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Canada's Deputy Prime Minister Chrystia Freeland attends a news conference on the coronavirus disease outbreak on Parliament Hill in Ottawa, on March 19, 2020.

BLAIR GABLE/Reuters

The mayors of Canada’s biggest cities are asking the federal government to add billions in extra spending on poverty-reduction measures to stamp out homelessness in their communities as part of an economic recovery from COVID-19.

The group from the Federation of Canadian Municipalities has been making the request during meetings with key cabinet ministers, including Finance Minister Chrystia Freeland, ahead of the Liberals' promised update on the state of federal finances.

Ms. Freeland is expected to deliver the update in the coming weeks, which will show how deep the Liberals now expect the deficit to go after it was projected in July to hit $343.2-billion.

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With expectations that the update may include new spending measures, the big-city mayors group is making the case that there is an opportunity now to tackle homelessness by scaling up a rapid-housing program the Liberals unveiled earlier this fall.

Some of the country’s biggest cities will split half the $1-billion pledged for the program that would allow housing providers to purchase properties on the market that could be quickly converted into affordable housing units.

But with only 3,000 units set to be added to the stock of affordable housing, cities are looking for potentially $7-billion more over the next few years to meet the remaining need.

Edmonton Mayor Don Iveson, who heads FCM’s big-city mayors group, said the group will figure out the upfront costs for a scaled-up program that would house the 25,000 people experiencing chronic homelessness, which the government has vowed to end.

At the same time, Mr. Iveson said provinces and the federal government could find savings on health care and justice costs simply by giving people a roof over their heads, and ease concerns from businesses about social disorder issues.

“We can quell anxieties, create jobs, and inject confidence in the economy and reduce demand on our health care system so it can respond where it needs to in the pandemic,” he said Tuesday during a virtual press conference.

“We’ll continue to articulate that return on investment as we refine what the upfront costs will be to acquire those units to achieve ending chronic homelessness.”

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The Liberals have openly talked about making infrastructure investments to prod an economic recovery from the worst recession since the Great Depression.

Infrastructure Minister Catherine McKenna spoke Tuesday about reaching out to Conservatives who were in government during the global financial crisis just over a decade ago, when federal infrastructure spending was seen as paving a road to recovery.

She talked about doing things quickly and targeting investments to create jobs.

“It’s critically important that we figure out, okay, how do we move forward, but that doesn’t mean you forget outcomes,” she said during a virtual event with the Canadian Club Toronto.

“This isn’t about building gazebos. This is about actually getting real outcomes that are consistent.”

One of those areas Ms. McKenna mentioned was public transit, which municipalities hope the government will expand, but also help to keep things running now that ridership and revenues are down.

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Mr. Iveson said extra transit funding will be needed to avoid an erosion of service that could affect recovery plans whenever people start returning to work in greater numbers.

Drops in transit revenues due to COVID-19 restrictions have helped stretch local budgets, threatening cuts to public services as councillors try to balance their books.

The federal government has provided $2-billion for cities, which provinces are supposed to match, through to March.

Mr. Iveson said cities don’t yet have a specific funding request, as everyone is trying to do some belt-tightening first.

Earlier this year, the Federation of Canadian Municipalities estimated the operating budget shortfall for its members could be between $10-billion and $15-billion this year depending on the severity and length of the pandemic.

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