In 2022, the City continued to experience significant financial impacts (lost revenue and added costs) as a result of the COVID-19 pandemic. The 2022 Operating Budget was balanced with the expectation of continued COVID-19 funding support ($1.4 billion) from the Federal and Provincial governments. If continued intergovernmental funding support is not provided, the City will have to address the shortfall by utilizing the City’s COVID-19 backstop strategy and through a reduction to the 2022 Capital Budget while ensuring the 2022 Operating Budget remains balanced. The City was required to establish a backstop as part of the 2022 budget process, which reflects a contingency plan of required capital budget reductions and paused capital funding that would have otherwise supported the City’s growing infrastructure investment requirements.

Current Status

The estimated funding support received in 2022 from the Federal and Provincial governments is $554 million, with a remaining COVID-19 related funding gap of $846 million. This gap decreases to $815 million if the City receives the full reimbursement of public health costs. In the event that continued COVID-19 funding is not provided by other orders of government, the City’s capital program will be materially impacted. It is expected that a draw of up to $515 million from the City’s limited COVID-19 backstop will be required and steps have already been taken to initiate a $300 million reduction to the 2022 Capital Budget.

Table 1: 2022 Anticipated COVID-19 Financial Impacts

Description $Millions 2022 Budget Estimated Federal and Provincial Funding Remaining 2022 Shortfall
COVID-19 Impacts
Transit* 561 438 123
Shelters 288 87 201
Other Municipal Pressures 491 491
Public Health 60 28.6 31.4
Total COVID-19 Impacts 1,400 553.6 846.4
Further Funding Assumptions
Assumed Reimbursement of Public Health Costs (31.4)
Adjusted remaining COVID-19 Funding Shortfall 815

*Reflects preliminary City allocation estimate of transit funding commitments

The City has continued to actively engage with federal and provincial counterparts at all levels to obtain funding support to address the remaining COVID-19-related funding gap.

Background & Context

2022 marks the third year of significant City financial challenges due to COVID-19. Since the onset of the pandemic, the City has faced unprecedented added costs and revenue losses, predominantly attributed to reduced transit ridership, shelter and long-term care services and extraordinary public health costs. Funding support continues to be critical to offset COVID-19 impacts on the City’s operating budget.

From March 2020 to December 2021, the City received approximately $2.8 billion in COVID-19-related emergency funding commitments from other governments, coupled with $1.1 billion in savings and offsets generated from City led mitigation strategies over that same period. A further $107 million that the City received flowed to community agencies.

In February 2022, City Council approved the 2022 Operating Budget, which included $1.4 billion in COVID-19 impacts and the expectation of continued COVID-19 support funding from the federal and provincial governments, and a further $0.5 billion in City-led offsets. During the 2022 budget process, information was provided to City Council through the:

Following the approval of the 2022 Operating Budget, City Council directed the City Manager and the Chief Financial Officer and Treasurer in April 2022 to continue to engage with the federal and provincial governments to obtain funding commitments to fully address remaining COVID-19 related financial impacts anticipated in 2022. Continued support is critical to address the financial impacts experienced with reduced transit ridership and increased demand for shelter services. Compared to pre-pandemic levels, transit ridership has seen significant and sustained decreases resulting in reduced revenues. In addition, shelter services are in increasingly high demand, with the City of Toronto providing more shelter beds per capita than any Canadian city, currently accommodating over 8,000 people each night.

COVID-19 financial impacts, including increased costs and reduced revenues, are expected to continue into 2023 and future years. Preliminary estimates assume continued impacts of between $550 million to $1.1 billion in 2023 alone.

Equity, Diversity & Inclusion

COVID-19 has had a disproportionate impact on racialized, Indigenous and equity-seeking communities, deepening inequalities already experienced by residents, neighbourhoods and communities across the City. The pandemic has exacerbated the City’s structural financial challenges and further misaligned revenues and responsibilities, which existed prior to the pandemic.

Given this context, the City continues to make difficult decisions about costs, services, service levels, and capital projects. To recover effectively, the City will need help to address these structural challenges, while simultaneously funding the services critical to public health, economic growth, and improving equity.

Key Contact

Stephen Conforti
Executive Director, Financial Planning, 416-397-4229

Karen Jones
Director, Intergovernmental and Agency Relations, City Manager’s Office, 416-397-4429

Additional Resources

  • May 2022 COVID-19 Intergovernmental Funding Update (CC43.3)
  • City Capital and Operating Variance reports for the Four Months Ended April 30, 2022 (EX34.13 and EX34.14)