LUMCO Looks for Help to Cover COVID-19 Costs

It’s a well-known secret that the COVID-19 pandemic is causing all kinds of complications on the bottom line of businesses and individuals, but it’s also causing streams of red ink for Canada’s cities too. The mayor’s of Ontario’s 29 biggest cities, the Large Urban Mayors’ Caucus of Ontario (LUMCO), are raising the alarm after a meeting today that they need higher levels of government to give them extra help to manage the fiscal blow from coronavirus.

“Ontarians rely on municipalities to continue to provide essential services like police, emergency services, and the delivery of clean drinking water,” said Guelph Mayor Cam Guthrie who’s presently the chair of LUMCO. “On behalf of Ontario’s big city mayors and in solidarity with municipalities across Canada, I implore the federal government to take significant and immediate action to assist municipalities facing unparalleled financial hardship during this period of great uncertainty.”

LUMCO’s media release today piggybacks on a similar call last week from the Federation of Canadian Municipalities (FCM) who warned that Canadian cities could be facing a shortfall of between $10 and $15 billion in near-term, non-recoverable losses including property taxes, utilities and user fees. FCM pegs the nation-wide loss of revenue from transit allow to be $400 million per month.

“From turning arenas into safe shelters to deferring property taxes, municipal leaders are working flat-out to support Canadians through this pandemic,” said FCM President Bill Karsten in a statement. “But with new expenses, staggering drops in revenue and no freedom to run deficits, municipalities need emergency funding to keep essential services going strong.”

In Guelph, the total losses from COVID-19 have been pegged so far at around $9 million. In a report to council earlier this month, City staff noted that City Hall has spent $5 million on the COVID-19 response, and has lost $3.9 million in revenues.

FCM is urging the Federal government to approve $10 billion in emergency operating funding, including $2.5 billion specifically for transit subsidies.

“Emergency funding for municipalities is the next step to get Canadians through this pandemic,” said Karsten. “From fire and ambulance to safe transit for essential workers, this is about delivering vital services when people need them the most. We’re all in this together, and our municipal-federal partnership can help carry Canadians through this crisis—and be ready, when the time comes, to drive the economic recovery they’ll be counting on.”

Back at Tuesday’s LUMCO meeting, the mayors were joined by Ontario’s Minister of Municipal Affairs and Housing Steve Clark, and Mayor Guthrie said that he heard the urgency of the situation, and that he said all three levels of government need to work together to make it through to the other side of the crisis.

LUMCO also passed a resolution at their meeting to affirm that running deficits is no way to manage the fiscal challenges of the pandemic, and that they’re not in the public interest. Ontario municipalities are barred by law from carrying a debt, and, as recently explained to Guelph Politico by Guelph City Treasurer Tara Baker, if a City incurs a negative variance on the annual budget, it must present a plan to pay it off in its entirety.

“The solution is to deal with these financial problems today and not push fiscal challenges to future years,” added Guthrie. “That’s why we need better tools in the toolbox, such as emergency operating funding, to keep critical services running.”

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