We knew the COVID-19 pandemic would have dire financial consequences, and now we’re seeing just how much it’s expected to hurt the City of Toronto.
A City staff report that will be considered by the Executive Committee next week projects a $1.35 billion shortfall in its operating budget this year with mitigation strategies like spending and workforce restraints.
Without those mitigation strategies in place, the loss would swell to $1.9 billion by the end of 2020.
“Mitigation strategies include $513.7 million in anticipated cost savings from a combination of workforce restraints, spending constraints and cost avoidance, including emergency layoffs, decreased TTC operating costs and matching service capacity to demand,” the city said in a release.
“An additional $34.1 million is also available from favourable budget variance within Municipal Land Transfer Tax revenues from January 1 to March 31, prior to COVID-19 impacts.”
The City adds that it is requesting relief funding from both the federal and provincial governments to offset the staggering losses.
If it does receive adequate funding from other levels of government, further mitigation options would need to be considered, the City said.
In April, Toronto reported that it was losing around $65 million a week due to the pandemic, with loss of TTC revenue a major factor as many avoid public transit due to virus fears.
At the same time, costs have risen due to COVID-19, as more money is spent on personal protective equipment, cleaning, additional shelter space and overtime for City staff.
“These unprecedented financial circumstances require unprecedented action from the federal and provincial governments,” Toronto Mayor John Tory said in a release. “We remain hopeful a federal-provincial funding agreement to support municipalities can be reached to avoid devastating cuts to frontline services or unaffordable property tax increases.
“The City staff report released today makes clear the stark reality we are facing and the measures we have taken to save what we can. I look forward to working with my council colleagues to review this report and to make it clear – as a strong and united council – that we need support from the other governments and we need it now.”