Toronto will have to cancel hundreds of millions in planned capital projects if other governments don't commit to new emergency funding
The exterior of City Hall in downtown Toronto is seen. THE CANADIAN PRESS/Chris Young
Published Friday, January 28, 2022 4:28PM EST
Last Updated Friday, January 28, 2022 4:31PM EST
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.