City of Toronto releases update on financial impacts of COVID-19
TORONTO, ON., July 16, 2020 — On Tuesday, the City of Toronto disclosed that they are anticipating a financial impact of $1.9 billion by the end of 2020, prior to any offsets through mitigation strategies, including spending and workforce restraints. With these mitigation strategies in place, the City projects a reduced total year-end shortfall of $1.35 billion.
Mayor John Tory and Budget Chief Gary Crawford addressed the report on Tuesday morning, highlighting the $513.7 million in mitigation strategies the City is undertaking and stressing the need for emergency financial support for Toronto and other municipalities from the federal and provincial governments.
“Municipalities are on the frontlines responding to the COVID-19 pandemic and have been since the beginning, just as we will be on the front lines of the recovery,” said Mayor John Tory. “But the fact remains that, while cities continue to respond to the pandemic, they are experiencing unprecedented costs and significant revenue losses.
“These unprecedented financial circumstances require unprecedented action from the federal and provincial governments,” said Tory. “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,” Tory continued. “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.”
Since the pandemic began in mid-March, the City of Toronto, consistent with other large Canadian municipalities and municipalities across the GTHA, has been experiencing significant financial impacts in the form of both added costs and revenue losses as a direct result of COVID-19.
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. 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.
Led by the Mayor, the City is engaging other orders of government and requesting relief funding from the federal and provincial governments to offset the cumulative financial impact to City expenditures and revenues. The City Manager will be reporting to Council later this month and again in September on further mitigation options that would need to be considered if municipalities do not receive adequate financial support from other levels of government.
In April, the City announced that it is experiencing financial pressure estimated at $65 million per week due to the pandemic. The pressure is driven by decreased TTC and other revenues, coupled with increased costs. Revenues are decreased due to closures, decreased transit ridership and decreased demands for other City services, and increased costs are stemming from COVID-19 related needs, like additional personal protective equipment supplies, cleaning, additional shelter space, and overtime.
More information about the City’s response to COVID-19 is available at toronto.ca/covid-19.
