Toronto Deputy Mayor Jennifer McKelvie is warning that significant cuts to services and state-of-good repair work could be necessary as soon as next year, following the federal government’s refusal to set aside any money in its budget to help cover the city’s COVID-19 shortfall.

McKelvie made the comment to reporters at city hall on Wednesday morning, one day after the Liberal government’s budget failed to include $235 million in requested funding to offset 2022 COVID-19 shortfalls, as well as a commitment for hundreds of million more to help the city tackle a $933 million shortfall in its 2023 budget due to ongoing COVID-19 costs.

“[This] is a budget is very focused on growth. And I understand that we want our country to grow. The problem is Toronto is still very much in the mode of recovery and we need help with recovery,” she said in a press conference on Wednesday morning. Former mayor John Tory's office was later declared vacant on Wednesday afternoon.

“We still have costs from homelessness we still have costs from decreased ridership on the TTC. And so while the federal government wants to focus on growth, they can't leave municipalities that are very much in the state of recovery behind.”

The federal government provided the city with funding to offset its COVID-19 losses in both 2020 and 2021 but did not do so last year.

The lack of federal budgetary support for Toronto follows a period of lengthy unrest in the city. This weekend, a 16-year-old was stabbed to death at Keele Station, the latest in a string of violent incidents on the TTC. Homelessness and mental illness have also reached a critical level in the city, which many believe are the root causes of increased violence throughout the city.

McKelvie has promised cuts to Toronto services if other levels of government don’t come through with budgetary support.

“You’re going to see those cuts rapidly happen in 2024,” she said. “If we don’t get assistance, we are able to use the reserves we’ve squirreled away to pay for this year. But it’s not a good strategy…it’s like taking out your RRSPs to pay your mortgage, or to pay your groceries. It’s not sustainable.”

McKelvie suggested budget shortfalls might continue to be addressed through hiked property taxes.

“It’s going to be a big awakening for Toronto residents to see that in their tax bill when it arrives,” she said. “I’m really, really hopeful we can get this conversation going with the federal government so we can help the people of Toronto.”

“Toronto deserves better. We need to have an important conversation about how to help the country’s largest economic engine…Toronto needs to be successful so our country is successful.”

City council will consider a report from Ernst & Young this week which shows that the city could be facing $46.5 billion in fiscal pressures over the next decade. That report did not take possible COVID-19 shortfalls into account.  

City councillor Stephen Holyday (Ward 2 – Etobicoke) said on Wednesday morning that “now’s the time to hit the panic button.”

“There is no better time than right now. This council needs to take action to pay for…services over the next 10 years.”

Holyday spoke on what he perceives to be missteps from city council, which have led to this “unsustainable position.”

“The council has always opted for the gold standard service level, especially on social services that are arguably the responsibility of other orders of government. Now the bill has come and it’s very difficult to turn to property taxpayers and expect them to cover income transfer tools…we need to hold other orders of government accountable for the delivery of social services if we pay for it.”

Holyday, who has said he’s considering running for mayor, said he “won’t be supporting collecting even more taxes.” He doesn’t feel further increases to property taxes are the answer to the expected city deficit, in opposition to former mayor John Tory’s February idea to add tax to commercial parking spaces.

“I think we have to look back at what it is we do as a city…and what things ought to be covered by other orders of government who can rely on income tax to pay for social services and housing.”