June 1, 2020
Statement: Federal Government’s Gas Tax Announcement
“I welcome the announcement from Prime Minister Trudeau today that the federal government will move forward immediately the remainder of the 2020-21 payment of the federal Gas Tax for municipalities. It’s a recognition that the municipal financial crisis is a national financial crisis.
“While this is a good start, this is not new money and has already been accounted for in our annual budgets. It assists with short term liquidity, but cannot be used to help us cover our operating losses.
“I appreciate the Prime Minister’s commitment that he will continue to work with municipalities and the provinces on a more comprehensive, long-term solution and in his words, “do more.” We need funding that is flexible and can be allocated based on where it is needed most.
“Cities provide essential services to residents – fire, ambulance, police, transit, shelter, homes, water and sanitation, and so much more. Cities are economic engines in Canada. For the economic recovery to be successful, cities must be operating at their peak. A strong recovery requires strong cities.
“Extraordinary times call for extraordinary measures. While it has never been the case that the federal government provides operating funding for municipalities, this crisis has generated a need for them to do so now.
“The provincial government also has a significant role to play as well. The Premier has been very vocal and receptive to the needs of cities during this crisis and I encourage him and the other provincial leaders to come to the table and work with the federal government to develop a funding plan for municipalities. Cities are “creatures of the province,” and as such, the provinces have a responsibility here as well.
“Cities across Canada are facing unprecedented revenue losses as a result of COVID-19. In Mississauga, lost transit and recreation revenue, as well as lost investment income and property tax deferrals, has resulted in a $50M deficit to the end of May. If the crisis continues to the end of the year, we are facing up to a $100M deficit. That’s equivalent to closing the entire city for 2 months, or stopping transit for 11 months.
“We are taking action to address our shortfalls. We have implemented a hiring freeze and in April, we made the unfortunate decision to lay off 2,000 temporary staff. Municipalities are so far the only level of government to lay off workers. We are deferring taxes and other payments to provide relief where we can to residents and businesses.
“The federal and provincial governments have provided assistance to every other sector of the economy. It’s now time they help cities. We cannot run deficits or borrow the way the other levels of government can.
“Now is the time for all three levels of government to work together. Now is not the time for jurisdictional politics. It’s time for a new financial framework in this country that provides cities with the funding they need to build the communities we all want to live. City-building is nation-building.”