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February 8, 2006
Cost of delivering provincial programs puts city services at risk Province working with Toronto to find a solution
Toronto council’s budget advisory committee today continued to look for ways to deliver basic municipal services this year while at the same time paying more than $700-million to provide programs that are a provincial responsibility.

“There is a need for the province to permanently resolve the fiscal situation in which it has placed the City,” said the committee’s chair, Councillor David Soknacki. “The problem has been ignored to the point where there are no longer temporary fixes available for what is a major financial problem for Toronto.”

In 2006 alone, city expenditures for the Ontario Disability and Drug Benefit programs and the cost of providing under-funded provincial social services will add up to more than $225-million. These costs, and other expenses which should be picked up by the province, are eating away at the municipality’s ability to pay for its own transit, recreation, waste collection and recycling, youth and public health programs.

Members of the Budget Advisory Committee are currently examining ways address Toronto’s operating budget shortfall. To address the issue, they are looking at all possible ways to reduce spending and increase revenues. The Committee has also called on the Ontario government to implement a five-year plan proposed by Mayor David Miller. It would see the province:

• resume funding of the social assistance and drug benefit programs that were downloaded to Toronto
• resume the shared operating budget funding that was provided to the TTC
• provide the city with revenues that grow with the economy

“As things stand now, significant reductions will be required to meet the City’s operating budget shortfall,” Councillor Soknacki said. “There are simply not cuts available to find half a billion dollars without cutting entire programs or closing community centres and libraries.”

More than 60 per cent of the property taxes paid by average homeowners go toward providing critical City services such as police, fire, emergency medical services, the TTC, garbage collection and recycling, libraries, parks and roads. However, property taxpayers are still required to pay for programs that were downloaded by the Province without adequate funding. Provincial programs such as social housing, disability payments and other income support programs now make up about 35 per cent of the costs funded from the property tax base. The City of Toronto, like other major municipalities, believes such programs should be supported by the Province through income tax.

“We are working with the Premier and his government to find a solution to this problem,” said Mayor Miller. “Toronto’s property tax dollars should be spent on municipal services - not programs that are the Ontario government’s responsibility.”

The Budget Advisory Committee will continue budget deliberations in preparation for City Council’s consideration of its spending recommendations in March. The committee has recommended a freeze on hiring of city staff both in operations and in the City’s Agencies, Boards and Commissions

Toronto City Council will review the final operating budget at the Council meeting scheduled for March 27 to 31, 2006.

Media Contact:

Stuart Green
Deputy Communications Director
Office of Mayor David Miller

Kevin Sack
Corporate Communications and Media Services



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