Ontario is ending a special "pooling" arrangement for Toronto to pay for welfare, disability support programs and social housing after other municipalities complained about unfair treatment, said Finance Minister Charles Sousa.
"We've made it clear consistently that revisions were going to be made to the pooling arrangement, which was put in place exclusively for Toronto," said Sousa.
"Other municipalities complained that Toronto was even getting more than they were, so we're just trying to be fair and equitable."
Mayor Rob Ford said he was "shocked" and "very, very concerned" to learn the funding was being withdrawn, and complained it was done without any advance warning from the province.
"Friends, this money will have to come from cuts to vital programs," said Ford.
"I am not increasing taxes over what I promised, one and three-quarter per cent."
Ford and council knew the program was being phased out as the province uploads the costs itself, and Toronto will still get more money overall, insisted Sousa.
"We're also going to continue to provide the supports greater than the pooling amounts that are being removed," he said.
Sousa held a news conference to shoot down the city's claims that it would get $150 million less under the changes, and said Toronto would get $364 million this year to pay for social programs, growing to $500 million by 2016.
The province had already started to wean other towns and cities off of funding for welfare as it uploaded more of the costs, but Toronto always had its own special arrangement and it's now being phased out, said Sousa.
The finance minister knows Ford wants to keep taxes low in Toronto, but said the province must also control costs to eliminate a deficit of $11.7 billion.
"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," said Sousa.
The Progressive Conservatives have said they would stop uploading costs from municipalities until the deficit is eliminated, which Sousa warned would put all towns and cities in a much worse position financially.
Coun. Doug Ford has talked about running for the Tories, which would mean he'd be campaigning to wipe out the very funding programs the city is complaining are being cut, added Sousa.
"I'm not as partisan as some, but the fact of the matter is the Opposition — and the mayor's brother — are advocating for cuts on these very issues that they're asking for," he said.
Part of the dispute centres on a $200 million loan which the province is now waiving after the city missed 16 payments and appeared to have had no plan to repay.
Another disagreement centres on a table the city was given by the province showing the special funding continuing until 2018, but Sousa said that was a "what if" scenario, and no provincial money was committed beyond 2016.
"It was a table illustrating the relative impacts," he said. "Nowhere do I believe that a promise was made that we were going to continue the pooling."
Sousa scheduled a meeting with Mayor Ford on Monday to discuss the situation.
"I need to speak with the mayor...so that we can understand what it is that's happening here, and also appreciate the net benefit that's going to be had for Toronto because we're going to continue to upload other things," he said.
Ford said he was "optimistic" the city and province could work out a deal.
Also on HuffPost