Toronto would need 47% property tax increase to maintain services if $1.5B budget gap isn't filled: mayor

WATCH: The City of Toronto is facing a $1.5 billion shortfall amid the COVID-19 pandemic and the mayor is appealing to higher levels of government for support. As Erica Vella reports, if that support doesn’t come, the residents could be faced with a 47 per cent hike in property taxes or significant cuts to city services.

Toronto Mayor John Tory has made another dire plea for financial support from the upper levels of government, warning if the City doesn’t receive help filling a minimum $1.5-billion budget hole major cuts or property tax increases will be needed.

“Without immediate support, our city – like many other cities across Canada – is facing unprecedented cuts that will hurt the city and every person and business that the federal and provincial governments have spent billions trying to help in the wake of COVID-19,” he told reporters Friday afternoon.

“As the year goes on, we also have to plan for what would happen if that support doesn’t come and due to the magnitude of the problem almost every service would suffer.”

READ MORE:
Coronavirus could cost City of Toronto at least $1.5B, mayor says

Tory said under the law and in comparison to the provincial and federal governments, the municipality is limited in taxation powers and it cannot run deficits.

“We cannot slash services right now nor can we massively raise taxes mid-year to help cover these costs,” he said, noting a massive property tax increase would be “unacceptable.”

“It would take a 47 per cent hike in property taxes to raise $1.5 billion – that is just not practical or fair to taxpayers.”

In the absence of a massive property tax hike, an increase in other revenues or receiving financial assistance, Tory highlighted potential cuts needed to balance the 2020 budget:

– $575 million in cuts to the TTC (subway service on Lines 1 and 2 cut in half, Lines 3 and 4 temporarily shut down, 10-to-20 minute TTC streetcar service on major corridors, four million less Wheel-Trans rides)
– $451 million elimination in capital projects (roads, transit, infrastructure projects)
– $101.5 million reduction to the budget for shelters
– $23 million reduction to Toronto Fire Services
– $31.3 million less for Toronto police (approximately 500 officer positions eliminated)
– Close to $40 million less for child-care subsidies (more than 40,000 child-care spots eliminated)
– $12 million loss in long-term care beds (1,320 beds eliminated)
– $40.8 million in recreation services reductions (61 community centres closed, 50 per cent reduction in services)
– Closure of an unspecified number of library branches

In total, he said more than 19,000 municipal workers would be out of a job.

For weeks, Tory has called for help from the other levels of government.

He said the pandemic has cost the City of Toronto approximately $65 million a week since full public health measures were enacted, noting a large portion of that weekly figure comes from lost TTC ridership revenue and that alone is around $20 million a week.

“Even with prudent, sensible steps to reduce costs that don’t reduce services, we would still need support from the other governments,” Tory said.

READ MORE:
Ontario municipalities worry about going in the red due to COVID-19

“We would be left with a city that can’t work and is unable to keep helping the people who need it most.”

When asked about the time needed to minimize the cuts needed, Tory said the longer the wait the more drastic the cuts will need to be.

“The days of reckoning are approaching,” he said.

When asked about Tory’s call for funding, a spokesperson for Ontario’s municipal affairs minister acknowledged that “municipal revenues are impacted by the current situation” and echoed the plea for federal money. Under the law, municipalities are creations of the provinces.

READ MORE: Rec centres, ice rinks could be first victims of budget cuts as cities forced to balance books

“Given the national scale and magnitude of the shortfalls facing Canadian municipalities, it is imperative that the federal government join us in developing a plan to help our municipalities recover from the impacts of COVID-19,” Julie O’Driscoll wrote in a statement Friday evening.

She said the Ontario government and the Association of Municipalities of Ontario are tracking the loss of revenues.

A spokesperson for Deputy Prime Minister Chrystia Freeland said the federal government was “committed” to working with municipalities during the pandemic, adding Freeland and Prime Minister Justin Trudeau have expressed an “eagerness to hear from the provinces and territories on ways we can help municipalities.”

“The prime minister, deputy prime minister, and the minister of infrastructure and communities also remain in close contact with mayors from across Canada, including through the Federation of Canadian Municipalities. This very much includes Mayor Tory,” Katherine Cuplinskas said in a statement Friday evening.

However, as of Friday, there weren’t definitive commitments by the federal and Ontario governments to provide funding to Toronto or other Ontario municipalities.

© 2020 Global News, a division of Corus Entertainment Inc.

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