Toronto has saved hundreds of millions but still faces $1.35 billion shortfall due to COVID-19

The City of Toronto has saved hundreds of millions of dollars through a series of cuts but still faces a shortfall of $1.35 billion in its operating budget due to the COVID-19 pandemic.

The city had at one point said that it could face a shortfall of between $1.5 billion and $2.7 billion due to lost revenue and increased costs resulting from the pandemic but a staff report released on Tuesday paints a slightly rosier, though still incredibly alarming picture of its fiscal situation.

The 76-page report, which will be considered by the city’s executive committee next week, says that the financial pressures faced by the city by the end of 2020 will total $1.9 billion. The report, however, says that the city has already saved $188 million through various “mitigation strategies” and expects that number to increase to nearly $548 million by the end of the year, reducing the likely shortfall to $1.35 billion.

It says that some of the mitigation measures undertaken so far have included the placing of 9,980 city staff on emergency leave as well as a reduction in transit service.

The report, however, warns that “further mitigation options” will have to be considered by council during their September “if municipalities continue to receive inadequate financial support from the federal and provincial governments.”

TTC faces $700 million shortfall

The report says that the TTC alone will face a nearly $700 million shortfall in its budget by the end of 2020, largely as a result of ridership losses that peaked at 86 per cent during the height of the pandemic and are expected to hover around 70 per cent this fall.

The report says that the city’s “non program revenues” will also be down by $481 million by year-end, mostly as a result of a significant reduction in real estate listings that has been impacting the revenue from the Municipal Land Transfer Tax to the tune of about $9.3 million a week.

Meanwhile, the report warns that the shortfall in the budget for Shelter, Support and Housing Administration could hit $185 million by year-end as a result of additional costs related to maintaining physical distancing in the shelter system.

There are also dozens of smaller budgetary impacts, each totalling in the millions of dollars.

The report says that the Toronto Parking Authority budget will face a shortfall of $96.4 million, mostly due to a partial suspension of enforcement for some parking offences during the pandemic. It also says that the city’s IT budget will face an $11.4 million shortfall as a result of expenses related to enabling city staff to telework during the pandemic.

It remains unclear how the city plans to cover such a significant shortfall, though Mayor John Tory has previously warned that a series of devastating cuts will be necessary if the provincial and federal governments don’t come to the table with funding to help offset the city’s losses.

Tory is expected to speak with reporters about the staff report during a news conference scheduled for 10:30 a.m.

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