Freeland rejects Toronto mayor Chow's ask for financial help from federal government

Deputy Prime Minister Chrystia Freeland has rejected a request from Toronto's new mayor for hundreds of millions of dollars in financial support for Canada's biggest city.

In a letter sent to Toronto Mayor Olivia Chow on Monday, Freeland says the federal government has contributed over $6 billion to the city since it was elected in 2015. And if further help is needed, Toronto should either pull money from its reserve accounts or approach Premier Doug Ford's provincial government.

"The ability of the federal government to spend is not infinite — and the emergency support we provided during the pandemic led directly to the excellent fiscal position that the province of Ontario currently enjoys," Freeland writes in the letter to Chow. 

The city of Toronto faces a near billion dollar budget shortfall this year and Chow is just the latest member of city council to ask for federal and provincial assistance. Both former mayor John Tory and deputy mayor Jennifer McKelvie waged public campaigns to get funding from both levels of government to cover the shortfall which is largely related to continued costs from the pandemic.

In recent years, both the federal and provincial governments had provided billions in funding to help the city cover those costs. But 2022 marked the first time the federal government did not provide that funding even as the province gave Toronto several hundred millions to help address the gap. 

In the end, Toronto postponed millions in infrastructure work, pulling money from its capital budget to balance its books, something that is required by law.

Freeland says that those funds could cover off the $933 million shortfall expected by the city this year. 

"As of September 30, 2022, Toronto's total reserves and reserve funds held a balance of $11.2 billion—up $2.2 billion, or 25 per cent, from 2021," Freeland writes. "We estimate that within these reserves, at least $1.6 billion is available in uncommitted "stabilization" funds." 

Since taking office, Chow has spoken with both Prime Minister Justin Trudeau and Ford. The province has signalled a willingness to partner with the city, she said. 

"I remain hopeful that the federal government will join us as well, despite today's finger-pointing," Chow said. 

"Recently, when we worked together sheltering refugees, we saw some immediate short-term successes. That is the kind of continued partnership we need to deliver affordable housing, fast and reliable transit, and good public services for the people of Toronto for years to come," she added.

A spokesperson for Premier Doug Ford said the Ontario government has provided billions in funding to help the city address its COVID-19 shortfall. 

"We hope the federal government and Toronto can work together to find a solution," Caitlin Clark said in a statement.