An audit of Toronto’s finances reveals the city could face a $3 billion shortfall over the next three years as a result of the city’s “ambitious” capital plan.
The audit, which was completed by the firm Ernst & Young, outlines a number of potential savings for Toronto and will be considered at the city’s executive meeting on Wednesday.
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The 49-page report states that in order to fully fund its capital plan over the next three years, which is $13.4 billion, the city will likely face a $1 billion annual shortfall.
“Assuming all current service levels are maintained, this funding plan requires $1.2B over three years to come from city operating surpluses, over and above the capital contributions from current operations (CFC) of $1.4B,” reads the report.
“However, the Free Cash Flow analysis indicates the assumed extra operating surplus will not be achieved, resulting in an overall shortfall of $3B over the forecast period.”
According to the report, the significant finding is that under current circumstances and assumptions – including maintenance of current service levels – the city’s capital plan is unaffordable
The report says the city could afford its capital plan if it deferred or cancelled some of its planned projects and reduced its budget by 25%.
However, doing so would make it “increasingly difficult for the city to build and maintain infrastructure and meet resident needs.”