Toronto could face ‘extreme’ service cuts, tax hikes without financial help, Tory says

Toronto Mayor John Tory appealed to the provincial and federal governments for immediate financial help on Thursday, warning that without it the city could face “unprecedented” tax hikes and “extreme” service cuts.

In a letter to Premier Doug Ford and federal Finance Minister Chrystia Freeland, Tory said the city needed financial commitments by the end of the month to address COVID-19 pandemic-related shortfalls.

He said Toronto faces a $815 million operating budget deficit this year directly related to the pandemic.

Meanwhile, he said the city could face budget pressures of nearly $1.5 billion next year before accounting for any property tax increase or funding commitments from the other orders of government.

“Given our limited options to raise revenue, and our inability to run budget deficits, we do not have the fiscal capacity to absorb these massive shocks to our system,” Tory wrote in the letter, dated Wednesday and shared publicly Thursday.

Tory noted the city has received upwards of a combined $3 billion from the provincial and federal governments since 2020.

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Over that time, the city had also introduced $1.6 billion in “savings, cost mitigation efforts, and other offsets,” Tory said.

But without more help, Tory warned the city could also face cuts to programs and its capital budget, which he said could “eliminate thousands of jobs” and “threaten” the city’s economic recovery.

In the letter, Tory pointed to campaign and budgetary promises made by both governments to offer municipalities COVID-19 financial support.

“We urgently require a commitment from the federal government and province to support our continued recovery from the pandemic,” he wrote.

This year’s pandemic-related budget shortfall is a combination of lost revenue from transit and increased shelter costs, along with lower returns on other streams such as parking fees and hotel taxes, Tory said.

In a statement emailed to Global News on Thursday, Christine Wood, a spokesperson for the premier’s office, said the provincial government understands the pandemic “presented significant challenges to our municipal partners.”

“That is why we stepped up and worked with all levels of government to provide unprecedented funding to support municipalities to deliver $4 billion in support through the historic Safe Restart Agreement (SRA),” Wood said.

She said Ontario is “ready and willing to contribute more to support municipal partners.”

“But we cannot do it alone,” Wood continued. “We need to have the federal government as a partner to ensure Ontario’s municipalities can continue to deliver vital services.”

Wood said the provincial government has asked the federal government to provide “additional support that is aligned with the $1.3 billion in unmatched provincial investments that we’ve already delivered since the Safe Restart Agreement and will work with them to be there for municipalities moving forward.”

A representative for Freeland did not immediately respond to request for comment on Tory’s letter.

-with files from Global News