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Canada City manager warns impact of provincial cuts will cost Toronto nearly $180-million in 2019

Provincial funding cuts have left Toronto with a nearly $180-million hole in its budget this year, the city’s top bureaucrat said Thursday.

The figure is considerably higher than previous estimates of the impact of provincial cuts and comes amid increasing rancour from city politicians over the way costs are being dropped in their laps without consultation or, in some cases, any detailed information.

In a nine-page briefing note to Toronto’s mayor and councillors, city manager Chris Murray states that his latest figure is the estimated impact of the provincial cuts, and that it “will be updated on a regular basis as new information becomes available.”

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“These unilateral, retroactive cuts to child care and public health will hurt residents, especially kids and families, and threaten Toronto’s prosperity,” Toronto Mayor John Tory said in a statement forwarded by his press secretary.

“I remain open to sitting down and discussing these cuts with the province in a productive manner. We have repeatedly offered to attend any such meeting, which could have happened weeks or even months ago.”

Mr. Murray said that provincial cost-cutting moves will result in a $177.65-million budget gap for the city this year. He did not identify ways the city might fill this hole, which the province has suggested can be covered by Toronto politicians running a tighter ship.

At a news conference Thursday morning, provincial Treasury Board President Peter Bethlenfalvy did not challenge Toronto’s numbers. He denied the government was balancing its books on the backs of cities, arguing that municipal governments need to work with the province to get Ontario’s deficit and debt under control.

“They have to … do what we’re doing, find the efficiencies, work smarter, find those pennies and nickels,” Mr. Bethlenfalvy said.

The province has argued that the cuts to Toronto amount to a tiny fraction of the city’s overall budget. Councillors have countered that the bulk of the budget is fixed costs or consists of direct flow-through from other levels of government, making the impact of the cuts on the remaining pot of money more severe.

The cost pressures for the city, according to Mr. Murray, are primarily in Children’s Services, which is facing an $84.8-million shortfall in 2019, and Public Health, which now has a $65-million gap for this year. There are smaller hits that will affect Toronto Transit Commission (TTC) repairs, which were to be funded by a promised and now cancelled increase to the provincial gas-tax revenue given to the city, and to paramedic services.

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The financial hit to Toronto comes in the wake of the province’s budget, in April, and months after the city finalized its own annual budget. Under the law, Toronto cannot borrow to finance operating expenditures. The city’s 2019 budget was already optimistic and will achieve balance only if tens of millions of dollars in savings can be found over the year, if a number of scenarios break favourably at the TTC and if Ottawa comes through with refugee shelter funding.

Toronto has limited tools at its disposal to raise money and the last city budget debate featured a series of unsuccessful efforts to find money for items costing less than $1-million. Using standard budgeting estimates, filling a hole of the scale identified by Mr. Murray would require a property-tax increase of about 6 per cent, on top of inflation.

Through his tenure, Mr. Tory has run on a consistent promise to keep property taxes at or below the rate of inflation. He has managed to do that each year.

In Question Period at the legislature on Thursday, Premier Doug Ford deflected repeated questions from the NDP about the downloading of costs onto municipalities.

Mr. Ford labelled the Opposition as spendthrifts, mentioned the inquiry his government launched into the province’s finances and noted that Queen’s Park had demanded cash from Ottawa to cover the costs of “illegal immigration,” referring to his government’s spat over funding for refugee claimants.

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