In Conversation ~ With Gary Crawford, Budget Chief
By Bret Snider
I recently interviewed Ward 20 Councillor Gary Crawford to get his insights on the economic effects of the Coronavirus (COVID-19) on the City’s finances.
Q: Gary, you have been the City of Toronto Budget Chair since 2014 – correct?
A: “Yes, Mayor Tory recommended me, and Council endorsed me in 2014. I am now in my 6th year as Budget Chair.”
Q: Toronto is the sixth largest economy in Canada and is the fourth largest City in North America. How has the Covid-19 Pandemic effected our City’s revenues?
A: “Our Municipal revenues have plummeted. We’re losing approximately $65 Million per week due to loss of revenues ranging from low TTC ridership, Municipal Land Transfer Tax (MLTT) declines, Toronto Parking Authority (TPA) revenue declines, permit fee declines, etc.…
This all translates to an estimated $1.5Billion to $2.8 Billion annual deficit if the pandemic lasts anywhere from 9 to 12 months. Our costs have also increased due to the crisis, including purchases of Personal Protective Equipment, overtime for some staff and increased costs to provide social distancing at shelters throughout the city.
To be safe and limit risk, most employees are working from home or have been re-deployed. Minimal lay offs may be considered; however, we’re making our best efforts to avoid that impact. The City is also implementing some cost-covering initiatives, yet they really won’t begin to deal with the financial challenges we are currently facing.
The Toronto Transit Commission has played an essential role in moving over 300,000 people a day during the pandemic. They have reduced some routes but, most are being kept at regular service levels (80% of normal service) to help move essential and front-line workers while providing proper distancing on buses and subways. There has been an 86% decline in revenues adding to over $300M in revenue losses by September.”
Q: Canadian cities, by statute, are not permitted to run deficits or carry debt. Is that correct?
A: “Yes, Toronto, like all municipalities, must balance their budgets yearly by virtue of Provincial legislation. We don’t have the ability to raise debt to support operating expenses or to have a deficit, unlike the Provincial or Federal Governments.
The magnitude of the financial challenges facing the city of Toronto are such that we’ll need financial support from both the Provincial and Federal governments. Both City Council and the Mayor have been working closely with both those governments to advocate financial support for all municipalities in the Province.”
Q: Given that, are we looking at tax increases for the foreseeable future?
A: “We’ll continue our commitment to keep taxes as low as possible. It’s our hope that both the Provincial and Federal governments will provide financial support to municipalities, including to the City of Toronto.”
Q: Aside from Provincial and Federal transfers, are you considering any other financial vehicles to address the shortfall and perhaps mitigate the possibility of deficits and debt in the future?
A: “This pandemic is unprecedented. The financial impacts that the city is facing are historic in size and complexity but I do have the confidence that we will overcome these challenges in time with the support of the other levels of government and the hard work of city staff to find ways to manage these financial challenges.
As a municipality we are limited in our ability to look at other financial vehicles other than raising property taxes to address our shortfall. Options like municipal bonds, a sales tax or even a lottery fall under the purview of the Provincial Government. Even though the City of Toronto has a budget larger than many Provinces we are governed by Provincial Legislation that limits our ability to raise revenues beyond property taxes and the Municipal Land Transfer Tax.”
Q: Some people don’t realize that party politics is not officially permitted at the municipal level but there exists a range of political views from left to right. Is that having an impact on decisions being made during this period of crisis?
A: “Council has been working cohesively to advocate for and support all Toronto residents while determining the best course of action to re-open our great City and stimulate the local economy as we embark on a path to full recovery.”