‘Weapons down, but not away’: Tory says province will help city with budget shortfall, but Bill 23 still a threat for Toronto’s finances
Published Wednesday, November 30, 2022 3:05PM EST
Last Updated Wednesday, November 30, 2022 3:46PM EST
The Ontario government has indicated that it will help Toronto out of a massive budgetary shortfall once again this year, but it has at the same time not indicated how it will help the city make up hundreds of millions of dollars in lost revenue that will result from fee breaks it legislated for developers this week.
Speaking with reporters at city hall Wednesday afternoon, Mayor John Tory said the province has agreed to cover up to a third of the $703 million operating budget shortfall that remains this year as a result of the COVID-19 pandemic. The hole in this year’s budget had previously been pegged at $815 million, but a recent variance report shaved $112 million off that estimate.
Tory said the commitment from the province is “hundreds of millions of dollars more” than what he anticipated when he wrote to Premier Doug Ford and federal Finance Minister Chrystia Freeland several weeks ago to urge them to commit funding to help the city.
“This significant step forward, now puts into sharp focus the need to have the Government of Canada address its clear commitment to assist with what is an exclusively COVID-19 related shortfall being experienced in a more substantial way by Canada’s largest city,” Tory said.
Tory said a letter he received from Housing Minister Steve Clark also committed to “ensuring the City of Toronto is made whole when it comes to the impact” of Bill 23, which passed this week and eliminates or reduces some charges to developers which normally flow to municipalities.
Clark says the province is launching a third-party audit of municipal finances to determine if Toronto will see any shortfall in revenue as a result of the housing law.
“We’ve been clear that keeping the city whole means that making sure each dollar lost due to Bill 23 will still be there from the province, in this case dollar for dollar,” Tory said. “I’ve also made it clear that the current articulation of keeping us whole in the letter is not as clear and explicit as what I just said.”
A recent report by city staff estimated that the bill could cost Toronto some $230 million per year in lost development charges and warned that it could in fact slow down development by making it harder for the city to provide the infrastructure that supports development.
Tory said he looks forward to discussions with the province on “alternative revenue sources” for the city.
He pointed out that despite having downloaded responsibility for the maintenance of the Gardiner Expressway and Don Valley Parkway to the city years ago, the province has nonetheless blocked Toronto from implementing tolls on those roads to help pay for the upkeep.
“I’ll be pressing to get these discussions underway given the consequences of Bill 23 and given the very outdated and inadequate financing of cities generally, especially this one, the fourth largest city in all of North America, larger in size than most Canadian provinces.”
The mayor warned that if the province does not come up with ways to help municipalities make up the shortfall brought about by the legislated break for developers, “we will ramp up our campaign against this legislation.”
“The way I just put it in discussions in my office; I have put the weapons down, I have not put them away,” Tory said. “If we’re forced to absorb the cost of this provincially invented deal with developers and or cancelled desperately needed investment, we will make our voices heard in this matter in a way that is consistent with the size of this threat to the wellbeing of this city and frankly other cities across the province.”
While he said he is “100 per cent onside with the goal of building more homes,” Tory said it can’t be done without also supporting municipal infrastructure.