'Unique' Toronto gets special deal with the province. Other municipalities want one too

A deal betweenToronto and the Ontario government to provide the city with financial stability has other municipal governments in the province asking: Are we next?

The Toronto-Ontariodeal was announced Tuesday. It would see up to $1.2 billion in funding for the cityfor transit including investments in the subway system, homelessness and shelters, and "continuing discussions on the longer-term sustainability of Toronto's finances and operations."

As part of the deal, the province would take over two major highways: the Gardiner Expressway and the Don Valley Parkway.

Additionally, Toronto would drop its opposition to changes the provincewants to make to Ontario Place.

Region of Waterloo Chair Karen Redman said it's a good deal for Toronto, but the city isn't the only one in the province facing significant financial pressure.

"There's no doubt Toronto is the biggest fish in the pond, and they now have a process that has some clarity and a way forward," Redman said in an interview with Craig Norris, host of CBC Kitchener-Waterloo's The Morning Edition.

"All other municipalities in Ontario and certainly the Region of Waterloo and area municipalities need that kind of clarity going forward."

The Toronto-Ontario deal does require some support from the federal government. Knowing that, Redman wrote letters to both Premier Doug Ford and Prime Minister Justin Trudeau asking them to develop a similar framework for financial stability and sustainability.

"Our 650,000 residents deserve the same respect for their tax dollars and an equal opportunity to thrive in Ontario," her letter says.

'Toronto is unique'

During a newsconference announcing the deal with Toronto, Ford was asked whether other municipalities could expect similar deals.

WATCH|Ontario did a major deal with Toronto: Will other cities see the same?:

Ontario did a major deal with Toronto: Will other cities see the same?

10 months ago

Duration 1:56

Premier Doug Ford says the province works collaboratively with all the province's cities and municipalities, but he added Canada's largest city has some unique needs.

He said the government has worked with municipalities to increase funding and "the City of Toronto is unique, unlike any other city in Canada."

He noted Toronto has a subway system and the city represents 50 per cent of the province's gross domestic product (GDP).

"When Toronto does well, Ontario does well. When Ontario does well, Canada does well, you know, we're the engine of Canada," Ford said.

In an email to CBC News, Emily Hogeveen, spokesperson for Finance Minister Peter Bethlenfalvy, said the province has worked to provide "predictability and stability" to municipalities when it comes to annual budget planning.

For example, she said, municipalities were told in October that the province would provide $500 million through the Ontario Municipal Partnership Fund for 2024, "the earliest [the funds] have ever been announced before."

The amount of money, shared by 389municipalities, has remained static since 2020, and groups such as the Association of Municipal Managers, Clerks and Treasurers of Ontario have called on the province to provide long-term funding supports "reflective of the value and cost of the services municipalities are expected to deliver."

Hogeveen offered other suggestions where the province has also invested in municipalities, including:

• $1.2 billion over three years to the Building Faster Fund.
• $200 million over three years to the housing-enabling water systems fund to help "unlock new housing opportunities."
• Doubling the annual investment in the Ontario Community Infrastructure Fund to $400 million.

She added that starting Jan. 1, the province will restore annual base funding of $47 million for public health units "to the level previously provided under the 2020 cost-share ratio."

"Our government is committed to supporting municipalities in a way that is sustainable and responsible," Hogeveen said.

Communities face very similar struggles: Guelph mayor

Guelph Mayor Cam Guthrie agreed Toronto is unique, "but there are a lot more similarities than uniqueness when it comes to our cities."

"We are all struggling with many of the same factors that Toronto is struggling with: Infrastructure costs, homelessness costs, healthcare costs that are being downloaded to municipalities, safety issues, these are all things that especially are impacting larger urban centres," Guthrie told CBC News.

In October, Colin Best wrote a letter to Ford about the provincial-municipal fiscal partnership. Best is president of the Association of Municipalities of Ontario (AMO) and Region of Halton councillor, representing the Town of Milton.

"Due to increasing demands on municipalities and evolving federal and provincial funding policies, the provincial-municipal fiscal framework is now broken," Best's letter said.

"Complex challenges like homelessness, mental health and addictions and long-term care transcend any one level of government and require multi-faceted, transformational approaches."

Best says he is still waiting for a response to that letter.

'No one saw this one coming'

Best was with other municipal leaders at a housing conference with Minister of Municipal Affairs and Housing Paul Calandra when the Toronto-Ontario deal was announced, and he said he was "gobsmacked" by the news.

"No one saw this one coming," Best told CBC News, adding it led to conversations with the minister. "One thing we were all stressing to them is that we really need a sustainable path that supports our social and economic growth because we don't have that right now."

Best noted this past Thursday marked the one-year anniversary when former housing minister Steve Clark wrote municipalities to say the province would make them "whole" financially because of cuts to development charges in the More Homes Built Faster Act, commonly called Bill 23.

"We're still waiting to hear back on that," he said, adding municipalities cannot take on debt and "we don't have a way of increasing revenue except, you know, raising taxes all the time."

Still, Best has hope the AMO can work collaboratively with the other levels of government.

"Property tax was meant to serve properties. It wasn't meant to do health and social services as well as other systems that we've had over the years," he said.

"Municipalities need a different way of doing things to make ourselves sustainable."

One-off deals not great, professor says

ZackTaylor, is an associate professor of political science at the University of Western Ontario in London, Ont., and founding director of the schools'Centre for Urban Policy and Local Governance. He saidthere is one way the federal government could help municipalities although it might be politically unpopular.

Taylor saidthe federal government could raise the HST by one per cent, with the money from that going to municipalities.

"The benefit of that would be that it would apply all the way across the country and municipalities would get their share of it, maybe in proportion to their population or maybe there could be a more elaborate formula than that. The good thing about that is it would be applied the same everywhere," he said.

Taylor notes at this particular moment politically, where the federal Liberals have a deal with the NDP to remain in power, it's"a very tricky situation."

"The government could gamble that by throwing out a rescue lifeline that would be generally applicable all the way across the country, that people would be willing to pay a little bit more to get more," he said.

"Or they may decide that any kind of tax increase damages them politically and so they won't do it."

Katherine Cuplinskas, spokesperson for federal Finance MinisterChrystia Freeland, said in an email that municipalities and the federal government work well together.Cuplinskas said that includes the federal government providingfunding from programs like the housing accelerator fund, for transit and the Canada Community Building Fund.

"Municipalities, including Kitchener and Waterloo, have had and will continue to have a strong partner in this federal government," Cuplinskas said.

Taylor warned whatever does happen going forward now, it must be equitable.

"What I worry about is that,if you start having special deals municipality by municipality, then we get this kind of rush for the trough that we're starting to see right now where everybody says, 'Well, Toronto got that. I want it, too,'" he said.

"We just can't have one-off deals when there's 3,500 municipalities across the country and 444 in Ontario alone. And we can't just make special deals for big municipalities even though they have bigger problems, because smaller places will demand the same thing."