No major COVID bailout for cash-strapped Toronto in Ontario budget

How Ont. spent $2B less than planned Ontario spent $2 billion less than planned, with programs like Ontario Works and ODSP using $183 million less than budgeted.

Toronto has been left in the lurch by Queen’s Park after the 2023 Ontario budget revealed little in the way of a financial rescue for the cash-strapped city.

Ontario’s biggest municipality had called on the province to help supplement its massive 2023 shortfall, asking for $510 million in so-called COVID-19 hangover costs.

But the government did not relieve the city’s current pandemic pressure, indicating instead that it was waiting to see how Ottawa responds to a similar request from Toronto at the federal budget unveiling next week.

It did provide $48 million in funding for Toronto’s supportive housing costs, fulfilling one of the three asks Deputy Mayor Jennifer McKelvie made of Finance Minister Peter Bethlenfalvy in a letter sent earlier this month.

The city’s 2023 budget, however, will still have a nearly $1 billion shortfall without additional funding from Queen’s Park and Ottawa.

“Toronto’s number one ask was more money, $48 million, for supportive housing to help those who are homeless and we stepped up with the full ask, “ Bethlenfalvy insisted during an interview with CP24 on Thursday. “That was their number one ask.”

Toronto officials were also hoping that the province would cover the cost of the development charges the city would no longer receive as a result of Bill 23, which slashed the fees in order to spur the construction of more housing.

City staff had counted on that revenue to fund the infrastructure and services needed to support the growth, and pegged the loss at more than $200 million a year.

The government reiterated Thursday that it would be conducting an audit of select municipalities to establish a baseline of municipal reserves and development charges, and would determine after that how it would supplement any shortfalls connected to Bill 23.

Bethlenfalvy also told CP24 that discussions would continue about funding to offset lost revenue as a result of the pandemic.

In a statement following the release of the budget, Deputy Mayor Jennifer McKelvie thanked the province for helping to fund wrap-around services for 2,000 vulnerable residents in supportive homes, noting that these kinds of supports “are the most effective, dignified, and cost-effective solution to chronic homelessness.”

McKelvie did not address the lack of funding for COVID-19 costs in her statement, only stating that her advocacy for “further financial support” would continue.

She also said that the city “expects the province to honour its commitment to keep the City whole when it comes to development charges.”

Some critics, however, are warning that the lack of investment in Toronto could force the city to make some difficult decisions.

“Transit fares could go up, property taxes could go up even higher than they’ve already been raised,” Liberal municipal affairs critic Stephen Blais told CTV News. “You’re going to see potentially a decrease in services if the city can’t cover those costs.”

“Because the Conservatives are not stepping up, Torontonians are going to be seeing a big property tax hike and service cuts,” NDP housing critic Jessica Bell said.

“Conservatives have turned their back on municipalities.”