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Newsstand: March 31, 2015
If there is one thing to be gleaned from today's headlines, it's that if people ran their personal finances in the same way that governments ran theirs, most of us would either be destitute or in jail. In the news: the provincial government will not cover an $85-million shortfall on the Spadina subway extension, a new report says the future of the TCHC looks grim without a $7.6-billion investment in property repairs, and the City remains powerless to collect $4 million in property taxes from the federal government.
The provincial government says that it will not cover the costs of an $85-million shortfall facing the Spadina subway extension project. According to a report by City Manager Joe Pennachetti, the shortfall comes from an $870-million trust fund set up by the provincial government that was projected to grow to just over $1 billion as it earned interest, but failed to do so. The provincial government says that the original agreement never included a stipulation that they would cover any shortfalls if the trust fund failed to hit its original projections, and so it will not increase its investment in the project just because the City thinks it should. This means that the City of Toronto will be on the hook for an extra $51 million to see the extension through to completion. This, of course, is in addition to the $90 million it’s already meant to pay in overruns on what is arguably the subway construction project from hell.
That’s not the only bad news for the City. According to a new study released on Monday, if the Toronto Community Housing Corporation does not get a $7.6-billion investment to its capital repair plan, the consequences look pretty bleak. The study says that without $5 billion for the current 10-year revitalization plan and an additional $2.6 billion to cover additional urgent repairs to properties, less than 10 per cent of TCHC homes will remain in good to fair condition by 2023. More than 7,500 homes would also be forced to close due to failing conditions within the same timeline, according to the report. The City of Toronto appears to be using the report to make the case that it desperately needs an infusion of cash from the federal and provincial governments to help cover the cost of some of these urgent repairs, to which we say: Don’t count your chickens…
But the TCHC might not want to count on money from the federal government if its track record of paying down municipal property tax bills is any indication. A new report by City staff reveals that crown corporations owe the City $4 million in payments in lieu of property tax—and the city remains virtually powerless to collect the cash it is owed. According to the report, the City has exhausted all collection efforts on properties including a federally-owned building at 75 Sheppard Avenue West, where a balance of just over $614,635 in unpaid taxes and penalties has been on the books since 1998. As the report puts it, “Municipalities are restricted from using certain collection actions such as tax sales on federally-owned property.” So, basically, good luck on ever seeing a dime of that money, Toronto.