Toronto wants $2.7B from the federal government. Does Olivia Chow have a chance at getting it?

This week, city councillors will dig into the new deal Toronto reached with the province, but experts say questions remain over whether Ottawa will provide billions more in financial relief.

Mayor Olivia Chow set the stage for this week's council debate at a recent Executive Committee meeting. Council must now endorse the terms of the deal and direct staff to execute it.

That will also involve passing on an expensive list of requests — totalling $2.7 billion — to the federal government, which is not a party in the new deal. However, hundreds of millions of dollars that Ontario has committed to Toronto are contingent on Ottawa contributing matching dollars.

"So, you've heard this before, and you're going to hear it again," Chow said last week.

"We are needing the federal government to step up. If the federal government doesn't step up, we are still in trouble."

Chow and Ford announced the new deal at Queen's Park late last month, unveiling a package of spending commitments to help Toronto. Key to the deal is Ontario's upload of the Gardiner Expressway and Don Valley Parkway, which could provide up to $6.5 billion in spending relief to the city over the next decade.

The province has also promised to spend $758 million on new subway cars and $600 million over three years for shelter support. That funding is contingent on matching dollars arriving from the federal government.

New deal seeks billions in federal funding

The deal makes a number of pointed requests of the Trudeau government, ranging from more funding for flood protection in East Harbour to wiping out the city's debt from 2022 COVID-19 expenses. The term sheet also requests $853 million in support for asylum seekers and refugees and $675 million to build more beds in the city's homeless shelters.

"I'm sort of mystified that Doug Ford has come to the city's rescue but the federal government, which tends to be a lot friendlier towards Toronto, is still missing an action," said John Filion, a former councillor.

"We need a lot more from the federal government," Filion said.

"Toronto's the largest city in Canada. The federal government needs to be more involved."

The federal government was at the table as an observer over the past several months, as Toronto and Ontario hammered out this deal, said former councillor Joe Mihevc. He sa says it could be difficult for Ottawa to not make a contribution.

"I think it would be politically unwise for the federal government not to follow suit," he said.

Even this freshly inked deal may not be enough to motivate Ottawa, said York University public policy professor Zac Spicer. Targeted funding to support refugee settlement could be in the cards, he said, but that might be all.

"Justin Trudeau has a much larger political geography to walk through and he has a wider spectrum of problems," Spicer said. "Spending money on Toronto is probably not going to get him the votes that he needs elsewhere."

A spokesperson for Deputy Prime Minister Chrystia Freeland said the federal government welcomes the deal between the province and city, but did not commit to further funding from Ottawa.

The federal government has said it has spent billions to help Toronto since 2015.

"Our government has and will continue to be a strong partner for the people of Toronto, on housing, public transit, and much more," spokesperson Katherine Cuplinskas said in a statement.

Premier Doug Ford and Toronto Mayor Olivia Chow hold a joint press conference at Queen’s Park on Nov. 27, 2023. (Evan Mitsui/CBC)

Highway uploads a win for Chow, experts say

Overall, Mihevc says the deal is a major victory for the city — and for Chow, who has begun to address Toronto's structural deficit with the highway uploads. Hundreds of millions which would have been spent on maintenance of those expressways annually can now be spent elsewhere, he said.

""(They) cost us an arm and a leg as a city," he said.

This may also just be the first step in further difficult debates at council about property tax increases and new revenue tools, Spicer said, adding the deal alone won't be enough to address all of the city's financial problems.

"I don't think this means that the city's out of the woods forever," he said. "The challenge, of course, is that when you buy fiscal room like this, what do you do with it?"

Two major concessions Chow made to Premier Doug Ford might emerge as sticking points during the debate at city council.

Chow agreed to drop the city's opposition to the province's controversial plans to redevelop Ontario Place, something she had pledged to fight during her election campaign. The city's request for a municipal sales tax, which could have raised as much as a billion dollars a year in revenue, was also not part of the agreement. It was a bridge too far for Ford, Mihevc said.

"I don't see this premier as having the bandwidth to be able to make that leap forward," he said. "But we do have to keep that conversation alive and going."

Some of Chow's council supporters will be disappointed she gave up the fight on Ontario Place, Filion said.

"I think the vast majority are smart enough, and astute enough, to know that it was a very good deal and you had to give up something," he said.

Mihevc says he expects councillors will endorse the deal this week by a wide margin, though he said any attempt to tinker with the agreement on the council floor could blow it up.

"To pull the string on the piece that is not making you happy unravels the whole thing," he said.