Cities will not be able to dodge the virus bill

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Mayor John Tory, seen here at a press conference on February 29, 2020, says Toronto is in desperate need of help to recover from the COVID-19 crisis.

Cole Burston / The Canadian Press

Everyone gets a bailout these days: workers, students, farmers, small businesses, large businesses. Canada’s largest and wealthiest city hopes to join them.

Mayor John Tory says Toronto is in desperate need of help to recover from the COVID-19 crisis. It took a hit that amounts to $ 65 million a week. To fill the $ 1.5 billion hole in its annual budget, Tory says, Toronto should either raise taxes by 30% or cut services with a meat grinder. Neither option is possible if Canada wants “a strong city-led recovery.”

The execution of a budget deficit is also over. Cities are not allowed to do this and Mr. Tory does not want to ask for special permission because the deficits would just push the box. He would therefore like the provincial and federal governments to come to the rescue. For weeks, he and other mayors across the country have been pleading with senior governments to help them.

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Cities cannot be expected to cover the cost of the problems they find themselves in. It was not their fault that the biggest economic shock in memory cut them off from the wind. It’s not like they mismanaged their money and wasted all their money. It just happened. The higher authorities have an obligation to help. With their much larger vaults and much greater borrowing capacity, it is incumbent upon them to bear most of the cost.

He is right on one point. Toronto is in a real situation. The pandemic has beset the city with all kinds of additional costs. He spends more on everything, from overtime to public health, to housing for the homeless. At the same time, revenues from things like public transit fares, parking fees, and taxes on land transfers are far from being achieved. With passenger numbers reaching about 15% of pre-crisis volumes, the Toronto Transit Commission is losing $ 20 million a week in fares.

Emergency aid is clearly needed. Senior governments seem to understand this. At first, Ottawa wondered why the provincial authorities, normally so anxious to remove the authorities from their territory, would come to ask for help from the cities, which are under their control. The provinces wondered why Ottawa was not interested. This round of budget closure seems to be over. The two levels make encouraging noises.

But all levels have essentially the same problem: the costs of hot air ballooning, the crash of revenues. Ottawa’s budget watchdog warns that its latest forecast of the federal deficit – barely $ 252 billion – may turn out to be “very optimistic” given the money the officials were spending. Ontario’s watchdog says the province’s deficit could double to $ 41 billion, which will add to an already huge provincial debt.

Someone will need to retrieve the tab. The idea that senior governments have some kind of magic credit card is a comforting fantasy. Even they will face a bill for all of their expenses, as necessary as most of them. Cities will also not be exempt. Even if they get their emergency funds, the transfers they get from above are bound to diminish as higher governments wrestle with their debts.

As at all levels, cities will either have to cut spending or raise taxes. Toronto may have to abandon some of its favorite projects, such as a downtown park project spanning the railways. This could see the huge public transit construction promised by Prime Minister Doug Ford reduced.

Whichever path it chooses, it is unrealistic to think that cities will be spared the budgetary impact of this unprecedented crisis. Even if other governments were to cover all of Toronto’s current needs – which seems unlikely, given all the demands placed on their treasures – residents would end up paying higher provincial and federal taxes or lower levels of service. these governments.

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As the saying goes, we are all in the same boat. Like another one, there is only one taxpayer. Like it or not, we will all pay.

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