The City of Toronto continues to monitor and analyze the financial impacts of the COVID-19 pandemic on the municipal budget, while at the same time fiscally preparing for recovery and rebuild in the months to come.
As part of this work, City staff will be presenting the five-month variance report to the Executive Committee for consideration next week, about the experienced and anticipated financial impacts of COVID-19, including mitigation options.
The report notes that the City anticipates 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.
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.
The Operating Variance Report can be found at app.toronto.ca/tmmis/viewAgendaItemHistory.do?item=2020.EX15.8.
The Capital Variance Report can be found at app.toronto.ca/tmmis/viewAgendaItemHistory.do?item=2020.EX15.7.
More information about the City’s response to COVID-19 is available at toronto.ca/covid-19.
Quote:
“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. 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. 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. 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.”
– Mayor John Tory
Toronto is home to more than 2.9 million people whose diversity and experiences make this great city Canada’s leading economic engine and one of the world’s most diverse and livable cities. As the fourth largest city in North America, Toronto is a global leader in technology, finance, film, music, culture and innovation, and consistently places at the top of international rankings due to investments championed by its government, residents and businesses. For more information visit the City’s website or follow us on Twitter, Instagram or Facebook.