Toronto could see cuts 'rapidly happen' without more money from feds, province: McKelvie

Toronto's next mayor will have to oversee cuts to services if other levels of government don't help cover a nearly $1 billion budget shortfall, the deputy mayor said Wednesday, criticizing what she described as Ottawa's lack of support for the city.

Jennifer McKelvie argued the federal budget released a day earlier had shut out Toronto.

"While the federal government wants to focus on growth, they can't leave municipalities that are very much in the state of recovery behind," McKelvie said at city hall.

The budget shortfall loomed large as Toronto city council met Wednesday for the first time since former mayor John Tory resigned last month after revealing he had an "inappropriate affair" with a staffer.

The next mayor will be charged with securing support for the city from the other levels of government, McKelvie said.

"I look forward to the new mayor ... getting a good deal for Toronto," she said.

Toronto's budget, approved by council last month, was balanced on the assumption the province and federal governments would come up with a combined $933 million to bail out the city's 2023 pandemic-related shortfalls, related largely to reduced transit revenues and increased shelter costs.

But Ontario and the federal government made no such commitments in their respective budgets.

Freeland urges Toronto to ask Ontario for help

Federal Finance Minister Chrystia Freeland said Toronto had received "massive support" from the federal government throughout the pandemic, including $1 billion as part of program to help municipalities recover lost revenue.

There are "legitimate questions" about whether the city has enough of a tax base, she said, adding it would be "highly appropriate" for the city to seek out support from the provincial government, which tabled a budget last week that forecasted surpluses next year and the year after.

"I think today it would make a lot of sense for City Hall to just go up University (Avenue) and knock on the door at Queen's Park and say, 'You're looking pretty flush. We think you should write a few cheques to the City of Toronto'," Freeland told CBC Radio's Metro Morning.

LISTEN | Federal Finance Minister Chrystia Freeland speaks to Metro Morning:

A spokeswoman for Ontario Municipal Affairs Minister Steve Clark said the province continues to support Toronto to ensure it is addressing local needs.

"Ontario has provided over $2.7 billion in COVID-19 support funding to address Toronto's pandemic-related impacts," Victoria Podbielski wrote in a statement

"This includes joint federal-provincial investments under the Safe Restart Agreement, and other provincial supports to address COVID-19 impacts to local services such as transit, shelters, and public health."

Dipping into reserve 'not sustainable,' McKelvie says

McKelvie, who assumed some of the mayor's powers after Tory resigned, said Toronto would see "cuts rapidly happen" next year without help.

The city's services, especially shelter and transit systems, serve people from across the Greater Toronto Area and deserve additional support from the other orders of government, McKelvie said.

The city also struck out on its request for the federal government to match the province's $235-million commitment to help cover lingering shortfalls from last year's budget. McKelvie said the city will dip into reserve funds to shore up those costs.

"It's not a good strategy going forward. It's like taking out your RRSP to pay your mortgage," McKelvie said. "We know the way we're running the city right now is not sustainable."

Toronto 'as a great place to live' at risk, report says

Councillors on Wednesday discussed a financial outlook report for the city, prepared by consulting firm Ernst and Young, that indicated Toronto faced $46.5 billion in budget pressures over the next 10 years.

"Without meaningful action to address and reduce the $46.5 billion pressure, the future of Toronto as a great place to live, visit, and do business could be at risk," the report said.

City council also formally declared the mayor's office vacant on Wednesday, officially kickstarting the journey to a byelection.

Voters will head to the polls on June 26, with nominations for the mayoral race opening April 3 and closing May 12. Advance voting will be available from June 8 to June 13.

A crowded field of contenders has already emerged.