OTTAWA – The Federation of Canadian Municipalities (FCM) released an urgent plea to the federal government last week for an increase in funding to municipalities nationwide. According to the FCM’s latest report, many are being pushed to the brink of financial crisis due to the COVID-19 pandemic. FCM President Bill Karsten stated: “With new expenses, staggering drops in revenue and no freedom to run deficits, municipalities need emergency funding to keep essential services going.”
“A lot of small business owners have been asking local mayors and councils to provide deferrals for property tax and for service costs for water, waste water and garbage,” said Green MP Paul Manly (Nanaimo-Ladysmith). “I’ve also heard from small business owners that municipalities are cancelling contracts with them. In one case a local farm and nursery in my riding has had contracts for plants cancelled. Contract cancellations like this end up cascading as businesses can’t pay their suppliers. Owners are forced to choose between paying bills and going bankrupt themselves.”
The FCM estimates that municipal transit systems are incurring monthly losses of about $400 million due to diminished ridership, part of at least $10-15 billion dollars in near-term, non-recoverable losses due to COVID-19. “A bailout package for municipalities could help them to defer tax and service fees while maintaining existing contract commitments," said Mr. Manly. "These measures will help a lot of Canadians and small businesses while ensuring that municipalities can continue to provide essential services including police, fire, water, sewerage and waste management.”
The FCM is calling for at least $10 billion in emergency operating funding, including $7.6 billion in direct federal allocations to all municipalities, plus $2.4 billion for those with transit systems. Additional funds would be needed for municipalities facing added challenges supporting isolation guidelines for vulnerable populations.
“Toronto alone is facing a shortfall of $2.76 billion in 2020 due to the pandemic,” said Tim Grant, the Green Party’s urban affairs and housing critic. ”Without federal support, cities will have to lay off large numbers of staff or dramatically boost property taxes. Both options will deepen the crises that cities face. By contrast, if cities receive needed emergency operating funding, they will be able to lead the recovery. Our cities are ideally positioned to get fast results from investments in social services and public infrastructure.”
“Given the unprecedented times we are in, and the extraordinary financial measures that have already been taken by the federal government to help citizens and businesses navigate this pandemic, let’s not overlook the importance of protecting municipalities,” said Green Party Interim Leader Jo-Ann Roberts. “Cities, towns and communities across Canada are the bedrock of our economic development. As we prepare for the recovery phase of this crisis we must ensure that they too are safeguarded from financial calamity.”
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