Impact of provincial cuts on the City of Toronto pegged at $177M in 2019: report
Published Thursday, May 9, 2019 10:10AM EDT Last Updated Thursday, May 9, 2019 7:10PM EDT
A series of provincial funding cuts could leave the city with a shortfall of more than $177 million in its already approved budget for 2019, according to Toronto’s top bureaucrat.
City Manager Chris Murray detailed the full impact of the cuts in a report released on Thursday morning.
He said that the combined impact of the funding cuts and program changes outlined in the provincial budget in April will reach $177.65 million this year alone “based on the best information available to date.”
Murray’s report reveals that the city will lose an estimated $24 million in 2019 as a result of the cancellation of an increase to the municipal share of gas tax revenue. He says that further funding cuts will also leave a $65 million shortfall in Toronto Public Health’s budget, an $84.8 million shortfall in the Children’s Services budget and a $3.85 million shortfall in the Toronto Paramedic Services budget. The reduction in funding to Toronto Paramedic Services is due to the scrapping of a planned cost of living increase for staff and had not previously been reported.
On childcare, Murray said that provincial funding is largely used to pay for subsidies that help pay or offset the cost of daycare for lower income families. He said that the funding changes to child services could therefore represent a loss of approximately 6,166 child care fee subsidies.
He said that the now cancelled increase in gas tax revenue, meanwhile, had been set aside for state of good repair work on the TTC. The total loss in revenue to the city over the next decade is projected at $1.1 billion, about $585 million of which had already been committed to the TTC’s state of good repair program in the most recent capital budget.
“This is very, very significant for a city that already finished its budget long ago, has set the tax rate for the year and was relying on these programs to help families and the economy,” Mayor John Tory told CP24 during an interview on Thursday morning. “You know, these programs that we are funding are programs that people need. Certainly nobody would argue that there isn’t a shortage of childcare in Toronto and certainly childcare subsidies for those who are struggling so to cut back on that is something that just doesn’t make sense.”
Many of the changes and funding cuts are being phased in over time, so the financial impact on the city will therefor rise.
For example, 75 per cent of Toronto Public Health’s budget is currently funded by the province with the remaining 25 per cent funded by the city. The changes proposed by the Ford government would see the province’s share be reduced to 60 per cent retroactive to April 1. It would then go down to 50 per cent in April, 2021.
The change, however, is not being imposed equally across the province.
The report points out that the province will still contribute 70 per cent of the budget of public health agencies serving fewer than a million people and 60 per cent of the budget of public health agencies servicing more than a million people, Toronto excluded.
“The province has not provided a clear rationale as to why the new provincial-municipal funding formula is different for Toronto in comparison to municipalities in the rest of the province,” the report notes.
Murray’s report pegs the impact of the cuts to Toronto Public Health’s budget at $65 million in 2019, $86 million in 2020, $102.2 million in 2021 and $107.6 million in 2022 and thereafter.
The report also reveals that the new provincial funding formula will also apply to programs that were paid for entirely by the Ministry of Health and Long-Term Care, such as Healthy Smiles Ontario, the Infectious Disease Control Initiative and programming related to the Smoke Free Ontario strategy.
In a statement issued after the report was released, Tory said that the cuts will “hurt residents, especially kids and families, and threaten Toronto’s prosperity.”
He added that while he remains open to sitting down with provincial leaders to discuss the changes, no such discussions have been agreed to.
“We have repeatedly offered to attend any such meeting which could have happened weeks or even months ago,” he said.