John Tory warns of ‘massive’ tax hike if no Toronto bailout

Mayor John Tory, re-elected last month promising to keep a lid on taxes, is now warning of big tax hikes and deep service cuts unless Queen’s Park and Ottawa rescue Toronto’s pandemic-ravaged finances.

Tory on Thursday released a letter to Ontario Premier Doug Ford and Deputy Prime Minister Chrystia Freeland saying, after months of discussions, he needs commitments for hundreds of millions of dollars in bailout funds by Nov. 30.

Toronto got $483 million from the other governments to cover lost transit revenues in 2022, but with the year coming to a close, the city needs another $815 million to balance this year’s books as is legally obligated, he said.

Canada’s biggest city is also staring at a $1.48-billion gap between revenues and expenses in its 2023 budget, to be passed in February, thanks to the pandemic “hangover” plus other factors, including rising interest rates and fuel costs.

Toronto needs huge cash infusions, the mayor said, “so that we do not have to make deep cuts to services our residents require, impose massive tax increases they cannot afford, or implement reductions to our capital budget which will eliminate thousands of jobs and threaten our economic recovery.

“The entirety of the amounts requested are as a direct result of the pandemic and the necessary measures taken to deal with the consequences of the pandemic.”

Toronto has already been forced to delay capital projects such as roadwork and floodproofing while Tory lobbied other governments for help. This is the first time he has put a deadline on it, warning that further construction delays can’t happen when some sewer pipes are more than a century old.

He was elected to a third term on Oct. 24 promising to keep the 2023 property tax hike below the rate of inflation. Critics accuse Tory of making the city vulnerable to crisis by championing low taxes, failing to introduce revenue sources and insisting on a costly elevated Gardiner Expressway rebuild.

Speaking Thursday after an announcement with Toronto MP and federal Housing Minister Ahmed Hussen, Tory said neither Ford nor Freeland have refused to bail out Toronto’s finances, but nor have they committed to further help.

“We cannot tax our way out of what happened with COVID, and we can’t cut our way out of it,” Tory said, noting city belt-tightening and calling the crisis “a COVID hangover completely.”

“It’s time for the talking points to be brought to an end, and it’s time to sit down.”

Hussen refused to say if Prime Minister Justin Trudeau’s cabinet has discussed a financial lifeline, saying only that he is a champion for the city within a Liberal caucus that has stepped up with major funding for Toronto housing projects.

David Rider is the Star’s City Hall bureau chief and a reporter covering city hall and municipal politics. Follow him on Twitter: @dmrider


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