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Budget Committee Outcomes: COVID-19 & Projections Affecting the City’s 2022 Budget and Business Plan

At today’s Budget Committee meeting, staff provided an update to Council on the financial challenges the City continues to face as a result of COVID-19, including impacts on the 2022 operating and capital budgets and the City’s Stormwater program.

“Mississauga has been in lockdown since November 2020, and the City, along with Mississauga residents and businesses, continue to face significant financial hardships,” said Mayor Bonnie Crombie. “The reality is that public health measures such as the Stay-at-Home Order have severely impacted many service areas. Transit ridership and revenues have significantly decreased, along with revenue and user fees from our recreational and cultural facilities. Our costs have remained the same, while our revenues have plummeted. Today’s update from staff on our financial situation gives us the information we need as a Council to make critical decisions as we navigate this third wave and look towards recovery.”

The Budget Committee update is based on actuals up to February 28, 2021 and provincial regulations as of March 31, 2021. Since the onset of the pandemic in 2020, Council has deferred property tax and Stormwater payment due dates, temporarily suspended parking enforcement, deferred rent payments from tenants in City facilities, deferred collection of the Municipal Accommodation Tax (MAT) and temporarily suspended fines, penalties and late fees for property tax. The City continues to be guided by five updated Financial Recovery Principles when making financial decisions throughout this emergency. Public Health is the first priority, followed by preserving the long-term strength of the balance sheet; coordinating efforts with other levels of government; continually assessing business plans, budget requests and in-year spending; and, complying with legislation.

“The COVID-19 pandemic continues to significantly impact City operations in 2021 and revenue shortfalls will continue into 2022 and beyond. We are using a progressive approach with good financial thinking to support the City’s goals. With this in mind, we have started early, knowing what is ahead will require real-time information,” said Paul Mitcham, City Manager and Chief Administrative Officer. “City staff continues to mitigate the financial impact of COVID-19 where possible, including continued hiring delays, temporary staff layoffs where facilities have been closed, and aggressively managing costs. Prior to the application of the federal-provincial Safe Restart Agreement, the City was in a deficit position of $55.5 million in 2020. Funding received through the Safe Restart Agreement enabled the City to reduce the deficit to zero that year. The continued revenues lost from transit and recreation and other traditional sources of revenue are an ongoing reality. The information we are looking at today will give us the ability to continue our work across the corporation to proactively manage the budget as we go forward.”

“Today’s budget update is part of a staff commitment to provide information to Council on a regular basis. The anticipated year-end deficit projection for 2021 is currently estimated to be $59.9 million. The deficit is primarily due to reduced revenues, particularly in MiWay, Recreation and Regulatory Services service areas,” said Gary Kent, Commissioner of Corporate Services and Chief Financial Officer. “The long-term loss of Payment In Lieu of Taxes (PILT) revenues from the Greater Toronto Airport Authority (GTAA) is projected in 2022. City staff is reviewing potential actions to address future shortfalls. These include a combination of aggressive management of costs, monitoring of revenues, continued advocacy for federal and provincial assistance and use of reserves. The currently announced federal and provincial funding will not be sufficient to fully offset 2022 and 2023 pressures, and PILT revenues will not return to pre-COVID levels for many years if the legislated five per cent cap on PILT revenues continues. The Minister of Finance has said he would call a meeting to assist in the PILT issue and we look forward to that happening soon.”

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