The City of Toronto can’t afford to maintain its vast social housing portfolio without serious financial help, the city manager says.

In an address to about 100 people at University of Toronto, Joe Pennachetti said Toronto Community Housing needs $2.6 billion in repairs over the next 10 years.

Toronto has asked Queen’s Park and Ottawa for $864 million each but hasn’t heard back, Pennachetti said.

The city is also struggling with transit operating costs and would like the province to pick up half the bill, he said.

As he sees it, there are two choices. The province could either cut the city a cheque for $500 million a year or hand over 1 per cent of the sales tax generated within the city, he said.

“We need new tax revenues. We can’t survive any more just on property taxes,” he told his audience at the Munk School’s Institute on Municipal Finance and Governance.

While Mayor Rob Ford wants to reduce the burden of the municipal land transfer tax, Pennachetti said the $350 million a year it brings in has been key to balancing the books.

The $60-a-year vehicle tax, worth $50 million annually, also helped, said Pennachetti, who indicated he didn’t agree with Ford’s insistence on getting rid of it in early 2011.

“There was a personal vehicle tax in the previous administration and the new council in its wisdom decided to cancel that tax, much to my chagrin,” he said.

While the city government has its fiscal challenges, the city itself and particularly the downtown area are doing well, he said.

The 17-square-kilometre downtown area, representing half the city’s economic output, a third of the city’s 1.3 million jobs and a quarter of the tax base, is in the midst of a residential renaissance, he said.

The planning department said residential towers in the pipeline total 11,868 floors or the height of 74 CN Towers. Planned office construction totals 1,736 floors or 13 CN Towers.

“Bottom line, massive growth continues in downtown Toronto. The message is the growth is not stalling. We’re going to continue for at least another 10 to 15 years.”

Moderator Anne Golden, former president of the Conference Board of Canada, asked Pennachetti what it has been like working with Ford.

Golden noted media reports that Pennachetti had been pressured by the mayor and Councillor Doug Ford over a company’s pitch for an enhanced tax break.

When Golden asked how the “circus atmosphere” has affected his job, Pennachetti replied that: “From day one, I wasn’t even sure if I was going to be city manager into the new term.”

Pennachetti went on to say he felt pressure from the mayor in the wake of Ford’s election victory in October 2010. On the tax break request, Pennachetti said he refused to go along.

“From the very beginning, in the one meeting with the proponent, I said no. I knew the answer was going to be no and I told him that verbally and I confirmed it in black and white within a week.”

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“To me it’s pure ethics. You have to ensure your principles are a priority.”

Golden praised Pennachetti for integrity.

“I just thought that was a tough situation to be in but kudos to you and to the staff for resisting,” she said.