Ottawa has pledged $2.2 billion in financial support for Canadian cities and towns that have seen their revenues plunge during the COVID-19 lockdown.
Prime Minister Justin Trudeau said the funding will take the form of an advanced payment of the federal Gas Tax Fund, money that is already earmarked for towns and cities. Municipalities usually receive the money annually in two installments, and Ottawa will be delivering this fund in one payment in June to help improve the financial situation.
Since municipalities can’t run deficits to cover operating costs, Trudeau said Ottawa is working with provincial governments to help inject cash into their coffers. Providing support for public transit systems will be a priority for the federal government, as will other essential services such as trash collection. Trudeau also said this would only be the first tranche of fiscal support to be provided to municipalities.
The Federation of Canadian Municipalities made a public request in April for at least $10 billion in emergency funding from the federal government. Toronto Mayor John Tory said in mid-April a three-month shutdown and six-month recovery period will cost Canada’s biggest city $1.5 billion in a “best-case” scenario, largely due to lost revenue.
Direct support measures from Ottawa during the pandemic lockdown now totals $153 billion. The fiscal package includes wage subsidies, loan programs for companies, emergency benefits for laid-off workers and commercial rent grants.