Municipalities must control spending in the wake of COVID-19
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Thursday, Dec. 10, 2020
Toronto, ON: The Canadian Taxpayers Federation is calling on Ontario municipalities to reduce spending instead of raising taxes or asking other governments for more money following the release of a report from the Financial Accountability Office of Ontario on the impact of COVID-19 on municipal budgets.
“Politicians must remember that taxpayers are struggling to balance their own household budgets too,” said Jasmine Moulton, Ontario Director for the Canadian Taxpayers Federation. “Instead of raising taxes or adding more to the debt of the provincial and federal governments, Ontario municipalities must tighten their belts and rein in wasteful spending.”
The FAO’s report, released today, estimates the financial impact of COVID-19 on Ontario’s municipalities will amount to $6.8 billion over two years (in 2020 and 2021).
However, the report also notes that municipal cost-saving measures and federal-provincial financial support “will allow municipalities to completely mitigate the $4.1 billion financial impact from COVID-19 in 2020.” Additionally, “municipalities are projected to run a combined budget surplus of $6.0 billion in 2021” in aggregate after accounting for support from the federal and provincial governments.
“There are three levels of government spending money at record pace, and only one struggling taxpayer footing the bill for all of it,” said Moulton. “While some Ontario municipalities have tightened their belts to balance budgets, our message to the others is this: get your spending under control because taxpayers can’t afford to foot the bill.”
Government employee compensation is usually the single largest operating expense faced by municipal governments. A SecondStreet.org report analyzing the history of pay cuts for government employees couldn’t find any records from Ontario cities including Toronto, Ottawa, and Mississauga – all three of which face budgetary shortfalls in 2021.
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For media inquiries, contact:
Jasmine Moulton,
Ontario Director, Canadian Taxpayers Federation
p. 416-573-5458