Cities being hung out to dry on COVID-19 funding

What's the holdup? The issue has become “a jurisdictional hot potato" says the union representing Canada's municipal employees

While most sectors of the economy have seen large cash infusions from both the federal and provincial levels of government to help blunt the economic hit from COVID-19, municipalities have been left out of the financial relief.

The Canadian Union of Public Employees, which represents some 80,000 municipal employees in Ontario, the Federation of Canadian Municipalities and the Association of Municipalities of Ontario (AMO), which advocates for the province’s 440 municipal councils, have made repeated calls for emergency funding for cities, warning of deep cuts if cash doesn’t flow soon.

But so far, silence from higher orders of government. What’s the holdup?

CUPE National spokesperson Hugh Pouliot says the issue has become “a jurisdictional hot potato, with the feds pointing to provincial governments and the provinces looking to the federal government for leadership.”

In the meantime, he says, “cities are caught in the middle and being hung out to dry. Everyone needs to get to the table and get it done.”

NDP municipal affairs critic Jeff Burch tabled a motion in the House on Tuesday, May 27, calling for emergency financial support for municipalities. He says cities and towns across the province already burdened by COVID-19 costs are on the verge of having to make “devastating” cuts to public health, transit, child care and social services.

The motion urges the government of Ontario to work with the federal government to not only help with immediate funding but to “address systemic financial challenges facing Ontario’s municipalities that have been exacerbated by the COVID-19 emergency.” The NDP is hoping to force a vote on the issue.

That can’t come too soon for Toronto, which is absorbing large scale financial losses of some $65 million a week since the COVID-19 emergency was declared back in March. About a third of that is attributable to the pressure put on transit by COVID-19 physical distancing requirements.

Mayor John Tory has made his frustration with the lack of help from higher orders of government well known. At a media briefing on Friday, May 22, he repeated his call for immediate financial assistance to avoid “devastating” cuts to public services. Those would include a 50 per cent reduction in transit, shelter and recreational services, as well as reducing long-term care beds and the elimination of more than 40,600 childcare spaces.

The mayor says the city is facing a $1.5 to $2.8 billion shortfall this year attributable to  COVID-19 and the loss of revenue from the massive drop in TTC ridership. According to number-crunching by city staff, it would take a 47 per cent property tax increase to recover those costs.

Tory says he has been in talks with provincial and federal counterparts, but that no firm commitments have been made. Without it, Tory says that more than 19,000 city jobs would be at risk.

“This jeopardizes all cities’ ability to continue to respond to the COVID-19 emergency and to help form a solid and stable foundation for the local economic restart and recovery.”

Ontario’s minister of municipal affairs Steve Clark has punted requests for financial assistance to the feds, saying only in a statement released last week that the province will support AMO’s request with the federal government.

CUPE Ontario and AMO, meanwhile, took the unusual step last week of joining forces to issue a joint appeal for more funding for municipal governments, detailing in an open letter released May 20 that allowing municipalities to accumulate debt (which they are currently not allowed to do by law) is no solution to the current financial crisis.

Besides immediate relief, the letter is also urging the establishment of a new cost-sharing agreement between the province and municipalities on public health, ambulance services and public transit. And calling on the province of Ontario to give all municipalities the taxing powers given to Toronto under the City of Toronto Act.


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