Doug Ford accuses Toronto of mismanaging its finances in housing bill dispute

Mayor John Tory and Premier Doug Ford appear headed for a showdown over the financial impacts of Ontario’s new housing bill.

A day after Tory demanded the provincial Progressive Conservative government make an ironclad promise to fully compensate Toronto for any development charge revenue the city loses as a result of the legislation, Ford asserted the bill will have no ill effect on municipalities’ bottom lines, and accused Toronto of mismanaging the revenue it already collects.

“I don’t believe it does at all,” Ford said at a press conference Thursday when asked if his government agrees that Bill 23 hurts cities’ finances.

The premier, a former Toronto councillor, suggested the city has room in its budget to absorb any impacts of the legislation.

“I spent four years down there as part of the audit committee, the vice chair, I know there’s waste down at the city and we want to work co-operatively with all the cities and municipalities,” he said.

“Our goal at the end of the day is to build homes, affordable homes, attainable homes, and we are not going to budge on the development fees and I find it staggering that the cities, and I’m not just pointing out Toronto, would actually want to charge on affordable and attainable homes.”

The Ford government passed Bill 23 on Monday, with the stated aim of easing the housing crisis. Among other provisions, it reduces or eliminates development charges on some new developments, which the province says will lower prices for homebuyers, and encourage construction.

But Toronto estimates the bill will cost the municipality $230 million a year in development fees and other revenue earmarked to pay for infrastructure new housing requires, like sewers, water lines and roads. Other municipalities have expressed the same concerns, with the Association of Municipalities of Ontario (AMO) predicting the legislation will cause a $5.1-billion revenue shortfall for its 444 member cities over nine years.

On Wednesday, Ontario Municipal Affairs and Housing Minister Steve Clark sent a letter to Tory saying the province would commission a third-party audit of Toronto’s finances to help determine the effect of the legislation, and is committed to ensuring the city is “made whole” if “there is any impact” on its “ability to fund housing-related infrastructure and services because of Bill 23.” Clark sent a similar letter to the AMO.

At a press conference Wednesday, Tory expressed optimism at Clark’s pledge, but said it was “not as clear and explicit” as the city needs. The mayor said he wanted the province to assure Toronto it will pay the “dollar for dollar” difference between whatever development charge revenue a project would have generated before Bill 23 was passed, and the fees it will generate after Bill 23.

“If the Ontario government wants to offer that break to developers, they should pay for it, and not take it out of the pockets of municipalities and their residents,” Tory said.

“In Toronto, we simply can’t afford to be without that money.”

The mayor said he would use all the tools at his disposal to secure the funding, including cataloguing the projects in Toronto ridings represented by PC MPPs that the city could no longer pay for because of reduced development fees.

“They will see, it’s the local library, it’s the local community centre, it’s the transit service, and on the list goes,” he said.

Ford’s government has argued Toronto’s financial situation is not as dire as Tory describes. In his letter, Clark said the city has used development charges to amass a reserve fund of more than $2.3 billion, and planned to increase it by 46 per cent over the next two years.

Tory maintains the funds in the reserve are allocated to support specific developments, and the city needs additional development revenue to support new projects.

The mayor said Wednesday he was confident the audit, the terms of which will be jointly agreed on by the city and province, would “debunk any misunderstandings around development charges.” He said “this notion that’s been created that we’re sitting on some piggy bank of money that we can just allocate to look after anything, it’s just nonsensical.”

Ben Spurr is a Toronto-based reporter covering city hall and municipal politics for the Star. Reach him by email at bspurr@thestar.ca or follow him on Twitter: @BenSpurr

SHARE: