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Council receives plan to eliminate 2020 deficit due to COVID-19

June 24, 2020
Council Updates

The City remains in a state of emergency due to the ongoing COVID-19 pandemic. City services are fully engaged in responding to the emergency, resuming services safely and preparing for a potential second wave of the virus. City Council today received an update about the impact on the City’s finances, including a plan to eliminate this year’s COVID-related deficit.

The City has a proven record of sound financial management, but the revenue losses and unplanned costs due to the pandemic have added significant budget pressures. As a result of COVID-19, projections show that the City will run a $192-million deficit this year. To close this year’s deficit gap, the City will reduce operating expenses, leverage reserve funds and adjust capital spending to maintain services and respond to evolving community needs. While these one-time solutions address our deficit this year, they put pressure on City finances in future years.

Given the limited financial options available to municipalities, the City will require funding from the federal and provincial governments to support needed infrastructure investments, transit and operating pressures. Mayor Jim Watson, on behalf of the City, has requested funding through the Big City Mayors’ Caucus, the Large Urban Mayors’ Caucus of Ontario and the Association of Municipalities of Ontario. The City is also actively working with the Federation of Canadian Municipalities on their requests for emergency operating funding.

Council received projections for climate conditions in the National Capital Region until 2100. The City requires these projections to develop its Climate Resiliency Strategy, a key initiative of the Climate Change Master Plan. The projections indicate that Ottawa will continue to get warmer and wetter year-round, with a greater chance of extreme weather and variability from year to year. Winters will be shorter while days that are hotter than 30 degrees Celsius will be more common.

Staff will use the projections to better understand the impact of climate change on our communities, infrastructure, economy and natural environment. Staff will determine Ottawa’s vulnerabilities and assess the City’s adaptation measures, then develop a strategy to prepare Ottawa to adapt to changing climate conditions.

A new Tree Protection By-law with permit fees, fines and processes will come into effect on Friday, January 1. Council approved a motion to accelerate work on this by-law, which had been delayed due to the City’s response to COVID-19. The new by-law reduces the size of distinctive trees in the inner urban area, which will help protect more trees. The City will hire up to four temporary staff – using vacant positions – to enforce the new provisions.

Several transit projects required less funding to complete than budgeted, resulting in an $8.1-million reduction in previously approved capital budget authority. Council approved returning $7.9 million to reserves, with the remainder eliminating previously approved debt.

Council received Hydro Ottawa’s annual report, which notes that the City will receive a dividend of $22.6 million this year. Staff recommend using the dividend to help eliminate this year’s COVID-19 related deficit and to fund Energy Evolution projects.

The City was going to pilot speed cameras near eight schools this past spring, however this was put on hold due to COVID-19. To address an increase in speeding in those areas during the pandemic, Council approved a motion to begin the pilot on Monday, July 13.

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