Federal Finance Minister, Chrystia Freeland says the Government of Canada is already spending plenty of money on the City of Toronto, and does not have a room to spend more.
In a letter to Mayor Olivia Chow, Freeland said the federal government will continue to be “a committed partner for the City of Toronto” but added that “the ability of the federal government to spend is not infinite.”
“In 2023-24 alone, we have committed to provide the City of Toronto with $1.86 billion in federal funding—an increase of about $1.2 billion from 2022-23. This includes the infrastructure-focused Canada Community-Building Fund; funding for public transit infrastructure and decarbonization; and funding for the Substance Use and Addictions Program,” Freeland wrote. “Beyond this, I am aware that Toronto has recently applied to receive significant funding through the federal Housing Accelerator Fund, in addition to $436.3 million already provided to Toronto through the Rapid Housing Initiative.”
The letter comes in response to Chow’s request for the federal government to boost funding for the city.
Chow, who was just elected mayor weeks ago in special byelection, inherited a city facing difficult financial circumstances.
Toronto is in a financial crunch, with around a $1 billion shortfall left over by the pandemic. The city had hoped that the higher levels of government would continue to provide aid to make up the shortfall, but the federal government has indicated that no further funds will be coming for that purpose.
In a statement responding to Freeland’s letter Monday, Chow called the response “finger-pointing” and said she’s hopeful the two governments will be able to work together.
"Since I took office earlier this month, the Province has signaled its willingness to be a partner with the City of Toronto. I remain hopeful that the Federal government will join us as well, despite today’s finger-pointing,” Chow said.
“Recently, when we worked together sheltering refugees, we saw some immediate short-term successes. That is the kind of continued partnership we need to deliver affordable housing, fast and reliable transit, and good public services for the people of Toronto for years to come.”
The city petitioned the federal government recently to spend more to take care of refugees and asylum seekers who have been turning to the municipal shelter system.
Immigration, including refugees and asylum-seekers, is an area of federal responsibility. The federal government finally agreed to put up the roughly one hundred million dollars that the city was asking for when the issue came to a head in recent weeks, with scores of people sleeping on the street outside of a shelter intake centre downtown.
Toronto’s many Liberal MPs, of which Freeland is the highest ranking, had mostly been silent on the issue as the feds faced criticism.
In her letter, Freeland pointed to reserve funds at the city and the province as an option and pointed out that cities are an area of provincial responsibility under the constitution.
In a statement, Ontario Premier Doug Ford’s office suggested the funding is a problem for the city and the federal government to resolve.
“The request by the City of Toronto for additional funding is directed to the federal government. For our part, Ontario has already stepped up with $3.3 billion in operational funding for 2023 and has fulfilled Toronto’s request to address their 2022 COVID-19 related budget pressures,” Ford’s spokesperson Caitlin Clark said in an email. “We hope the federal government and Toronto can work together to find a solution.”
The city recently sliced around $300 million in capital funding from its budget in order to cope with the financial crunch, but further cuts are expected if more money cannot be found.
Like most candidates in the recent election, Chow campaigned on a promise to get a new deal for Toronto with the federal and provincial governments, one that would see cities get regular funding instead of piecemeal grants for various programs on a year-to-year basis.
