Feds don't have 'infinite' money to spend on Toronto, Freeland tells Chow

Federal Finance Minister Chrystia Freeland says the Government of Canada is already spending plenty of money on the City of Toronto and won’t be coming to the table with additional funds to address the city’s fiscal crisis.

In a letter to Mayor Olivia Chow, Freeland said the federal government will continue to be “a committed partner for the City of Toronto” but added that “the ability of the federal government to spend is not infinite.”

The letter comes in response to Chow’s request for the federal government to boost funding for the city.

Chow, who was just elected mayor weeks ago in special byelection, inherited a city facing difficult financial circumstances.

Toronto is in a financial crunch, with around a $1 billion shortfall left over by the pandemic. The city had hoped that the higher levels of government would continue to provide aid to make up the shortfall, but the federal government has indicated that no further funds will be coming for that purpose.

The city has also petitioned the federal government recently to spend more to take care of refugees and asylum seekers who have been turning to the municipal shelter system.

Immigration, including refugees and asylum-seekers, is an area of federal responsibility. The federal government finally agreed to put up the roughly $100 million that the city was asking for when the issue came to a head in recent weeks, with scores of people sleeping on the street outside of a shelter intake centre downtown.

Toronto’s many Liberal MPs, of which Freehand is the highest ranking, had mostly been silent on the issue as the feds faced criticism.

In her letter, Freeland pointed to reserve funds at the city and the province as an option and pointed out that cities are an area of provincial responsibility under the constitution.

The city recently sliced around $300 million in capital funding from its budget in order to cope with the financial crunch, but further cuts are expected if more money cannot be found.

Like most candidates in the recent election, Chow campaigned on a promise to get a new deal for Toronto with the federal and provincial governments, one that would see cities get regular funding instead of piecemeal grants for various programs on a year to year basis.