Municipalities Need Billions In Crisis Relief
Municipalities WIll Need Billions Of Dollars For Every Day Bottom-line Requirements
Kitchener, Ontario - As federal, provincial and territorial governments negotiate “safe economic restart” funding agreements, the City of Kitchener is supporting the Federation of Canadian Municipalities (FCM) call for four bottom-line requirements to ensure funds urgently protect frontline services for Canadians and support a nationwide economic recovery.
"Municipalities provide services residents depend on, like clean water, public health, and roads and trails. But these services are at risk with cities and communities in financial crisis,” said Kitchener Mayor Berry Vrbanovic. “We welcome the Prime Minister’s safe restart commitment, but COVID-19 has left a big deficit in our budget, and municipalities of all sizes need federal and provincial funding support to continue providing essential services.”
With revenues collapsing and additional costs related to COVID-19, cities and towns across Canada now face $10-15 billion in non-recoverable losses. To protect Canadians from damaging cuts or significant property tax increases, municipalities have appealed for emergency operating funding, which will require contributions from federal and provincial governments. A federal restart plan can lead to a solution—protecting the frontline services and recovery Canadians need—but only if it meets four key requirements:
Four Key Requirements:
- Municipal funding must be sufficient. Nationwide, municipalities require at least $10 billion in emergency operating funding. Federal and provincial/territorial governments will need to work together urgently to achieve this overall.
- Funding must be clearly identified. Starting with the broader $14 billion safe-restart commitment to provinces and territories, the allocation of federal funds intended for municipal needs must be clearly specified—so local leaders can make informed choices on the ground.
- Funding must protect services Canadians rely on. That includes frontline municipal services like fire, ambulance, public transit, clean water and shelters. Funding must address both initial COVID lockdown costs and the implications of a gradual restart.
- Funding must reach municipalities quickly and directly. Only an allocation-based funding mechanism can ensure this, and we strongly urge leveraging proven tools like the Gas Tax Fund and the public transit stream of the Investing in Canada Infrastructure Program (directed to operating costs).
"Residents and businesses are still struggling, and significantly cutting services or increasing property taxes is exactly what we don’t want to do now or during an economic recovery,” said Vrbanovic. “Strong municipalities will be key to any economic recovery. We need to work together to invest in Canadians by supporting municipalities, so we can come out of this pandemic even stronger.”
Pushed To The Brink - Municipalities seek emergency funding
Ottawa – Pushed to the brink of financial crisis, municipalities nationwide are calling for emergency federal funding to continue supporting Canadians through the COVID-19 pandemic. That call comes as an urgent written appeal today from the Federation of Canadian Municipalities (FCM).
"From turning arenas into safe shelters to deferring property taxes, municipal leaders are working flat-out to support Canadians through this pandemic," said FCM President Bill Karsten. "But with new expenses, staggering drops in revenue and no freedom to run deficits, municipalities need emergency funding to keep essential services going strong.
FCM’s data shows municipalities facing a minimum of $10-15 billion in near-term, non-recoverable losses due to COVID-19. That figure includes foregone property taxes, utility charges and user fees—including an estimated $400 million each month from lost transit ridership alone. At the same time, municipalities are taking unprecedented steps to support public health and safety.
Cities and communities are major economic drivers for Canada. The emerging crisis represents a destabilizing force for our national economy and the daily lives of all Canadians. In the absence of significant action from either provincial or federal governments to address severe revenue shortfalls resulting from the COVID-19 pandemic, FCM is calling on all orders of government to work together in partnership, starting today with an appeal to national leadership.
To fill the gap FCM urges at least $10 billion in emergency operating funding. This includes at least $7.6 billion in direct federal allocations to all municipalities, plus $2.4 billion for those with transit systems. This core would be supplemented with additional funds for municipalities facing extraordinary challenges supporting isolation and good health among vulnerable populations.
"Emergency funding for municipalities is the next step to get Canadians through this pandemic," said Karsten. "From fire and ambulance to safe transit for essential workers, this is about delivering vital services when people need them the most. We’re all in this together, and our municipal-federal partnership can help carry Canadians through this crisis—and be ready, when the time comes, to drive the economic recovery they’ll be counting on."
The Federation of Canadian Municipalities (FCM) is the national voice of local government, uniting nearly 2,000 members representing more than 90 per cent of Canada’s population.