The rhetoric continues to ratchet up in the funding battle between Toronto's mayor and the province, with Rob Ford vowing to keep his promised tax cut, and new evidence emerging that Queen's Park gave the city scant notice before sending a letter cancelling $150-million in support.
As news of the cuts emerged last week, Finance Minister Charles Sousa gave the impression that Mr. Ford was caught off guard because the mayor's office was in disarray and had not kept him in the loop. But e-mails seen by The Globe and Mail show that Toronto's city manager and the mayor's staff were contacted for the first time about the change in funding on June 13 – the same day Mr. Sousa's letter was sent to Mr. Ford.
The revelations come as both sides continue to point fingers. Mr. Ford on Thursday argued again that the province was punishing Toronto for keeping its spending under control. Mr. Sousa's staff countered that the mayor need not cut social housing programs – suggesting the city could raise taxes instead and reinstate the vehicle registration tax.
Mr. Ford has insisted he was blindsided by the province's decision to phase out over three years $150-million in funding the city expected would continue through 2018. E-mails between Mr. Sousa's chief of staff, Fahim Kaderdina, and his counterpart in the mayor's office, Earl Provost, show there was little warning. The first was sent by Mr. Kaderdina at 2:12 p.m. on June 13, accompanied by a copy of the minister's letter. It indicated a voice mail was left earlier in the day. Mr. Provost sent a reply at 2:55 p.m., saying he would call when he had read the letter.
On June 19, Mr. Provost sent another e-mail requesting a meeting and including a letter from Mr. Ford.
An official in Mr. Sousa's office confirmed that the first contact about the funding change was made on June 13, adding that they had hoped to speak with Mr. Provost to "walk him through the letter," but that conversation did not happen.
The minister's office also confirmed that changes to funding such as this one usually require cabinet and treasury board approval, an indication the cut was in the works for some time.
Mr. Ford underlined Thursday that he is not budging on a pledge to hold next year's property-tax increases at 1.75 per cent and to shave 10 per cent from the city's land transfer tax. He also announced he has asked the city's top official to report to the July 16 council meeting on how the provincial cut might affect city services.
City Manager Joe Pennachetti said he has already asked all departments to freeze 2014 budgets at this year's level and, as a result, the cuts will likely come from housing programs, although council could decide otherwise. The change in funding means the city must now close a budget gap of $250-million, he said.
Faced with that gap, some councillors said the mayor should forget about cutting the land transfer tax and suggest taxes might have to increase further.
"It is premature to talk about a 10-per-cent cut on the land transfer tax, that's for sure," Councillor Ana Bailao said.
Councillor Doug Ford characterized the provincial cut as payback for the city's refusal to endorse taxes and tolls to pay for transit expansion. "In my opinion, we have an arrogant, cocky Liberal government along with an arrogant, cocky Premier that thinks she owns Toronto," he said.
In a statement, Mr. Sousa's spokeswoman suggested Mr. Ford cancel his proposed cut to the land transfer tax and reinstate the vehicle registration tax he killed more than two years ago.
"As we've said all along, the city has choices," Susie Heath said. "Cutting funding for social housing is a choice the mayor is making, just as he has chosen not to benefit from land transfer or vehicle registration powers that he holds under the City of Toronto Act."
Mr. Sousa maintains the province has reassumed responsibility for costs that were offloaded onto the city and Toronto will come out $110-million richer in 2016. His calculations include the forgiveness of $230-million in debt the city was not planning to repay. If that is removed, Toronto will be $120-million poorer by 2016.
Adrian Morrow