Ontario budget 2023: Toronto receives some requested funding, further details sought

As City of Toronto officials appeal for a financial lifeline to deal with lingering COVID-19-related budget impacts and mounting needs to deal with social supports, the Ontario budget fulfilled some of what was requested.

However, they said they’re awaiting further information from the provincial government on other requests.

“The City has found $2.5 billion in offsets, savings and efficiencies during the pandemic – including $786 million this year. That work will continue. However, our ongoing financial challenges demonstrate that we need a new fiscal framework for Toronto,” Toronto deputy mayor Jennifer McKelvie said in a statement Thursday afternoon.

McKelvie wrote a letter to Ontario Finance Minister Peter Bethlenfalvy and federal Finance Minister Chrystia Freeland at the beginning of March to ask for funding for various programs. City officials said they’re still grappling with more than $1 billion in shortfalls, particularly when it comes to transit and other needs.

In the letter to Bethlenfalvy, she praised financial support given by the Ford government in 2022 to help deal with pandemic-related shortfalls but said the City of Toronto needs more. McKelvie pointed to a $48-million ask in order to provide “wrap-around” services for vulnerable residents in new housing units as well as more housing and filling funding gaps created by Bill 23 (which cut revenue the City received as part of new housing development applications).

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“We expect the province to honour its commitment to keep the City whole when it comes to development charges and ensuring growth continues to pay for growth,” she wrote.

There was nothing in Thursday’s budget outlining in detail how that would happen, but Bethlenfalvy said talks are ongoing and provincial government officials worked to respond to requests from municipalities.

“We need, of course, the municipalities to do their part right across the province, so we’ll work with the cities on their financial challenges, and of course, we’ll continue that dialogue,” he told reporters.

There was discussion by provincial officials about conducting audits for certain municipalities to get a better picture of local reserves and budgets.

The province’s 2023 financial blueprint contained an additional $202 million in annual funding for homeless prevention and supportive housing programs where people experiencing homelessness are connected with services like job training in addition to a roof over their heads. Officials said it’s anticipated a large amount would go to Toronto.

“These investments result in significant cost savings for the provincial government by reducing pressure on emergency shelters, hospitals, prisons, and long-term care homes,” McKelvie said.

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The Ontario government also announced an additional $425 million into mental health services over three years. Officials said the investments would provide a five-per-cent increase in base funding for community-based mental health and addiction services, such as support for youth suffering from eating disorders.

The federal government is set to table its 2023-2024 budget on Tuesday. It’s unclear how the Trudeau government will respond to the requests put forward by the City of Toronto.

Meanwhile, Ontario’s official opposition panned the $204-billion budget Thursday afternoon. Ontario NDP Leader Marit Stiles and finance critic Catherine Fife said the plan doesn’t “meet the moment” the province is in.

“People today are feeling squeezed with the rising cost of living, and this government and this budget has nothing meaningful to offer relief,” Stiles said.

“I’ve never seen a government so gleefully celebrating mediocrity,” Fife added.

With files from The Canadian Press