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The issue at hand here is that the City of Toronto is essentially going bankrupt. The reason, the city asserts, is that the federal and then provincial governments have pushed expenses down all the way to the city; a good example is that cities in Ontario are now paying for social services (something the province once did). The Federal government just posted a CA$13 billion surplus, and the province has their own surplus as well; none, both have said, will go to help the City of Toronto with its near half-billion budget deficit.
Of course, the higher levels of government take a huge amount out of Toronto in taxes to subsidize the rest of the country. Torontonians are feeling a bit jaded knowing this now that there's such a huge budget shortfall for the city.
So the City of Toronto has been campaigning for both the province and federal governments to help out. The One Cent campaign was part of this, demanding more money from the higher levels of government. My guess? The demand for royalty payments from the mint is a political ploy from the federal government to slap Toronto on the wrist for, I'm guessing, rocking the boat.