Toronto Mayor Olivia Chow accused the federal government of finger pointing on Monday, as Canada’s deputy prime minister placed the responsibility to help the city with its pandemic-ravaged finances on the province’s shoulders.
A two-page letter from Deputy Prime Minister Chrystia Freeland to Chow in response to Toronto’s request for additional help offered no new promise of federal funding on Monday. Freeland, who is also the federal finance minister, said the Ontario government has the constitutional responsibility and fiscal capacity to support Toronto.
“It is our firm expectation that they will do so,” Freeland wrote to Chow.
The letter is the latest development in an ongoing saga between the different levels of government over how to tackle Toronto’s pandemic-related budget shortfall.
Chow wrote in a statement Monday that the province had signalled its willingness to partner with the city.
“I remain hopeful that the federal government will join us as well, despite today’s finger-pointing,” she said.
Chow inherited a nearly $1-billion budget shortfall, in large part tied to decreased transit revenues and increased shelter costs. Without more help, city staff have estimated next year’s budget shortfall could be up to $927 million.
Staff reports indicate Toronto could plug the hole in this year’s budget through a COVID-19 backstop fund, drawn from its already depleted capital budget.
Freeland’s letter noted the federal government’s ability to provide support had limits. She credited Ontario’s “excellent fiscal position” to the federal government’s emergency pandemic support.
“Mayor Chow, our government has been _ and will continue to be _ a committed partner for the City of Toronto,” Freeland wrote in the letter.
“However, the ability of our federal government is not infinite _ and the emergency support we provided during the pandemic led directly to the excellent fiscal position that the Province of Ontario currently enjoys.”
The Financial Accountability Office of Ontario has projected a provincial budget surplus of $10.6 billion by the 2025-2026 fiscal year, more than the government-forecasted $4.4-billion surplus.
In response to the letter, Premier Doug Ford’s office deflected back to the federal government. A statement from a spokesperson in his office did not mention new support for Toronto’s budget shortfall, saying the city’s request for additional funding was directed at the federal government.
“We hope the federal government and Toronto can work together to find a solution,” the statement read.
Chow officially took office earlier this month, coming off a byelection campaign where she pledged to work with other major cities to get a new fiscal deal for municipalities.
Officials have long said Canada’s most populous city deserves unique financial consideration given the outsized role it plays in regional services from transit to shelter and housing supports.
Chow welcomed the federal government’s commitment last week to provide $97 million to help shelter asylum claimants in Toronto, but said it was not enough to meet the city’s needs given an increase in claimants and an already over-stretched shelter system.
She teamed up with Ford and issued a call for the federal government to add another $26.7 million to the program offering rental housing stipends.