The COVID-19 pandemic is carving a path of destruction through government finances across the country as federal, provincial and territorial budgets lie in ruins.
Governments of all stripes have turned on the spending taps to keep economies afloat, as arguments over debt and deficits now seem comical and barely relevant by comparison.
But get set for a second wave of fiscal destruction to slam yet another level of government as Canadian municipalities get pounded by the pandemic.
READ MORE: Vancouver mayor says 25% of property owners may be unable to pay property taxes due to COVID-19
From coast to coast, cities and towns are warning of disappearing revenues and rising costs.
“We’re experiencing a financial pressure estimated at $65 million each and every week this crisis goes on,” said Toronto Mayor John Tory, adding the city is dipping into last year’s budget surplus to make up the shortfall.
That particular well of money is not a deep one and could dry up within weeks, though Tory said the city won’t ask Toronto taxpayers to dig deeper.
“We won’t be asking you to pay more,” he said. “We know that you’re in no position.”
Montreal’s decision to defer local property taxes is set to wallop the city’s bottom line, the chair of the city’s executive committee said Wednesday.
“It’s of a magnitude that’s never been seen before,” said Benoit Dorais, adding local tax deferrals could punch a $2-billion hole in the city’s budget by June.
In Edmonton, Mayor Don Iveson said the city is bracing for a $260-million budget hit while looking to senior levels of government for help.
“It gets harder and harder, especially later and later in the year, to make that back,” he said, pointing out municipalities are not eligible for the 75 per cent federal wage subsidy.
Calgary Mayor Naheed Nenshi said the pandemic is costing his city up to $15 million, exacerbated by provincial laws against municipalities running deficits.
“These are big numbers for the city because we do have to balance our budget,” he said.
READ MORE: Vancouver mayor asks B.C. for $200 million to offset COVID-19 economic hit
Which brings us to Vancouver, and the loudest alarm bells of all, being sounded by Mayor Kennedy Stewart.
The former NDP MP is pleading with the provincial and federal governments for an immediate bailout as the pandemic decimates the city’s finances.
“The worst-case scenario would be about a half-a-billion-dollar operating revenue loss, which would be financially devastating,” Stewart told me, adding the city might even be forced to lay off police officers and firefighters.
“All options are going to be on the table,” he said. “It’s all reality.”
But now critics are pouncing, blaming the city for jacking up spending over the last five years, leaving it vulnerable to a sudden emergency.
It was just a couple of weeks ago that Vancouver city council approved more than $6 million in arts grants — including money for the local tap-dance and orchid societies — while downtown businesses were being boarded up and shut down.
But Stewart said people are just nitpicking while the city bleeds massive financial losses.
“I just got off a call with mayors from around the world, and they’re all facing the same problem,” he said, adding senior levels of government have to step up and help.
“It may make the federal and provincial governments uncomfortable,” he said. “I’m ringing the bell and saying, ‘Look, your municipalities are in trouble.'”
READ MORE: Toronto-area transit ridership and revenue in steep decline during pandemic
As cities gasp for financial air, other local authorities are also starting to wheeze, especially municipal transit systems.
The Toronto Transit Commission is losing about $18 million a week. And Metro Vancouver’s TransLink authority said the region is facing massive service cuts to stem losses of $75 million a month.
Transit services across the country have seen huge drop-offs in ridership as citizens stay home.
But a deflated Stewart said he heard unofficially that his plea for a $200-million bailout from the British Columbia government had already been rejected.
“There’s no help from the federal and provincial governments, and it doesn’t look like anything’s coming,” he said.
I’m not convinced of that. As municipal losses pile up, there will be pressure on senior levels of government to put even more money on the table in a crisis that gets more costly by the day.
Mike Smyth is host of ‘The Mike Smyth Show’ on Global News Radio 980 CKNW in Vancouver and a commentator for Global News. You can reach him at mike@cknw.com and follow him on Twitter at @MikeSmythNews.
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