Toronto Prefers Bank Loan over Provincial Loan

This article was last updated on April 16, 2022

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The City of Toronto has announced to have decided against borrowing money from the province in order to help cover up an $86-million shortfall in Mayor John Tory’s proposed municipal budget. The announcement was made by Mr. Tory on Thursday, when he also explained that the terms set for the $200-million line of credit were the primary reason of his decision.

In his remarks, Mr. Tory explained that “after detailed examination of their proposal, which would require among other things the security of city-owned land and future provincial gas tax transfers put up as security, we have concluded that the city can do better on its own.” Furthermore, Mr. Tory revealed that the city has decided to take an $86-million bank loan that will have to be repaid with interest. He alleged that the bank loan to acquire the $86-million was the preferred option when compared to gutting municipal services or hiking the property tax to a total of 6.25 per cent.

However, several Tory’s critics have warned that the bank loan is only delaying the inevitable and taxes will eventually have to be raised. Coun. Gord Perks stated that “my advice to Mayor Tory is sure, it would have been great if you would have been able to deliver on a promise of tax increases at or below inflation, but now you can’t.” Perks alleged that “this approach may carry other costs. It may well mean that we will have to press pause on capital projects that can wait,” adding that “indeed, there are going to be some difficult decisions in the years ahead.”

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