The Ontario government has announced a further injection of cash to help municipal governments balance their books.

The province announced on December 16 that it will allocate an additional $695 million to local governments as part of the federal-provincial Safe Restart Agreement. Launched this summer, the agreement made up to $4 billion in emergency funding available to Ontario municipalities. The first round of funding under the agreement allocated $1.6 billion to local governments in August.

"This joint funding will help Ontario's municipalities recover from the impacts of COVID-19 faster, by helping them to enter into 2021 without operating deficits from this year," said Steve Clark, Minister of Municipal Affairs and Housing. "By ensuring our municipal partners are in a sound financial position to begin the new year, they can focus on keeping their capital projects on track while continuing to provide the critical services their residents rely on." 

Of the $695 million announced yesterday, $299 million is being allocated across all 444 municipalities to help provide more financial relief, as 2021 operating budgets are finalized. An additional $396 million is also being allocated to 48 municipalities that have been hardest hit by COVID-19 and have demonstrated a need for additional assistance in covering their 2020 operating deficits. This is in addition to funding being provided to municipalities to help with local transit pressures.

"The funding confirmed today will ensure the City of Toronto can continue vital services—services that are needed more than ever during the COVID-19 pandemic,” said Toronto Mayor John Tory. “It shows the difference that can be made when all governments come together with a commitment to saving lives, protecting the health of our residents, and doing everything we can to help people and businesses get through this crisis.”

The announcement came as welcome news to the Residential and Civil Construction Alliance of Ontario (RCCAO), which has repeatedly reported on the effects of under-funding municipalities, and the dangers that trend could present to the province’s construction workforce.

“This funding comes at a critical time for municipalities across Ontario and we commend the leadership and co-operation shown by both the provincial and federal governments in working together to address this unprecedented economic crisis,” said RCCAO board chair Peter Smith. “As a result of this funding, municipalities can now begin putting their financial houses in order.”

Research commissioned by RCCAO suggests that a huge number of construction-related jobs are at risk if state-of-good-repair (SOGR) projects are delayed or cancelled. It is urging the federal and provincial governments to step up with a Safe Restart Agreement 2.0 so that adequate funding continues to flow in 2021.

RCCAO suggests that municipal tenders across the province are down and hundreds of construction workers are being laid off as a result. A report done recently for RCCAO by Prism Economics and Analysis suggests that 41,000 construction-related jobs are at risk if building permits continue to decline.

“Today’s announcement is a significant step in the right direction and shows what can be accomplished when governments work together,” said Smith. “However, work still remains to be done and we encourage all levels of government to keep the momentum going and collaborate on a Safe Restart Agreement 2.0 for 2021.”

The province also issued letters to municipalities about the next stages of transit funding for the Safe Restart Agreement. The province is notionally allocating $1.3 billion for municipal transit systems. This is in addition to the $700 million allocation under Phase 1 of the Safe Restart Agreement, which included needs-based top-ups.

Further details about the funding will be available in January.