PM advances $2.2 billion in funding to help cash-strapped municipalities
Big city mayors says earmarked money helps but much more still needed
OTTAWA — Prime Minister Justin Trudeau announced support for cash-strapped cities across the country Monday, but his offer falls well short of their demands as they face the prospect of having to hike taxes or cut jobs.
Trudeau announced an advance of $2.2 billion in federal gas tax funding, money cities would have received later this year regardless.
“We know this is just an additional measure that brings forward money municipalities were going to get six months from now anyways, but there is a need right now,” he said at his daily press conference outside Rideau Cottage.
Cities have also lost out on event permits, parking fees and transit fares, even as costs have risen to help them respond to COVID-19.
Many cities have also extended deadlines for property tax payments to help struggling small businesses.
Because cities are not allowed to go into debt, they have been forced to implement layoffs and cut transit services to keep financially viable.
The City of Toronto has said it is losing nearly $20 million per week in fare revenue from public transit.
Edmonton and Calgary have both done large layoffs, and cities across the country have reduced their transit service to less frequent schedules to adjust to the massive drop in ridership. Ordinarily, the gas-tax payments are made in two transfers, one in the summer and the other later in the year. Both payments will be made this month.
The Federation of Canadian Municipalities called for $10 billion in support to avoid cities having to make more drastic cuts. The group’s president, Bill Karsten, said the money was a step, but it falls well short of their needs.
“This modest, preliminary measure may help some municipalities with immediate liquidity issues. But to be clear: this is not new money,” he said. “This money has already been accounted for in municipal budgets and does not address our crisis of non-recoverable losses, or the stark choices cities and communities now face.”
Trudeau said he is aware of the situation cities are facing and more support is coming, but his government has to work with provincial governments to handle the changes.
“There is a range of services offered by cities that are in danger of disappearing. That is why we are doing what we can unilaterally, advancing the money forward,” he said. “We respect the Constitution that says it is to the provinces to manage and fund municipalities, but at the same time we have looked for ways to make direct contributions.”
Ontario Premier Doug Ford said the money was welcome but inadequate.
“That money is already in the budget of these municipalities,” he said.
Ford said his government is prepared to work with the federal government, but it needs the federal government’s deeper pockets.
“I have committed to come to the table and help these municipalities and we will, but we need the federal government.”
He also pointed out Ontario pays $13 billion more in federal taxes than it receives back in services.
Toronto Mayor John Tory said he was pleased the prime minister was describing this as only a first step, because it is inadequate.
He said his city could be out more than $1.5 billion before the year is out and will receive $166 million in funding by June 10.
“It is always good to get money in the bank sooner rather than later, but we need much more help,” he said.
Tory said Toronto and other big cities will drive the country’s economy out of the pandemic and they need help to be ready for that.
“Toronto, the economic engine of Canada, is ready to do everything it can to get our economy back on track, but we can only do that with the support of the federal and provincial counterparts,” he said.
“If we want to have an effective recovery in this country, if we want to have a robust recovery then it has to start in the cities.”