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A program that distributes Christmas gifts to needy children, a "hardship fund" that covers medical supplies and funeral costs for residents who have no other resources, and support for local business improvement areas are some of the latest "non-core" city services singled out by consultants for possible cuts by Toronto council.

The second batch of potential cost-saving measures were rolled out Tuesday at City Hall and this time economic development, which includes employment and social services, was the target. The city is in the midst of a belt-tightening exercise that is reviewing more than 150 services – part of several initiatives aimed at plugging an estimated $774-million funding gap in next year's budget.

In the case of economic development, the consultants who conducted the review found that 96 per cent of the programs offered were linked to mandatory services such as employment and social services. Their report, which is being released in stages as part of committee agendas, identifies a handful of non-core program areas that could be reduced or eliminated.

The city, the report states, could consider reducing staff support services to BIAs, the local business groups that put up money to pay for such extras as planters and benches in neighbourhood shopping areas. The report also pinpointed social supports and cultural services as areas that could be reduced or cut, and suggested council consider contracting out some employment services.

Michael Thompson, chair of the economic development committee that will consider the report next week, was quick to distance himself from the KPMG proposals, cautioning that it only provides options for cutting costs. Committee members, he said, understand the benefits to the city that spending in these areas brings.

"I think we have to look at the broad implication and impact," he said, noting that cutting employment services, for example, could move more people onto social services. "At the end of the day we may save a few dollars here, but that savings has a greater impact on Toronto residents."

John Kiru, executive director of the Toronto Association of Business Improvement Areas, wondered why his members, who invest $25-million annually in local improvement projects and pay $750-million in taxes, were singled out for possible cuts.

Toronto invented the BIA model more than 40 years ago and it is now copied by other municipalities, including New York City, he said. "We are leaders in this program worldwide," he said.

The city's support helps with the creation of new associations and provides a window into city services and issues for members, Mr. Kiru said. It also ensures local associations hold annual meetings and produce audited financial statements. Without this support, he said, the quality of local organizations would be affected "absolutely."

The recommendations of the economic development committee will go to a special meeting of council in September that will make the final call on all cuts. Separate reviews of city fees and service efficiencies also are in the works, as is a review of the municipality's real-estate holdings.