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Motorists travel over the Cambie Bridge in Vancouver on March 12, 2020.DARRYL DYCK/The Globe and Mail

Canada’s cities are asking for at least $10-billion in emergency funding from the federal government, warning that they are running short of money to keep essential services going.

Federation of Canadian Municipalities (FCM) president Bill Karsten, a Halifax councillor, said on Thursday that the fiscal trouble cities are facing is a “national crisis … so we’re calling on the federal government to show real leadership.”

The mayors of Toronto and Montreal echoed the plea for financial assistance from higher levels of government and warned their cities, where more than 12 per cent of Canada’s population lives, could not cope on their own.

Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland responded to the FCM’s request in separate news conferences Thursday by stating that they were aware of the challenges cities face. But neither offered a promise of federal cash.

To date, Ottawa has announced $145.6-billion in direct support for various segments of the population, including businesses, non-profits, students and cultural and sport organizations.

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Ms. Freeland declined to say whether the federal government is working on a package of measures to support cities.

“We are very aware of the urgency of the situation that municipalities across the country face,” she said. “We also know that cities have constraints on their own ability to borrow. We know that the cities are having conversations with the provinces as well, which is appropriate too.”

Toronto Mayor John Tory, whose city is facing an operating shortfall of up to $2.76-billion, said he was “strongly supportive” of the FCM ask.

“An investment made in this city now, including in transit operating funds, for example, will pay huge dividends to the federal and Ontario governments as we get people back to work in Toronto and refill the coffers of those two governments in the process,” Mr. Tory told a city hall briefing.

On Thursday, the Toronto Transit Commission announced layoffs of up to 1,000 drivers and 200 non-union staff. The agency, which carries more riders than any other in Canada, has been losing $90-million a month.

In Montreal, which is looking at a potential budget shortfall – including its share of the region’s transit losses, of close to $540-million – Mayor Valérie Plante made her own plea to higher levels of government.

“Our room to manoeuvre is very narrow, so the solution cannot only rest with Montreal taxpayers,” she said. “Quebec City and Ottawa have to help us.”

Other cities have also been sounding the alarm, warning of huge losses and in some cases starting to lay off civic employees. Mayors across the country say that they cannot cut their way out the expected budget shortfalls.

According to the FCM, Canadian municipalities will need $10- to $15-billion this year alone to make up for steep declines in revenue and rising costs.

optional trimAbout $2.4-billion would be earmarked for covering transit losses and be allocated based on ridership, meaning that the bulk would flow to the heavily used agencies in Toronto, Montreal and Vancouver. Transit ridership has plunged across Canada, with particularly severe revenue impacts on those agencies that rely on the fare box to fund operations.optional trim ends

The formal FCM request for federal aid comes after weeks of increasing concern from mayors and municipal leaders, who have limited mechanisms for raising money and are legally prohibited from passing a deficit budget.

On Thursday, Edmonton Mayor Don Iveson, who is the chair of the FCM’s big-city mayors’ caucus, dismissed the prospect of municipalities being allowed to run deficits as a way to weather this storm. British Columbia recently allowed cities in that province to carry deficits forward into next year, in specific circumstances, and other provinces are thinking about this. But the idea remains controversial.

“We don’t have revenues that will rise with the economic recovery after this, with which to replenish the hole dug by those deficits,” said Mr. Iveson, whose city is set to revise upwards its projected budget shortfall, and is anticipating a gap as wide as $260-million.

“We need immediate aid in order to support continuity of our businesses, to forestall further layoffs and to ensure the continuity of essential services that Canadians rely on, and to avoid tax increases and financial depletion of our reserves, all of which would continue to put municipalities in Canada in a ruinous long-term financial position.”

Gabriel Eidelman, director of the Urban Policy Lab at University of Toronto’s Munk School of Urban Affairs and Public Policy, said that federal action is required to help municipalities.

“Cities are hemorrhaging money, and the feds are in a much stronger fiscal position than provincial governments to help,” he said in an e-mail exchange.

“If left to the provinces alone, we’d waste time and risk municipal layoffs and drastic cuts to public services from coast to coast. The feds have the tools to get money into municipal coffers across the country quickly.”

With reports from Bill Curry and Les Perreaux

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