Eliminating city-run childcare and cancelling funding subsidies are among a fresh wave of cost-saving measures a consulting firm had suggested to the City of Toronto.

The consulting firm also suggests merging Toronto's Emergency Medical Services and Fire Rescue and Response services under one roof would save money spent on emergency resources.

The options were among a number of contentious recommendations consulting firm KPMG LLP released Wednesday, as part of a massive core service review focused on scaling back city spending.

City council called for the full service review in April, asking KPMG to recommend ways to bring spending in line with the city budget. Toronto faces a $774-million shortfall in 2012.

According to the report, the city would be best served by eliminating subsidies for 2,000 childcare spaces that no longer receive provincial support. It is also recommended that city-run childcare be converted to private companies.

KPMG also recommends transferring most city-run long-term care homes to non-profit groups or selling them to the private sector.

Coun. Giorgio Mammoliti, who was named to the head of a task force to restructure childcare on Tuesday, said they would look at every suggestion before making a decision.

"We are now going to look at (the report), we are going to review it, take what we think can work and not only save money but also create a better service for less money."

Mammoliti says anyone who currently has a child in the daycare system has nothing to worry about because the province doles out most of the money and makes available most of the spaces available.

"Nobody is cutting your child out of daycare. That is not going to happen. If we get into this debate it will be whether or not Toronto should be running programs."

Wednesday's recommendations targeted ways to streamline Toronto's Community Development and Recreation department. KPMG released audits on Toronto's Public Works and Infrastructure committee and the Economic Development committee earlier in the week.

The city earmarked $3 million for the consultants to review Toronto's services, a move some councillors are calling wasteful.

Once the full report has been reviewed, councillors will discuss which recommendations to approve in September.

While the core service review does not provide dollar estimates for their recommendations, it does mark each with a potential savings rating of low, medium or high.

An audit of Toronto's Public Works and Infrastructure committee released on Monday suggested:

  • sending more trash to landfills to cut down on costly recycling
  • further privatizing garbage collection
  • cutting down on how often streets are cleaned and snow is plowed
  • eliminating fluoridation of Toronto's water supply.

A Tuesday report recommended reducing or eliminating funding to cultural services that report to the Economic Development committee.