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Ford, Chow agree ‘new deal’ is needed to help tackle Toronto's massive deficit

Toronto Mayor Olivia Chow meets with Ontario Premier Doug Ford at the Queens Park Legislature in Toronto on Monday, Sept. 18, 2023.THE CANADIAN PRESS/Chris Young

TORONTO — Ontario Premier Doug Ford agreed Monday that the city of Toronto needs a "new deal" to address its growing financial pressures, but shot down two of the mayor's key requests for how to achieve that.

Mayor Olivia Chow sat down with the premier Monday at the legislature for a meeting that stretched past its scheduled one hour, bringing a message of financial urgency about the city's $1.5-billion deficit. It is a largely structural hole, Chow said, and due to services being downloaded to the municipality.

"The premier and I agree that Toronto is an economic engine - we generate half of the GDP in Ontario - and we also agree that the present financial arrangement is just not sustainable," Chow said.

"We need to have a long-term financial deal, a new deal, a better deal that...would have some kind of revenue that is secure, so that we don't have to — every year or almost every month — we are just talking about trying to find revenue sources."

Toronto city council voted earlier this month to bring in a new surtax on high-value home sales and ask the provincial government to use its authority to bring in a municipal sales tax for Toronto, or to give the city a portion of its existing Harmonized Sales Tax.

"I'm just not in favour, and especially in these times that people are struggling, to put more of a burden on the backs of the taxpayers," Ford said in response to a question about those proposals during a press conference with Chow following their meeting.

"There's always ways to look at revenue growth, as opposed to taxing people."

Ford also said, "No, not right now," when asked if he was open to sharing a slice of the HST.

In addition to agreeing that something structural needs to change with Toronto's finances, the mayor and premier also agreed Monday to form a working group with provincial and city officials to come up with solutions and report back by the end of November. The working group has a mandate to avoid new taxes and fees.

Chow said whether it is through tax revenue or uploading services, Toronto just needs sustainability.

"The city of Toronto really doesn't completely care where the money comes from," she said, giving examples of services such as child care, policing and public transit that the city delivers.

"As to where the funding comes from, it's really up to the province of Ontario. I know Premier Ford has a wonderful surplus that makes me quite jealous and wherever he can find the funding, I will just welcome it."

Ontario has projected a $1.3-billion deficit for this fiscal year, moving into a small surplus next year and being $4.4 billion in the black by 2025-26, but the finance minister also announced last September that the province ended 2021-22 with a surprise $2.1-billion surplus, a far cry from the $33-billion deficit projected in the previous budget.

The Financial Accountability Office has projected much larger surpluses, going from $3 billion this year to $10.6 billion by 2025-26.

Shortly before the meeting Monday, Ford announced that the province is adding $42 million in funding to a portable housing benefit, with more than half going to the city of Toronto.

The premier said the money through the Canada-Ontario Housing Benefit will help about 4,000 new households, going toward moving more people into housing and freeing up shelter space.

City officials say the number of asylum seekers in Toronto's shelter system grew by 500 per cent in 20 months.

The federal government in July announced $97 million for Toronto to help deal with the issue, but Ford and Chow have said it falls short of the $157 million the city needed.

This report by The Canadian Press was first published Sept. 18, 2023.

Allison Jones, The Canadian Press

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