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Ontario Premier Doug Ford and Toronto Mayor Olivia Chow hold a news conference in Toronto on Monday Nov. 27, 2023. Ford says the province will upload two Toronto highways in order to help alleviate the city's growing financial pressures.Chris Young/The Canadian Press

Ontario Premier Doug Ford and Toronto Mayor Olivia Chow have reached a landmark deal for the cash-strapped city that will hand the province responsibility for billions of dollars in maintenance costs for two major expressways.

In return, the municipality has accepted that the province has the right to press ahead with its contentious redevelopment plans for Ontario Place, a former amusement park on Toronto’s waterfront where a proposed waterpark and spa complex has sparked local opposition.

The deal follows repeated warnings from Ms. Chow, and her predecessor, John Tory, that Canada’s largest city is in a precarious financial position that it cannot remedy on its own. Toronto is facing spiralling annual budget shortfalls, with this year’s alone topping $1.5-billion – amounts that the city cannot, by law, borrow money to cover. City and provincial officials, with federal representatives joining more recently, have been in talks for weeks.

The agreement, announced by Mr. Ford and Ms. Chow at Queen’s Park on Monday, will mean Ontario takes responsibility for both the Don Valley Parkway, a major north-south artery, and the elevated, lakeside Gardiner Expressway, the eastern portion of which is subject to a massive multibillion-dollar rebuild.

This could save the city as much as $6.5-billion over the next 10 years, according to a memorandum outlining the agreement, money Ms. Chow said could be used for affordable housing and public transit.

The provincial government says other provisions in the deal could deliver up to a total of $1.2-billion in support for the city’s operating budget over the next three years, most of it for public transit and homeless shelters. But this remains far from enough to fill Toronto’s budget hole even for just this year. And much of this promised money is either time-limited, one-time funding or contingent on participation from the federal government. Both Ms. Chow and Mr. Ford urged Ottawa to come forward with more cash for Toronto.

Katherine Cuplinskas, a spokesperson for federal Finance Minister Chrystia Freeland, said the federal government would be a “strong partner” for the city but did not pledge new funding.

The deal also commits both sides to a comprehensive review of the city’s books, to be completed in 2026. Both the Premier and the mayor acknowledged that Monday’s agreement was only a first step.

Like other cities across Canada, Toronto’s books were battered during the COVID-19 pandemic, especially as public transit ridership plummeted. But various experts have argued for decades that cities cannot fulfill all of the tasks they are asked to take on, from funding police to building homeless shelters and affordable housing, without new sources of revenue.

On the upload of the Gardiner and the DVP, Mr. Ford noted that many drivers from outside Toronto use the two expressways. He also pledged never to implement tolls. He had previously rejected uploading the two expressways when it was raised in Toronto’s mayoral by-election earlier this year by candidate Ana Bailão.

The deal means Ms. Chow won’t be able to fulfill her campaign promise to stop the expensive rebuild of the eastern portion of the elevated Gardiner.

Shortly after the announcement, the province introduced a bill that would authorize it to proceed without city approvals on plans to allow Austria-based Therme Group to build a massive spa and waterpark at the province’s Ontario Place site on Toronto’s waterfront.

Ms. Chow, who campaigned against the spa, said Monday while her position is still that Ontario Place should be parkland, she accepts that the fate of the provincial site rests with Queen’s Park, not city hall. The city says its lawyers have concluded it lacks the power to fight the plan.

Monday’s bill would give Ontario Infrastructure Minister Kinga Surma the power to issue what is known as a minister’s zoning order to approve the project. It also strips the city of the ability to sell nearby land needed to access the provincial site. It even scraps the city’s authority over noise complaints in the area.

Plus, it appears to attempt to pull the rug out from under a legal proceeding launched by an activist group fighting the plans, Ontario Place for All. The group has asked a court to review whether the government should have done an environmental assessment on the spa. The bill would explicitly exclude Ontario Place from environmental assessment and heritage-protection legislation.

Norm Di Pasquale, co-chair of Ontario Place for All, said his lawyers would look at the bill for its impact on their legal case. But he vowed to keep fighting the plans.

The Ontario Place plan remains subject to a value-for-money probe by the province’s Auditor-General.

The memorandum on the deal released on Monday says the province needs to speed up approvals for Ontario Place, even though the city has not finished evaluating the plans, because an approaching year-end deadline means it could “be in legal breach” of its contract with Therme and “put millions of taxpayer dollars at risk.”

As part of the deal, Mr. Ford and Ms. Chow said they had agreed to discuss moving a planned underground parking garage set for Ontario Place to the city’s nearby Exhibition Place. The 2,100-car lot was expected to cost hundreds of millions of dollars and require a premium price tag, given the complexity of excavating so close to the lake.

The province’s plan still includes moving the Ontario Science Centre from its Flemingdon Park location to Ontario Place. But the two governments now say they have agreed to discuss maintaining some sort of science-based programming at the existing building, for the local community.

In addition to conceding ground on Ontario Place, the city has agreed to the province’s housing targets, to make surplus city land available for housing and to increase population density near public transit. The city has also pledged to “find efficiencies.”

With reports from Oliver Moore and Laura Stone

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