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“We have concluded the city can do better on its own,” Mr. Tory said on Thursday. “We thank the province for its offer, but in the end, we will take care of our own house.”

The decision not to take the province’s line of credit, which required the security of city-owned land and future provincial gas taxes, was made Thursday morning and the news delivered to Queen’s Park 15 minutes before it was announced publicly.

The alternate proposal floated by city staff is to use a portion of property taxes that usually are reserved for capital projects to plug the hole in the operating budget. The city isn’t allowed, by law, to use a loan to balance its operating costs, but it can take out a loan for capital costs, which is what the bureaucrats are suggesting.

“I am not going to mince words and say this is normal,” city manager Joe Pennachetti told councillors at a budget committee meeting Thursday. “We have never done this before.”

He called it a “responsible” approach, nonetheless, that allows the city to spread out the impact of lost

provincial funding, which is $129-million over the two years. Otherwise, it would take a 3.4% property tax hike to cover this year’s $86-million gap, in addition to the 2.75% already built in to the budget.

But councillors at the budget committee demanded to know why the city was scrambling at this late hour to fill a hole that the provincial government announced would be coming two years ago. And they criticized city bureaucrats for presenting a budget that assumed provincial assistance at all.