Toronto needs more inter-governmental aid in face of projected 2021 $1.7B hole: City Manager

Click to play video: 'Toronto recovery relies heavily on inter-governmental aid to cover projected budget hole' Toronto recovery relies heavily on inter-governmental aid to cover projected budget hole
WATCH ABOVE: Toronto continues to face an uphill battle when it comes to its financial future. After coming to grips with a $1.8 billion hole with its budget, the city manager says the financial hardship next year will be just as difficult to manage. Matthew Bingley reports – Oct 14, 2020

Toronto’s city manager is painting a stark picture for the upcoming challenges the municipality will face in the months and years ahead as it works to get its economy back on track in a post COVID-19 pandemic world.

For months, the city has tasked Chris Murray along with longtime civil servant Saad Rafi and former Ontario Chief Medical Officer of Health Dr. David Mowat with overseeing a recovery plan. On Wednesday morning, the trio presented a report to the city’s Executive Committee laying out the plan.

Read more: Coronavirus: Toronto reveals plans for city’s ‘recovery’ phase of COVID-19 pandemic

Already in 2020 the city has struggled to make up for lost revenue and increased costs attributed to the pandemic. Murray said the financial burden Toronto is facing this year will likely be $1.8 billion. In 2021, lost revenue and costs he said, are projected to be between $1.5-1.7 billion.

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“We are dealing with massive equity challenges that we can’t lose sight of and must continue to address,” said Murray.

The federal and provincial aid have allowed the city to stave off service cuts and tax increases this year. But Murray warned without more inter-governmental aid in 2021, the city will face an incredibly challenging budget process where difficult decisions will need to be made.

The city manager said so far there has been no conversations with other levels of government to commit to future funding.

“Our hope, clearly, is that we get news sooner rather than later from the federal and provincial government as to the kinds of support that they’re going to be able to provide us,” said Murray.

Read more: Ontario’s mayors ‘encouraged’ by emergency COVID-19 funding

At the moment, he said he isn’t forecasting any cuts, but that could change.

“If there isn’t that support,” said Murray. “It will cause us to have to look at service delivery.”

While the financial burden is immense and will require more money to recoup its losses, Murray said the City won’t be doing it on the backs of taxpayers. To recover $30 million would require the City to raise property taxes by one percent, he said.

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But with years of recovery to come, Murray warned it wouldn’t be viable for Toronto to continuously go back to the province with its hat in hand and future revenue tools would have to be considered.

While the challenges ahead are plentiful, especially for a pandemic which the city has not yet seen its way fully through, the report is taking a wider look at addressing generational systemic issues. Murray said COVID-19 has exacerbated existing inequalities, including within the city’s BIPOC communities and among women.

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Murray said as important as it is to look at tackling the virus itself, to him the bigger issue is addressing the inequities that existed before the pandemic and continue to increase.

“It is so stark and shocking to suggest COVID hasn’t made it worse, of course it has,” he said.

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“Maybe one of the ways forward, for those have been disadvantaged, for them to be able to participate in the way in which they should in the economy, will be I think fundamental to our prosperity. And so, it is BIPOC groups, but also those I would say who experience disabilities and others that aren’t able to participate as fully in the economy as they should,” Murray said.

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