The pandemic will cost Toronto at least $1.5 billion in 2020, city officials estimate.

That is the best-case scenario, Mayor John Tory said Friday during a city hall press conference. The worst-case scenario — a prolonged lockdown — would create an unprecedented financial hole of $2.7 billion.

“This is one of the greatest financial challenges this city has ever faced,” Tory said.

He said the federal and provincial governments will need to step in to help.

“We know that when Toronto does well Ontario does well and Canada does well. The entire country is counting on a strong recovery here and we want to lead that charge for us, but also for all Canadians. I am determined that we will deliver that.”

He did not rule out that the city would need to reconsider projects like the $1-billion Gardiner Expressway rebuild.

The $1.5-billion financial hit assumes a three-month lockdown of services and strict social distancing; a six-month recovery period where revenues like TTC fares won’t be at budgeted levels right away as the city increasingly comes back to life; and the added costs during the pandemic, like additional shelters for those experiencing homelessness.

Of that estimate, $938 million is the result of the lockdown and $590 million during recovery.

That amount could fluctuate if the lockdown is extended or reinstated or if the recovery phase ends quicker or lasts longer than anticipated.

The $2.7-billion estimate, which assumes a nine-month lockdown and a 12-month recovery period after that, is only for costs in 2020. If that scenario became a reality, it would continue to cost the city into 2021.

Earlier, city officials calculated Toronto would lose $65 million a week during the pandemic from a combination of estimated costs and revenue losses. The new number takes a recovery into account and extrapolates to the end of the year.

The single largest driver of the city’s financial troubles is a major dip in TTC revenues — an estimated $23.5 million a week, largely caused by a major decline in fares. There is a forecasted 85 per cent dip in ridership in April compared to what was budgeted for the month.

City manager Chris Murray previously said that surplus funds the city has from 2019 and other strategies were sufficient to cover the financial gap until June 1.

Murray said Friday that beyond June 1, the city would be able to manage in the short-term, noting the upcoming end to a 60-day property tax deferral earlier implemented to help struggling residents and businesses.

But the city will need the provincial and federal governments to intervene to cover much of that billion-dollar gap, Tory said. Municipalities, under provincial laws, can’t go into debt to pay for operating expenses.

On Friday, Premier Doug Ford did not answer directly about whether he would allow municipalities to run deficits to deal with the COVID-19 financial fallout.

“Well, I know the Minister of Finance, he’s been working on a plan. I’ve had this discussion with Mayor Tory, and Minister Clark as well is working with all municipalities — all 444 of them,” he said. “I know they’re struggling, but all levels of government right now are struggling financially based on this COVID-19 and we’re going to do whatever it takes.”

Tory said later that he didn’t think those permissions would be a “meaningful solution” because the city would still need a way to come up with the money.

Tory was asked Friday about whether the city should reconsider pricey capital builds like the Gardiner Expressway — a controversial decision to rebuild a hybrid version of the eastern curve connecting to the DVP pushed by Tory in his first term.

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Tory, who has staunchly defended that council decision over the boulevard alternative that in 2016 was estimated to cost half the amount, or about $500 million less, said staff continue to review capital projects in light of the pandemic.

“We haven’t begun yet to review the future capital budget, that will come … as we have to address the length of time it’s going to take for us to experience a complete recovery,” he said.

It’s not clear how much switching to the boulevard option would cost today.

With a file from Robert Benzie

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