Ontario Finance Minister Charles Sousa confirmed Friday that the province is going to stop paying Toronto the $150 million it gives it every year to help pay for welfare. The funds will be cut by $50 million per year, for the next three years.
City manager Joe Pennachetti said he had been given no warning of the change, "None at all," he told a reporters at city hall.
At issue is a fund that provides Toronto with $150 million to help pay its high welfare costs.
Mayor Rob Ford says the money is used by the city to help pay for social housing.
Sousa says the province has started paying for more of the welfare costs itself, so Toronto is actually benefiting - and from now on the city will be treated the same as other municipalities.
"Other municipalities complained that Toronto was even getting more than they were, so we're just trying to be fair and equitable," Sousa said.
"We're also going to continue to provide the supports greater than the pooling amounts that are being removed," he said.
Sousa said Toronto would get $364 million this year to pay for social programs, growing to $500 million by 2016.
Ontario is facing a nearly $12 billion deficit.
But Ford told a mid-afternoon news conference that the change came as "a complete shock" and that he would not raise taxes to cover the shortfall.
"I am not raising taxes," Ford said. The money, "must come from cuts [to programs]."
Although Ford said he remained "optimistic" a solution could be found he was also angry that the province was shifting the tax burden to the city.
But Sousa said he didn't accept Ford's argument.
"There's only one taxpayer, and if the mayor feels that it's appropriate for other levels of government to increase taxes so that he can say he didn't, I'm not for that," the minister said.
Ford blasted the Liberals, "They're squandering billions," he said.
The mayor has asked for a meeting with the finance minister, which is expected to take place on Monday.
When asked by reporters what he wants to get out of that meeting, Ford shot back, "I want the $50 million."