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Disputes between different levels of government about who owes what to whom are the most tiresome in Canadian politics, and it is always prudent to view the latest cry of "we was robbed" with a certain skepticism. But in the case of Ford v. Sousa, the mayor has a point.

Rob Ford says that Ontario Finance Minister Charles Sousa blindsided Toronto by announcing that the provincial government was phasing out $149-million in funding for housing and social programs. It is hard to dispute that characterization.

Toronto had no advance notice that Queen's Park was pulling back the money. In fact, the city is relying on it to balance the budget. City officials were working on the assumption, based on correspondence from their provincial counterparts, that the money would continue to flow till at least 2018. Now, they learn in a letter from Mr. Sousa that he is pulling the rug out. No wonder Mr. Ford says he is "furious."

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Mr. Sousa tried to soften the blow by listing all the nice things the province is doing for the city, including gradually restoring hundreds of millions of dollars for services downloaded to the city under mean old Mike Harris. "I am writing to reaffirm my government's commitment to a strong partnership with the City of Toronto," he writes in the June 13 letter that hit Toronto officials from the blind side. Queen's Park, he says, is even forgiving an old loan to the city.

That is all very well, but it doesn't change the fact that, thanks to Mr. Sousa and his Liberal colleagues, Toronto is left with a gaping hole in its budget. According to city figures, Toronto is losing $115-million for social housing and $34-million for social and employment services through 2018 – no small change.

The loan forgiveness changes nothing. Toronto has not made any payments on what is called the Toronto Debenture Loan since 2005. Forgiving it only formalizes a long-held understanding that (as a city backgrounder puts it) "Toronto would not be required to repay this transitional support," which was meant to help the city through the process of amalgamation in 1998.

Mr. Sousa tells Mr. Ford not to fret so. Toronto is running a budget surplus and if it can't find the money, well, it "has choices that it can make … he has tools and abilities unique to Toronto." What Mr. Sousa seems to be saying is that if the Mayor doesn't like the provincial cuts, he can always raise taxes.

As you might expect, that suggestion sent Mr. Ford through the roof. And so it should. That the city is fortunate enough to have run a surplus does not mean that it is suddenly rolling in dough. The city's finances, though improving, are still fragile. The surplus results in part from transitory factors, such as lower diesel-fuel costs, that could easily change.

Toronto needs that money. Officials note that the city is already struggling to find $40-million for housing programs, not to mention the repair backlog of hundreds of millions it faces at Toronto Community Housing.

Yes, it could raise taxes to fill the gap, but why should Toronto be the one to make up for a provincial cut? It is tempting to draw the conclusion reached by Mr. Ford: that Queen's Park is making Toronto pay for its improved financial management.

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Shouldn't it be the other way around? If the city is doing better at handling its money, shouldn't the province be rewarding instead of punishing it?

As Councillor Denzil Minnan-Wong observes, higher levels of government have often fended off Toronto's pleas for more funding by saying the city should get its books in order first. It has started to do just that. The way he sees it, "they should be giving us more money because we're spending it better."

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