The pandemic will cost Toronto at least $ 1.5 billion in 2020, city officials estimate.
That is the best-case scenario, Mayor John Tory said Friday during a city hall press conference. The worst-case scenario — a prolonged lockdown — would create a financial hole of $ 2.76 billion.
“This is one of the greatest financial challenges this city has ever faced,” Tory said.
He said the federal and provincial governments will need to step in to help.
“We know that when Toronto does well Ontario does well and Canada does well. The entire country is counting on a strong recovery here and we want to lead that charge for us, but also for all Canadians. I am determined that we will deliver that.”
The $ 1.5-billion estimate assumes a three-month lockdown of services and strict social distancing; a six-month recovery period where revenues like TTC fares won’t be at budgeted levels right away as the city increasingly comes back to life; and the added costs during the pandemic, like additional shelters for those experiencing homelessness.
The higher figure assumes a nine-month lockdown and a 12-month recovery period after that. The $ 2.76-billion estimate is only for 2020. This scenario, if it became a reality, would continue to cost the city in 2021.
That financial hit could fluctuate if the lockdown is extended or reinstated or if the recovery phase ends quicker or lasts longer than anticipated.
The city will need the provincial and federal governments to intervene to cover much of that billion-dollar gap. Municipalities, under provincial laws, can’t go into debt to pay for operating expenses.
Earlier, city officials calculated Toronto would lose $ 65 million a week during the pandemic from a combination of estimated costs and revenue losses. The new number takes a recovery period into account and extrapolates to the end of the year.
City manager Chris Murray previously said that surplus funds the city has from 2019 and other strategies were sufficient to cover that gap until June 1. After that, staff would be calling on the other levels of government to help, according to an internal presentation.
On Friday, Premier Doug Ford did not answer directly about whether he would allow municipalities to run deficits to deal with the COVID-19 financial fallout.
“Well, I know the Minister of Finance, he’s been working on a plan. I’ve had this discussion with Mayor Tory, and Minister Clark as well is working with all municipalities — all 444 of them,” he said. “I know they’re struggling, but all levels of government right now are struggling financially based on this COVID-19 and we’re going to do whatever it takes.”
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