harm Toronto’s most vulnerable.

“I’m not willing to put them on the line in order to make a political statement,” she said.