TORONTO -- Toronto’s municipal government is poised to take a more than $1 billion hit this year due to lost revenue and increased costs associated with the COVID-19 pandemic, Mayor John Tory announced Friday.

At a news conference at city hall on Friday afternoon, Tory outlined grim projections made by the city’s finance staff, who estimate that the municipality could lose as much as $1.5 billion in 2020 if there is a three-month lockdown and six-month recovery period.

Tory described that figure as a “best case scenario,” noting that the number could be as much as $2.7 billion by the end of the year if the lockdown continues over a nine-month period.

“COVID-19 is taking a devastating toll on many businesses’ finances, and of course on the finances of many, many of our residents. The City of Toronto is no different,” Tory said.

“Even assuming we beat COVID-19 as soon as possible and move to restart the city as quickly as we can, we are looking at as much as a $1.5 billion financial impact by the end of this year.”

The city previously pegged the weekly loss in revenue at $65 million and approximately $20 million of that is from the TTC, which has seen an estimated 80 per cent dip in ridership since the start of the pandemic.

“We have kept the TTC running so that frontline health care workers and all essential workers can get to work and get home,” the mayor said.

“And to date, we’ve maintained a consistent number of trains and vehicles even with dramatically reduced ridership and the reason we have done that is so as to avoid overcrowding on those vehicles.”

Other areas where there have been drops in revenue include permit fees and land transfer taxes, Tory said.

“At the same time, we have been waging war as a city against COVID-19, incurring tens of millions of dollars in additional costs to respond to this unprecedented crisis and tragedy and prevent a larger catastrophe,” he added.

Tory called the pandemic “one of the greatest financial challenges” the city has ever faced.

“We will have to rise to that challenge,” the mayor said. “I can tell you that I’m ready to lead in the process in a sensible and balanced and responsible way, working with my colleagues on city council and our excellent city staff.”

He was quick to note that the city will need help from other levels of government, adding that talks are already underway with his provincial and federal counterparts.

“I’ve been very clear with the other governments about this already,” Tory said.

“This will require assistance from those governments in substantial amounts, especially taking into account the constitutional limitations placed on cities, including those the size of Toronto, which itself is bigger than many Canadian provinces.”

Municipalities are prohibited from running budget deficits under rules enacted by the province.

Toronto’s 2020 operating budget, which was approved by council in February, sits at a little over $13 billion.

“I have been speaking regularly with both the provincial government, including (Premier) Ford, Finance Minister Rod Phillips, and Municipal Affairs Minister Steve Clark and with the federal government, including the Deputy Prime Minister Chrystia Freeland and Finance Minister Bill Morneau about these issues,” Tory said.

“And the mayors of Canada’s biggest cities have been sharing information and have been meeting with government officials, including our most recent meeting this afternoon with the deputy prime minister of Canada.”

Tory pointed out that prior to the pandemic, Toronto “led Canada’s economy.”

“We will have to lead it again. We are Canada’s business and financial capital, a growing tech hub in all of North America, and a top ten global financial centre. Our GDP growth was significantly outpacing the national average before the pandemic,” he said.

“The entire country is counting on a strong recovery here.”

Tory said officials have implemented strict public health measures now to help the city get back to normal as quickly as possible.

“I believe the vast majority of Toronto residents are getting the message,” he said of physical distancing measures. “The shorter the period of time that we’re dislocated by the pandemic, the less the damage to the city’s finances.”