Ottawa Mayor Mark Sutcliffe says the city is facing a “financial crisis” that raises the spectre of tax hikes and service cuts, alleging the city has been treated unfairly on issues of taxes and transit by the federal and provincial governments.
In a press conference Thursday, Sutcliffe called it an issue of “fairness, pure and simple.”
He said Ottawa has received a fraction of the Greater Toronto Area’s transit support and suggested the federal government owed millions of dollars in back taxes.
The mayor said the city’s transit budget is facing an operating shortfall of $140 million per year for the next three to four years, which would require a seven-per-cent property tax hike or drastic service cuts to fill.
He alleged the federal government has shortchanged the city of $100 million over the past five years on payments in lieu of property taxes on its buildings, which are exempt from local taxation.
Sutcliffe said Ottawa has also contributed over $5,000 per household to Greater Toronto Area transit projects through provincial taxes in recent years, compared to $285 for projects in their own city.
While the province has paid capital costs of major Toronto transit projects, he said Ottawa has ended up paying for more than half of the capital costs of the second phase of the city’s LRT project once cost overruns are accounted for.
He said, as it stands, the city would be better off from a financial perspective not to open and run the next phase of its LRT system.
“It’s time for the federal and provincial governments to recognize the scope of the crisis in our city and to recognize we didn’t create this mess,” Sutcliffe said.
“It’s time for them to step up for Canada’s capital city.”
Sutcliffe said the “number 1 reason” for Ottawa’s transit woes is lost ridership from federal public servants who work less from the office than they did pre-pandemic, noting it could take decades for the city to catch up to ridership forecasts that underpin recent system expansion.
Earlier this year, Ottawa reached a “new deal” with Ontario that saw the province take over certain major costs, including a new downtown police station and Highway 174 ownership, in exchange for the city encouraging more housing development and minimizing taxes.
The city took the federal government to court last year over the issue of alleged shortfalls in payments for lost taxes on federal properties.
This report by The Canadian Press was first published Aug. 8, 2024.
The Canadian Press