Toronto Star Referrer

Deputy mayor warns of TTC cutbacks

Bailout needed to avoid more service reductions, feds told

DAVID RIDER

Toronto’s deputy mayor is raising the spectre of further TTC service cuts unless Prime Minister Justin Trudeau’s government helps repair the city’s pandemic-ravaged finances.

Coun. Jennifer McKelvie, acting as head of city council until a new mayor is elected to replace John Tory, repeatedly raised the troubling possibility while speaking to reporters before Wednesday’s council meeting.

If the federal government does not come through with an emergency bailout, the city will have to raid rainy-day reserves to keep capital projects and service levels on track for 2023, but it will be in grave trouble for 2024, McKelvie said.

She said delaying capital projects, such as road and community centre repairs, would be the first impacts, but city council would then have to look at a transit service whose ridership remains at about 70 per cent of pre-pandemic levels.

“We are running more service right now than we have ridership. That is the last place that I’d ever like to see a cut,” she said, noting the TTC is “being almost entirely funded by the fare box,” and the gap between revenues and costs is unsustainable.

Toronto’s 2023 budget, which passed last month amid the funding crunch, raises fares for most passengers while making riders wait longer for vehicles that are often more crowded as a result.

The federal 2023 budget unveiled Tuesday had none of the $235 million that Toronto requested from Ottawa toward last year’s budget shortfall, nor any of the $933 million being sought from the federal and provincial governments to fill this year’s anticipated gap.

As this week’s three-day city council meeting kicked off Wednesday, a lot of the attention and action was focused on what wasn’t there.

There was no mayor, for starters, thanks to John Tory’s sudden resignation last month. Three wannabe mayors who are planning to run were there, lined up next to each other, seated across the centre of the council floor, where each took opportunities to posture for the top job (two other likely candidates watched from the gallery). A good chunk of the meeting’s energy came from a quickly passed item officially declaring that highest office vacant and confirming the launch and timing of the byelection campaign.

But there was another massive absence that set the theme of the council meeting too, one that will hover over the mayoral campaign when it kicks off in earnest on Monday. It’s something that has clarified just how unappetizing a crap sandwich that job of mayor of Toronto has become: the absence of money available from other levels of government.

There was much to chew on in Justin Trudeau’s budget on Tuesday, but at city hall it was received like a swift kick in the crotch. Not only was the city banking on ninedigit support from the feds to keep the already-passed 2023 budget balanced, but it is preparing to close the books on the already-spent 2022 budget where it was also still counting on a similar number of dollars. As Deputy Mayor Jennifer McKelvie said before the council meeting began — I’m paraphrasing — this opens the city’s government and residents to a potential world of hurt. Especially since the provincial budget unveiled last week also leaves the city high and dry on the same type of anticipated support for 2023.

This was additional context for McKelvie’s key agenda item — a report on the financial outlook for the city that notes a $46.5-billion gap over the next 10 years. It also notes that if you apply the provisional reserves the city has set aside in case the province and feds don’t provide the COVID-19 bailout — which their recent budgets show they are not — the city is down to only $290 million total in emergency reserve dollars available. That’s very close to disaster territory.

A little less than a decade ago, when the city was going through one of its periodic moments of civic swagger, a popular T-shirt read “Toronto vs. Everybody.” Right now, it certainly feels like an accurate slogan, and a dynamic the next mayor is going to have to deal with.

Though the premier and the federal finance minister live in Toronto, they can count on their governments’ constituencies across the rest of the province and the country to overwhelmingly hate Toronto and cheer on anything that will cause whining at Bay and Queen. Those detractors can, with some justification, point out that Toronto has not always maximized its own revenue potential (through sources like property taxes), and has not always been parsimonious in its spending choices (on things like the Gardiner rebuild).

But come on: the city operates the

TTC with a lack of funding from upper levels of government that is an international joke and source of shame; it shoulders huge and disproportionate costs related to federal immigration and refugee policy; it pays $1.1 billion per year (according to that report at the council meeting) on “extensions of federal and provincial responsibilities, such as housing, social services and health services.” It’s the only city of its size in Canada and the U.S. that doesn’t have the ability to implement things like city sales taxes or municipal income taxes (Chicago and New York, for instance, each have both and Los Angeles has a municipal sales tax).

Toronto is tasked with a lot of responsibility, and has limited revenue authority to meet it. And now, after the pandemic budget crisis, evermore limited direct help meeting it, too.

The reliability of funding from other governments is kind of a core issue, even beyond COVID shortfalls. Transit construction and affordable housing are the two issues

that have dominated city debates in recent years, and the province is paying for almost all of the former and federal commitments are slated to pay for most of the latter. If each new budget season (or change of government) might change the math of the city’s dependency, it leaves Toronto in a constant state of instability.

Federal Finance Minister Chrystia Freeland and Trudeau really have stuck a shiv in the city’s government regarding the 2022 budget — McKelvie insists the Liberals had promised that support specifically in their last election campaign, and with the books for last year closing, the city’s reserves are going to be drawn down to cover that broken promise.

When it comes to 2023 and beyond, part of me suspects that both Premier Doug Ford and Freeland are waiting for the new mayor to be elected, so they can either ride in with dollars to show their productive partnership with the new person and allow that new person to portray it as a sign of their get-’erdone

powers. Or they can shortchange the new mayor as proof Toronto has made a terrible choice. This is all politics, so you have to consider that political considerations are often at work.

But it’s also possible the city is just being left high and dry no matter what happens in the election. Which, whether anyone likes it or not, is kind of a big election issue.

The candidates for mayor don’t just have to answer how they are going to close the immediate budget gaps and suggest a new longterm funding solution. They also have to figure out how to “manage up” with other orders of government. There are a lot of potential ways to stabilize the city’s finances, but most of those ways I can see depend on the co-operation — or at least acquiescence — of federal and/or provincial officials. It’s not obvious how to approach that challenge.

Which is why, maybe, it’ll be interesting to hear the approaches from those who want the job.

There was much to chew on in Justin Trudeau’s budget on Tuesday, but at city hall it was received like a swift kick in the crotch

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2023-03-30T07:00:00.0000000Z

2023-03-30T07:00:00.0000000Z

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