The City of Toronto could be forced to cancel approximately $300 million in planned capital projects and more than a $1 billion in state-of-good repair work unless other levels of government commit to another round of emergency funding, a new staff report warns.
Toronto’s proposed budget for 2022 is balanced on the basis of $1.4 billion in assumed funding from other levels of government to offset losses related to the COVID-19 pandemic.
It is a budgetary trick that the city also used in 2021 and at the last minute both the province and the federal government stepped in to fill the gap.
But in a briefing note considered by the city’s budget committee on Friday, staff warned of “profound, material and sustained impacts on the city's capital program” without a firm commitment that the money is coming this quarter.
They say that by slashing $300 million, or roughly 7.5 per cent from the city’s capital budget, and cancelling $1.08 billion in one-time funding that was slated to go towards state-of-good repair work the city could mostly fill the gap without a significant property tax increase.
However, they warn that doing so would impact about 12,600 jobs and would “further challenge” a state-of-good repair backlog that is already slated to grow from $7.4 Billion in 2022 to $16.3 billion in 2031.
“This would have a devastating impact on the work that we are doing to invest in infrastructure and to invest in state-of-good repair, many of these things that have been postponed for years and that are much needed to have a healthy and growing city,” Mayor John Tory warned during a briefing at city hall on Friday morning. “That is why support delivered in a timely manner is so important to our city and to its economic future and to its ability to move forward and lead the way when it comes to a strong recovery for Toronto but also for all of Canada.”
The city has already received more than $2.8 billion in emergency funding related to the COVID-19 pandemic but with TTC ridership expected to continue to lag behind pre-pandemic levels for the foreseeable future, the need for support isn’t likely to disappear.
In the briefing note, staff say that the proposed reduction to the city’s capital plan is a “one-time solution and not sustainable.”
They say that without a commitment to ongoing support the city could also be forced to make “material cuts to existing services” and introduce “significant property tax hikes” as soon as 2023.
“Without a COVID-19 backstop or a formal funding commitment in 2023, the staff recommended budget would require offsets to the $550 million to $1.1 billion in estimated COVID-19 impacts,” the briefing note states. “As a point of reference a residential (property tax) increase of 31 per cent would generate $1.1 billion in added revenue.”
Toronto’s nearly $15 billion operating budget is supposed to go before city council for final approval on Feb. 17.