Feds, province refuse to help city pay for Union Station overruns

Senior governments are loath to chip in a requested $60 million of $80 million in cost overruns on the historic station’s revitalization.


Thestar.com
March 2, 2015
By David Rider

The provincial and federal governments are refusing to pay the city’s requested $60 million to help cope with $80 million in cost overruns for the Union Station revitalization.

The news is in a city staff report released at city hall on Monday as Mayor John Tory’s executive committee met to review the proposed 2015 budget.

City staff asked the province to pay half of the $40-million cost increase for the northwest PATH connection, and $15 million from the province and $25 million from Ottawa toward $80 million in general cost overruns.

“All requests have been denied,” states the report signed by senior staff, including city manager Joe Pennachetti.

Mayor John Tory was mum about the details but said it won’t affect this year’s budget. He insisted that “negotiations continue” on Union Station costs and also on the city kicking in capital funds to help the province pay for its rail corridor electrification project.

Work on the Georgetown South and Union Pearson Express lines has benefits for the city in terms of reconstruction of roads and bridges and grade separations, the city report states.
The size of that contribution remains under wraps. The report notes that this year the city will stop paying a $20-million annual contribution to capital costs for the provincial GO service.

The executive committee, meanwhile, passed the proposed operating budget, which includes $9.973 billion in operational spending. The budget goes to city council for final approval next week.

“This is a budget you can be proud of because it does respect people and their money and it also respects the need to invest in the city,” Tory told committee members.

The spending plan would hike residential property taxes by 2.75 per cent, provide $170 million in new spending on transit, social services and more, and hit residents with steep user fee hikes for services, including garbage pickup and hockey rink rentals.

The budget continues to face sharp opposition from members of council who believe the levy doesn’t address Toronto’s core needs.

“The property tax increase is too low,” Councillor Gord Perks said Monday. Councillor Mike Layton, another downtown representative, said borrowing money instead of hiking taxes will cost more down the road.

Tory said he rejects “dire predictions” of “imminent financial disaster,” saying he has heard that tune before.

The budget would plug an $86-million hole caused by a phase-out of provincial social housing grants by essentially borrowing from itself, in a short-term gambit to spread the pain over several years. Tory called it a “smoothing solution.”

City staff have forecast a $350-million shortfall, or “opening pressure,” for the 2016 operating budget, which the city must eventually, by law, balance.

Asked if he is pushing pain on to next year, Councillor Gary Crawford, the budget chief, said: “I’m confident that when we begin next year’s process we’ll be finding those efficiencies.”

Upon the urging of planning and growth chair Councillor David Shiner, the executive committee voted to restore eight planning and heritage positions that were rejected by the budget committee on Feb. 20 in a controversial last-minute 4-2 vote.

Councillor Michelle Berardinetti, who made the original motion at budget committee, had told the Star on Sunday she would stick to her guns Monday. Instead, she supported Shiner’s motion. She got the committee to also order a city staff report on whether planning studies have achieved the desired results.

The executive committee, however, voted to flatline the ombudsman and integrity commissioner’s budgets, which will prevent the hiring of eight additional staff members.