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Education Minister Liz Sandals pictured on November 25, 2014.Kevin Van Paassen/The Globe and Mail

The province will penalize school boards for holding on to underused schools in its next budget, an approach that will hit the Toronto District School Board harder than most.

The TDSB is still reviewing its funding allocation after receiving the numbers Thursday morning. It's too early for the board to know the net change over last year's budget, said a spokesman.

Education Minister Liz Sandals says the ministry's total spending of $22.5-billion will be the same as last year, but the boards will be hit financially if they're holding on to empty or near-empty properties.

"We will be focusing the funding this year on funding for programs and resources for students who are actually there," she said.

The cuts tied to empty schools will come from operational funding, said Ms. Sandals. That pool of money is relatively small within the total budget, so it's unclear how much the TDSB stands to lose.

The province is reorganizing other aspects of how it funds buildings and maintenance, and the TDSB will benefit from at least one of the other changes: an extra $83 million for routine maintenance.

Though Queen's Park is making clear its logic behind cutting operational funding, and its desire to hasten the sales of empty schools, it isn't creating new conditions forcing the boards to spend a certain way or to speed up those sales.

However, the board will be under extra scrutiny in other ways, said Ms. Sandals.

"We're not putting a lot of rules," she said.

"There will be a few things where we will be looking very carefully at how boards have spent the money."

Near-empty schools in northern and rural parts of Ontario will be spared the operational cuts if they are the only local options, Ms. Sandals said. Urban boards with a high rate of underused schools, however, are under increasing pressure from the province. This winter, at Ms. Sandals' instruction, the TDSB started reviewing a batch of schools for closure.

The process of merging and selling schools can take years. The operational cut may be phased in over several years; the province will explain those details to the boards on Thursday, said Ms. Sandals.

Ontario school boards with empty property already feel the monetary pinch that goes along with it, including the TDSB, which has been relatively slow to sell off its properties as the birth rate has declined.

About one-tenth of the province's schools are more than half empty, but the rate at the TDSB is higher. One-fifth of its schools are less than 65 per cent full, the board's benchmark for underuse.

Provincial funding has long been parcelled out mostly according to number of students, not by number of schools, which means boards need to stretch their budgets to cover extra maintenance costs. Boards with too many empty buildings also have trouble convincing the province to pay to build new schools in growing neighbourhoods.

Part of the operating budget "is currently allocated based on funding empty space," she said. She declined to say how much has generally been spent on maintaining empty buildings, or how much of that spending will now be eliminated at the provincial level.

Last fall, the Liberal government said it would cut as much as $500-million from the education budget in the next three years as it attempts to whittle down a $12.5-billion deficit.

The province spends about $250 million funding unused spaces at about 600 schools that are less than half full.

Ms. Sandals said next year's projected enrolment numbers are in, and they show continued decline in the total number of Ontario children.

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