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No big cash injection for Toronto in Ontario budget

City officials have been pleading for months for help with its COVID-battered accounts.

Thestar.com
March 24, 2023
Ben Spurr

It wasn’t the budget Toronto was hoping for.

Despite months of pleading from city leaders, the $204.7-billion provincial spending plan released by Finance Minister Peter Bethlenfalvy on Thursday didn’t include the major funding injection the municipality says it needs to shore up its COVID-battered accounts.

Toronto’s 2023 budget was only balanced on the assumption that the higher orders of government would cover a shortfall of about $1 billion, which the city attributes mostly to the lingering effects of the pandemic.

In the run-up to the Ontario budget, Toronto Deputy Mayor Jennifer McKelvie, urged Premier Doug Ford’s government to cover $510 million in the city’s projected pandemic-related costs this year.

That included $423 million for what Toronto says is the province’s share of shortfalls caused by factors like decreased transit revenue, plus $87 million for Toronto Public Health.

The province’s spending plan included $48 million for services for supportive housing residents, part of a $202-million annual province-wide boost for such programs. That met Toronto’s funding request for supportive housing funding, but fell far short of the municipality’s overall request.

In a statement, McKelvie, who is filling in as mayor following John Tory’s abrupt resignation last month, said the budget “includes some good news” for the city. She said supportive housing is “key to addressing the dual homelessness and overdose crises,” while the province’s reiteration of its pledge to eventually eliminate double fares between GO Transit and the TTC would make transit more accessible.

“Our discussion and advocacy with the province and the Government of Canada for further financial support to address outstanding 2023 COVID-19 costs continues,” McKelvie said.

Bethlenfalvy said the province is committed to working with Toronto to address its financial challenges and is waiting to see what assistance the federal Liberal government provides to the city in its budget, which is to be released Tuesday.

“We’ve agreed that we’ll continue to have a dialogue and that’s exactly what we’re going to do,” Bethlenfalvy told reporters.

But the province says it has already provided $3.47 billion in COVID-related assistance to the city since the start of the pandemic. Thursday’s budget also highlighted what Bethlenfalvy called the province’s “historic” investment in infrastructure that will benefit Toronto, including construction of the Ontario Line and other transit projects.

Ontario argues the federal government also has a responsibility to help the city, including by matching the province’s pledge of $235 million to address the shortfall Toronto has still not accounted for in its 2022 operating budget. On top of that money, McKelvie has asked Ottawa to provide $423 million for the city’s 2023 pandemic-driven deficit, and to help take on $97 million in refugee response costs.

Without assistance from the other governments, Toronto’s backup plan is to balance its budget by dipping into reserves and deferring capital work. But municipal officials say that approach is unsustainable. Toronto’s reserves are close to depleted, and McKelvie has warned that not spending on infrastructure will undermine the city’s ability to support new home construction and meet the province’s housing targets.

Separate from its requests for the provincial budget, the city is waiting on details of Ontario’s plans to reimburse Toronto for the impacts of recent housing legislation. The city estimates the province’s Bill 23, which reduces or eliminates development charges paid to municipalities, will cost it at least $120 million a year.