Toronto’s mayor is renewing a call for more federal funding to help offset the financial losses experienced by the city due to the COVID-19 pandemic.
“Toronto and other cities across Canada are working flat out to help people get through this. We are the people relied upon to deliver most of the services at the ground level to help people during the pandemic,” Mayor John Tory told reporters on Thursday. “Without emergency funding we are out of acceptable options and time.”
Two weeks ago, the Federation of Canadian Municipalities asked the federal government to provide $10 billion in emergency funding to cities to help fill the gap of their revenue shortfalls.
The organization called for at least $7.6 billion in direct allocations to municipalities based on population and $2.4 billion to those with major transit systems such as Toronto.
"With new expenses, staggering drops in revenue and no freedom to run deficits, municipalities need emergency funding to keep essential services going strong,” FCM President Bill Karsten said at the time.
In the city’s daily COVID-19 briefing Thursday, Tory called for “strong, national leadership” in providing the emergency funding to municipalities.
“The pandemic isn’t the only crisis. All cities, including the city of Toronto, are facing a financial crisis. We are doing everything we can to protect our most vulnerable now and in the post-pandemic months ahead, but we also do know that cities can’t run deficits by law, cities can’t raise taxes right now and cities should not cut services right now at a time we need it the most.”
“We need this support right now to keep front-line services going strong and to help cities drive Canada’s economic recovery.”
Toronto is losing about $65 million a week in revenue because of the pandemic. Officials project the city could be out at least $1.5 billion by the end of 2020 if there is a three-month lockdown and six-month recovery period, something Tory called a “best-case scenario.”
Tory said that the province and the federal governments will end up making some of their lost revenue back in sales and income taxes once the economy reopens, but municipalities don’t have that luxury.
“All of that revenue, all of it, every penny of corporate income and sales tax revenue, goes to the federal and provincial governments,” Tory said. “I’m not complaining about that, that’s a subject for another day, what I am saying is that we need a share of that money.”
Tory added that he isn’t asking the province to match any money offered by the federal government, but any assistance would be welcome.
The Large Urban Mayors’ Caucus of Ontario (LUMCO), which is comprised of the province’s 29 largest cities, also supports the call for emergency funding for municipalities. In a statement issued on April 28, they said that running deficits to manage financial loses is “not in the public interest.”
“The solution is to deal with these financial problems today and not push fiscal challenges to future years. That’s why we need better tools in the toolbox, such as emergency operating funding, to keep critical services running,” LUMCO Chair Cam Guthrie said.
Since the pandemic began, the federal government has offered subsidies and benefits to small businesses, employees who have lost their jobs as a result of COVID-19 and students. They have not yet provided any direct funding to municipalities.
