Ontario Premier Doug Ford and Toronto Mayor Olivia Chow take their seats in the Premier's office as they hold a meeting at the Queens Park Legislature in Toronto on Sept. 18.Chris Young/The Canadian Press
Ontario Premier Doug Ford has announced his backing for a new financial deal that would address Toronto’s perennial budget shortfalls, while appearing cool to the city’s recent push for extra taxes.
The announcement of a municipal/provincial working group tasked with figuring out how to fix the city’s structural budget problems amounted to a shift in tone for a politician who has long argued that Toronto’s problem is wasteful spending.
“They’re in a real tough financial situation,” Mr. Ford told reporters Monday at Queen’s Park alongside Olivia Chow after a more than 90-minute meeting with the Toronto mayor, who was elected this summer after the resignation of John Tory. “We’re going to be there to support them every step of the way to have sustainable funding.”
Toronto has faced several years of budget woes, a situation worsened by the pandemic but with roots that go back further. Mr. Tory began his third term last fall by promising to spend it seeking a new financial deal for the city – a mission taken up in the past few months by Ms. Chow.
Toronto is now projecting a $1.5-billion shortfall in its 2024 operating budget. The city is prohibited by law from running an operating deficit. City staff also recently projected a nearly $50-billion funding gap over the next 10 years.
In response to that staff analysis, Toronto City Council voted this month to pursue new ways to raise money, including a municipal sales tax, which would need provincial approval. On Monday, Mr. Ford appeared to rule out both a new sales tax and giving the city a slice of the existing HST, before later suggesting some potential openness to the latter.
For her part, Ms. Chow said it did not matter what form the funding took.
“The City of Toronto really doesn’t completely care where the money comes from, as long as there’s, structurally, a promise,” she told reporters. She noted that the city delivers $1.1-billion in services such as transit and social supports that have traditionally been the responsibility of higher levels of government.
“What we’ve seen in the last 20 years is that more and more costs are being loaded onto the city property taxes, and that’s why structurally it’s not sustainable.”
The working group is to report back by the end of November and is tasked with promoting efficient delivery of public programs, protecting front-line services and not raising taxes or fees.
Both Mr. Ford and Ms. Chow also urged the federal government to join the working group. The Premier said it was “critical” that Ottawa steps up financially.
Katherine Cuplinskas, a spokesperson for Deputy Prime Minister and Finance Minister Chrystia Freeland, a Toronto MP, said Monday that it was “appropriate and necessary” for the city and province to work together, but did not make any promise of Ottawa joining the effort.
In July, Ms. Freeland rejected a request for bailout from Toronto, instead suggesting that the Ontario government is in an “excellent fiscal position” to help.
The province on Monday also announced $26.4-million in funding for Toronto under the Canada Ontario Housing Benefit, which helps subsidize private-sector rents for asylum claimants and others experiencing homelessness.
Housing for asylum-seekers became a source of inter-governmental friction this summer after Toronto City Council opted to restrict their access to shelters prior to Ms. Chow’s election. Dozens of asylum-seekers ended up sleeping on the sidewalk outside a city shelter, prompting a wave of criticism. In July, council reversed its own policy and made shelter beds available.
Monday’s announcement was framed by the province as seeking to create space in shelters by helping asylum-seekers and others to find more stable housing.
With reports from Jeff Gray and Laura Stone
Oliver Moore