The province is currently phasing out the Toronto Pooling Compensation, funds promised in 2008 that were supposed to go towards financing social housing projects and maintenance in the city. The province's decision came unexpectedly, Tory says, and has left the city with an $86-million funding shortfall in the budget.
Tory's plan is aimed at spreading the impact of that shortfall across several years by diverting $130 million in capital projects for "urgent investments" over three years — $60 million this year alone — and then repay those costs with money borrowed from the city's multibillion-dollar investment fund.
In other words, the city will be borrowing money from itself to pay for promised service improvements.
Tory told CBC's Metro Morning it's the only "prudent" option, considering the alternatives of "dramatically" reducing services or raising property taxes by an additional three per cent.
Tory campaigned on a promise not to raise property taxes in the city beyond the rate of inflation. And he says former mayor Rob Ford's administration already tried and failed with the approach of slashing public services.
"The last administration tried that, I mean they really did take a hacksaw to the public transit system of this city and made it harder for people to get around, among other things, and I think it was the wrong decision," he told Metro Morning host Matt Galloway.
The plan will require the city to find another $80 million in efficiencies in coming years if the province doesn't come through with new funding commitments.
Tory said he will push other levels of governments to step in, but when pressed by Galloway on where the money will come from if the province doesn't step up, Tory insists he can find the room to pay the money back.
"People, I think, understand that I know how to manage finances and that I will work with the other levels of government ... to make sure what we can do is provide the services that we need and at the same time rely on a property tax increase of not more than the rate of inflation."
In addition to the nearly $26-million of cuts in this year's budget, city staff says another $45 million in "budgetary adjustments" each year from 2016 to 2018 will be necessary to compensate for the loss in provincial funding.
"This can be done." Tory insisted. "It requires steely determination, which I have."
The plan will be presented to the budget committee this morning for consideration.Suggest a correction