The city will borrow $129 million from Queen’s Park over the next two years as it looks to plug a hole in its budget created by the loss of provincial housing funding in 2013, Budget Chief Gary Crawford confirms to CP24.

The loan, the exact terms of which won’t be revealed until Thursday, became necessary after the province refused to provide the city with funding to make up for the elimination of a fund that attempted to offset the additional social housing costs faced by Toronto.

“Our option is do we raise taxes or do we gut the services and we don’t want to do either, so we are looking at a balanced approach to spread this out over the next few years,” Crawford told CP24 on Monday. “I think it is responsible and I think it is prudent.”

The proposed operating budget for 2015 relies on the province restoring $86 million in funding that it cut when it cancelled the Toronto Pooling Compensation, however with the province refusing to do so it appears the city will instead take Finance Minister Charles Sousa up on his offer of a line of credit of up to $200 million with interest set at “commercial rates.”

Speaking with CP24 on Monday, Coun. Janet Davis said the province’s refusal to make the city whole is just the latest example of Toronto being treated badly by Queen’s Park.

“The provincial government just slammed the city last year (with the elimination of the program) and now we are struggling. There is a huge gap in the budget and we are going to have to borrow and pay back money at commercial rates. I don’t think it is right and I don’t think it is fair,” she said.

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