The Toronto Sun’s Sue-Ann Levy writes about a decision made by the Executive Committee on Monday following an amendment by Councillor Mike Del Grande:
[Del Grande] proposed that city officials start to phase out the capital loan guarantees once they expire — and not continue to roll them over again. He also suggested once the Waterfront’s Corus building sells and their $128 million outstanding loan is repaid, the maximum of capital loans given out be limited to $125 million in total. Both motions were approved by executive committee.
“We’re not in the business of providing loan guarantees,” Del Grande said. “It is not a core activity… simple as that.”
Added Mayor Rob Ford: “I don’t think we should be in the business of loaning money … we’re here to deliver services, I think that’s what banks are for, to loan money.”
Phasing out loan guarantees would impact the financial situation of institutions like the Evergreen Brickworks, Artscape Wychwood Barns, Ricoh Coliseum and, after 2020, BIXI.
Ford says that the city should not be in the business of loaning money which, actually, is true. The city shouldn’t and is not in the business of loaning money. What the city does is guarantee loans taken out by private companies. It’s like your parents cosigning your apartment lease when you were in college — they’re not giving you any money, but they’re on the hook if, for whatever reason, you skip town and stop paying your landlord.
That Ford and Del Grande are railing against this practice at the same time they have people working on a deal to get the private sector to pay for the Sheppard Subway is a massive contradiction. If the city isn’t going to provide capital loan assistance for a subway project, the prospects of such a plan actual coming to fruition are even dimmer than we thought.