Pandemic-driven municipal deficits could derail the province’s economic recovery, RCCAO warns
The Residential and Civil Construction Alliance of Ontario has warned that the construction industry and the region’s economic recovery are both at risk if provincial and federal governments don’t collaborate on an additional round of funding early in 2021.
Municipalities are wrestling with significant deficits this year due to the COVID-19 pandemic. As an example, the RCCAO cited the City of Toronto, which will be forced to use $800 million in capital funds “to cover its 2021 deficit in the absence of a new deal.”
“This is a very urgent matter as failure to come up with a deal will result in massive job losses, deteriorating infrastructure and stall any possibility of an economic recovery,” said Peter Smith, board chair at RCCAO. “Governments must once again work together to enable funds to flow and ensure that municipalities don’t have to raid their capital budgets to pay for COVID-19-related operating expenses.”
A separate RCCAO analysis found that 41,000 construction-related jobs are at risk if permits continue to decline due to project cancellations.
“Investing in state-of-good-repair projects will help Ontario recover from the effects of COVID-19 as it will create jobs and spur economic growth,” said Nadia Todorova, RCCAO’s interim executive director. “We know that every dollar spent on infrastructure will have a positive multiplier spinoff effect on the economy.”
