Mayor says Ottawa facing 'financial crisis,' blames feds for shortchanging city

Ottawa Mayor Mark Sutcliffe called a news conference Thursday to decry a financial crisis in the city he says could force tax hikes, fare increases or drastic service cuts — and he blamed it on the provincial and federal governments.

«This is a critical juncture for our city's finances … I can't overstate how important this is,» he said.

The first-term leader said federal cuts to transfers meant to compensate for property tax revenue have cost the city almost $100 million, while the federal government's decision to allow public servants to work from home part-time has ravaged the transit system.

Sutcliffe said OC Transpo is facing an operating deficit of $140 million over the next three or four years.

«That puts us in an absolutely impossible situation,» he said.

«There are no easy answers to a problem like that. Without getting our fair share, without getting help from the other levels of government, it's going to be very painful. We'll have to raise taxes and transit fares enormously, or we'll have to cut service drastically.»

Transfers over taxes

The federal government doesn't pay property taxes for its buildings, but instead compensates the city through payments that are meant to capture the value of its properties.

Sutcliffe said the federal government has been unilaterally deciding its properties — many of which are vacant or underused — are worth less, and transferring far less than it should.

«Imagine if I told you as a property taxpayer that you could decide how much you pay … Wouldn't that be a great deal? Well, that's exactly what the federal government gets to do.»

He said the city «did the math» and determined that the federal government should be paying about $95 million more. He said the burden of that lost money