Toronto pausing planned capital work worth $300 million due to budget shortfall



‘It’s the prudent thing to do’: Mayor John Tory

Ontario Construction News staff writer

The City of Toronto is halting work on dozens of planned capital projects worth about $300 million as council struggles with a budget shortfall expected to top $875 million.

list in today’s staff report highlights dozens of projects that will now be put on hold, including $87 million in TTC capital projects, $87 million in transportation infrastructure rehabilitation, $34.2 million in real estate state-of-good-repair initiatives and $27.7 million on mainly park rehabilitations and repairs.

Mayor John Tory says he will continue to lobby federal and provincial governments for hundreds of millions of dollars in funding to offset financial impacts related to the COVID-19 pandemic.

“All of this shortfall we are experiencing is entirely related to COVID, it is not because we spent too much money or any other failure on our part,” Mayor John Tory said when questioned by reporters an unrelated press conference last week, blaming increased shelter costs and reduced TTC revenues for the shortfall.

Halting capital projects is “the prudent thing to do,” he said.

The staff report warns councillors that if the federal and provincial governments fail to provide additional COVID-19 funding fully address the financial impacts arising from the pandemic, the city’s capital program will be materially impacted.

“In such case, a draw of up to $515 million from the COVID-19 Backstop and a $300 million reduction to the 2022 Capital Budget would be required to maintain a balanced 2022 operating budget.”

Delays in receiving funding commitments will continue to impact Toronto’s “ability to award and deliver capital projects in 2022”.

According to the staff report, programs and agencies have begun preparing for the potential reduction to their capital budgets, and have identified or committed a total of $260 million of projects that are either paused or can be reduced:

  • TTC plans to reduce a total of $87.0 million and is in the process of compiling a final list of capital projects which will be directly impacted.
  • Transportation Services has identified $87 million in capital projects, mainly impacting transportation infrastructure rehabilitation projects.
  • Corporate Real Estate Management has identified $34.2 million in reductions on capital projects, mainly impacting state of good repair projects across various locations.
  • Parks, Forestry and Recreation has identified $27.7 million in reductions on capital projects, mainly impacting park site rehabilitation and state of good repair projects for various buildings and structures.

“High inflation and global supply chain challenges continue to increase the cost escalation on capital project delivery,” the report concludes. “As well, a steep rise in prevailing interest rates has been increasing capital financing costs for new debt issuances.”





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