Ontario cities and towns need money urgently

Ontario’s towns and cities are issuing an urgent warning this week: Large property tax hikes, layoffs, cuts to human services and programs are all looming unless senior governments come up with money to help municipalities left financially crippled by the pandemic.

To a point, this is a tactic, admittedly. The Large Urban Mayors’ Caucus of Ontario (LUMCO), along with municipal leaders from across Canada, have been lobbying and working hard to get Queen’s Park and Ottawa to make some commitments, before those dire consequences come home to roost.

Guelph’s Mayor Cam Guthrie, who chairs the LUMCO caucus, says for the past several months municipalities across Canada have been asking for $10 billion in emergency funding. About $4 billion of that would go to Ontario towns and cities. But first, the province and the feds have to agree, and that has not happened yet.

It’s not entirely surprising. Any time you deal with matters of federal-provincial jurisdiction, the process is thorny and time consuming. But it’s more than fair for municipalities to point out the time for negotiating needs to be past, and action is needed now.

Municipalities are halfway through their budget years, which means they now have to plan for next year. Almost without exception, they are facing massive funding shortfalls. In Toronto, for example, the gap between revenue and the budget is $1.5 billion. Mayor John Tory says his city is losing $65 million every week and would need to increase property taxes 56 per cent to eliminate that gap. The situation in Waterloo Region, Hamilton, Niagara and Peterborough is, to one degree or another, as serious.

The choices, for municipalities, are stark. They are not permitted to run deficits (there are some exceptions such as British Columbia where deficits will be allowed to deal with the pandemic crisis). They can dramatically increase property taxes, their main form of revenue. If they do that at the same time as the pandemic is still hurting millions of taxpayers and businesses, the results could be catastrophic. They can lay off or otherwise cut staff. Does anyone really want to see more unemployment, especially among front line staff like firefighters, paramedics, public health workers and sanitation workers? Isn’t that exactly what senior governments want to avoid in order not to jeopardize recovery? Or they can cut services — close libraries, fire stations, community and rec centres and all the programming that goes along with those facilities.

These are not appealing options. The province and Ottawa must understand this. As Guelph’s Guthrie said: “Cuts and property tax increases will hurt the very same people that the federal and provincial governments have spent billions on trying to help during this pandemic.”

Cities and towns have nearly all the responsibility for front-line service delivery, but nearly none of the authority compared to senior governments, and nearly none of the revenue generation tools.

LUMCO estimates that Ontario’s biggest cities are bleeding red ink at a rate of $100 million every week. Nationwide, that figure could reach $15 billion.

Although both senior governments have to help here, the bottom line is that only Ottawa can honestly afford it. The looming federal deficit — which could be as high as $250 billion — is already a significant challenge, but that doesn’t get the federal government off the hook. It is going to have to pony up for municipalities, and the province needs to be a willing partner.

The time for talking, lobbying and posturing is up. Ontario’s towns and cities need help now.