COVID-19 costs London, Ont. more than $1M in direct emergency costs to date: report

London City Hall as seen June 14, 2017.
London City Hall as seen June 14, 2017. Matthew Trevithick/980 CFPL File

London, Ont., city hall has shelled out more than $1 million in direct emergency costs as a result of the novel coronavirus, a staff report released Wednesday shows.

The report, to be put before councillors at next week’s meeting of the Corporate Services Committee, outlines the emergency, non-competitive purchases over $50,000 that the city has had to procure from suppliers, as of May 5, in response to impacts from the pandemic.

READ MORE: May 8: Unemployment rate reaches 7-year high in London, St. Thomas

According to the report, the city has spent more than $585,000 in housing-related purchases, more than $224,000 in masks and other personal protective equipment, and $231,000 in supports to help city staff work remotely.

“The city runs vital services and essential services for Londoners. We’re obligated and will continue to provide those services and to run those like any other business that needs to continue to run services,” said Josh Morgan, the city’s budget chair and councillor for Ward 7, in an interview Thursday with 980 CFPL’s Craig Needles.

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“We need to protect our employees and the people we come in contact with, and so there is no choice for us, or others in this space, but to invest in this sort of equipment and processes, because that’s what’s expected of everyone at this time.”

The housing-related purchases include nearly $430,000 in costs to provide temporary housing to the city’s vulnerable citizens, using rooms at the Econo Lodge and Quality Inn Suites, as well as an additional $63,600 to purchase cots from the Canadian Red Cross.

“It would be near impossible to implement social distancing in our emergency shelters,” Morgan explained.

“[That’s] why we’ve had to create isolation spaces by working with Red Cross and purchasing services from them, as well as actually purchasing hotel space to put Londoners into hotel spaces, whether that’s the homeless or vulnerable population.”
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The city says it’s spent more than $224,000 in personal protective equipment-related purchases, including masks, for fire department personnel, by-law enforcement staff, and workers at the city-owned Dearness Home long-term care facility.

“This is a question that every business and every entity in Canada and even globally has, and that is, when can things start to return to normal? And I think the unfortunate reality is, not for a long time,” Morgan said.

Even as we start to return to some operations that we’re not able to provide for, the distancing provisions that are going to be required are going to make those very different. The work environments are going to be very different.”

READ MORE: COVID-19 could deal $33M financial hit to London by end of August, city staff project

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The city is facing a $33 million budget hole by the end of August due to lost revenues and other pandemic-related costs, an amount that could change depending on how long the pandemic continues.

Municipalities aren’t allowed to run deficits under the province’s Municipal Act, meaning any unfunded deficit from 2020 would have to be carried over into next year’s budget to be funded.

On Tuesday, council voted unanimously to allocate the rest of the city’s 2019 budget surplus, about $3.2 million, toward mitigating the impacts of the pandemic.

“We will continue to make every possible action we can take to move money into mitigating that financial pressure that we have. But it will not be enough,” Morgan said.

“We will be in a deficit position at the end of the year, and we will have to make some spending choices for sure, and we will need support from other levels of government.”

READ MORE: Coronavirus: councillors endorse 9 more relief measures as London, Ont., faces $32.8M budget shortfall

City politicians have also endorsed a call from the Federation of Canadian Municipalities to have the federal government fork over at least $10 billion in emergency operating money for local governments across the country.

The mayors of several Alberta municipalities are urging their province to take action and alleviate the financial troubles hitting local governments.

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Click to play video 'Coronavirus outbreak: Trudeau concerned about challenges facing Canada’s municipalities, but will respect province’s jurisdictions' Coronavirus outbreak: Trudeau concerned about challenges facing Canada’s municipalities, but will respect province’s jurisdictions
Coronavirus outbreak: Trudeau concerned about challenges facing Canada’s municipalities, but will respect province’s jurisdictions – May 16, 2020

Prime Minister Justin Trudeau said over the weekend that he had spoken to Canada’s premiers Thursday during a First Ministers’ Meeting about the issues facing municipalities, but ultimately noted that cities are under provincial jurisdiction.

“[Municipalities] continue to deliver services in difficult situations for their citizens while at the same time seeing massive drops in revenue,” he said.
“We respect [that], of course, and we know that cities are the responsibility of the provinces, but I highlighted that the federal government is eager to hear from the provinces how we can support cities.
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“We’re continuing to look to do so but recognize the provincial jurisdiction in this,” Trudeau said.

With files from Global News’ Allison Bench, and The Canadian Press