Ontario Finance Minister Charles Sousa will meet with Toronto Mayor Rob Ford on Monday over the province's decision to cancel $149.3 million in funding to the city.
Mr. Sousa contends the money is no longer necessary because the province has taken over some expenses, such as court security and disability benefits, that used to be paid for by municipalities.
City hall, however, argues that it needs the money to cover costs -- such as social housing and the TTC's operating budget -- that Queen's Park offloaded on it in the 1990s.
What's more, a 2008 letter from the province shows the funding to Toronto continuing until 2018. Last week, Mr. Sousa informed the city that the money will instead be cut off in 2016.
Mr. Ford asked for a meeting, in hopes of negotiating a better deal for the city, and the Finance Minister agreed.
"I look forward to meeting with the Mayor because I still feel it's necessary for us to have this discussion and understanding," Mr. Sousa said at Queen's Park Friday. "That we have to do this in partnership and for the benefit of the people of Ontario and the people of Toronto."
Toronto Councillor Shelley Carroll, a Liberal who chaired the city budget committee in 2008, says she thought she had a deal with the province to help fund the city's social housing costs until 2018. The funds were for social housing services, which were not included in uploading talks, she said.
Asked why the province would cut that funding while the city continues to be responsible for social housing, Ms. Carroll suggested the new Finance Minister and Premier may not be "100 per cent crystal clear" on the implications of their decision or how the $150-million is used.
"We need to sit down with them and make sure they understand that piece of paper that we are circulating, we thought it meant something," she said referring to the 2008 letter. "We need to sit down and discuss what you mean when you say, 'Don't worry, you'll be made whole,' because it doesn't feel like that right now."
Councillor Doug Ford, the Mayor's brother, said he was optimistic the two sides could reach an arrangement.
The city has been budgeting on the basis of the 2008 letter and that the province had "reneged on their promise."
"We do multi-year budgeting and forecasts and when they give us a commitment then we expect them to hold up their end of the bargain," he said, adding that he understood Queen's Park is strapped for cash. "Everyone's feeling pressure right now. I just don't believe it's the right thing to do to put this on the backs of the residents of Toronto."
Mr. Sousa said the 2008 letter - which shows Toronto receiving more than $100 million annually until 2018 - was not a promise.
With a report from Sunny Dhillon