Ottawa

Pandemic plunging city into unprecedented financial hole

The coronavirus pandemic could carve a hole of more than a quarter-billion dollars in the city's finances if it drags on until the end of the year, councillors heard Wednesday.

No immediate plans to cut staff or raise property taxes, councillors told

Transit ridership has dropped more than 80 per cent during the COVID-19 pandemic, accounting for a significant chunk of the lost revenue. (David Richard/CBC)

The coronavirus pandemic could carve a hole of more than a quarter-billion dollars in the city's finances if it drags on until the end of the year, councillors heard Wednesday.

"This is an unprecedented situation, and one the city has never seen or been in before," chief financial officer Wendy Stephanson said during a council meeting held by teleconference.

Stephanson's team is planning for three scenarios: If the shutdown related to COVID-19 lasts until the end of June, the city estimates foregoing $102 million in revenue. That grows to $185 million if it lasts through September, and $273 million if the COVID-19 response extends to the end of 2020.

More than half the losses are due to a drop of more than 80 per cent in transit fares.

Strained departments need help

The city is saving a few million dollars a month by putting recreation and library part-time staff on unpaid leave, but city manager Steve Kanellakos said there are no further plans to cut staff.

Instead, the focus is on shifting municipal employees to departments that are "stressed by surge demand," Kanellakos said, and keeping a "reserve bench" if employees get sick or need to take leaves of absence.

"We're balancing our financial needs with the need to keep delivering city services with a work force that quite frankly is fragile right now," Kanellakos said.

Community and social services staff have been focused on how to help the city's most vulnerable maintain physical distance by moving homeless people out of shelters, for instance. Staff have found rooms for more than 30 families in motels, and need another 200 beds, council heard.

Employees redeployed to OPH

The city might also redeploy 1,000 employees to Ottawa Public Health to deal with calls from the public, and to help nurses with their interviews of people who have had lab-confirmed cases of COVID-19.

As for other savings, staff are looking at which construction projects the city can halt. Like mayors in Canada's other big cities, Jim Watson is also looking for financial help from upper levels of government.

The city is even asking the province for the right to carry a deficit at year end, something municipalities are normally not allowed to do.

Watson said the city wants to try all these potential solutions before asking residents for more property taxes in 2021.

"Some people have said, 'Raise property taxes 10 per cent.' Well, that then hurts the same people who are struggling over the last couple of weeks to make ends meet," Watson told reporters Wednesday.

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