Toronto has trimmed its 2022 budget gap but still was looking at a shortfall of hundreds of millions of dollars, as the city approached Mayor John Tory’s self-imposed deadline for funding support from higher levels of government.
A report released Tuesday by city staff projects the city falling $703-million short of the money it needs to finish the year with a balanced budget, as required by law. That gap is down by $112-million since the July estimate after some previous projections proved too pessimistic.
Mr. Tory says the budget gap is owing to COVID-19-related spending and revenue shortfalls, and should be covered by the federal and provincial governments. He wanted a commitment from them by Wednesday, Nov. 30, but both have been pointing to past support without promising any more.
The mayor was not available for interview Tuesday, but in an evening statement, his spokesperson said Mr. Tory was continuing to advocate “relentlessly” with Queen’s Park and Ottawa.
“Despite the fact that we have maintained an AA credit rating thanks to our prudent fiscal management, the seriousness of our city’s financial situation cannot be understated,” Blue Knox said.
The city is ready to cover the funding shortfall by reallocating up to $403-million worth of spending deferred since the start of the pandemic while also putting off $300-million of capital spending that had been budgeted for 2022. But doing so would put additional pressure on a city that critics say is already looking shabby.
In a summer briefing note, city staff said that the biggest victims of the deferred 2022 spending would be transportation services, primarily road rehabilitation, and the Toronto Transit Commission. About $174-million in money earmarked for this year would go unspent at those two departments.
Those two city departments were already facing an approximately $12-billion backlog over the next decade in maintenance and equipment replacement, a decline that threatens to get worse if additional money is redirected to filling the budget gap.
Other areas that would feel the pinch include corporate real estate and the parks department, which would lose about $27-million in 2022 spending. Parks already was facing its own backlog of roughly $940-million over the next decade.
Putting public pressure on the higher levels of government, Mr. Tory announced earlier this month that he needed a funding commitment by the end of November. Although the budget doesn’t need to be in balance before the calendar year-end, a spokesperson for Mr. Tory said the additional time was needed for staff to process the new numbers.
However, so far, this demand has gone unmatched by any public commitment.
This week, representatives for both Deputy Prime Minster Chrystia Freeland and Ontario Premier Doug Ford were non-committal.
“Cities, including Toronto, have had a reliable partner in the federal government since the start of the pandemic,” said Jessica Eritou, spokesperson for Ms. Freeland’s office, in an e-mail.
“In fact, the federal government has provided over $5-billion in emergency funding since March of 2020 – over and above regular transfers that go to municipalities. The provinces have a particular responsibility to support and work with municipalities, too.”
At Queen’s Park, Ford spokesperson Caitlin Clark pointed to past support and said the province was willing to contribute more.
“But we cannot do it alone,” she wrote in an e-mailed statement.
“We need to have the federal government as a partner to ensure Ontario’s municipalities can continue to deliver vital services … and will work with them to be there for municipalities moving forward.”