1. Royson James: “if the city is to thrive and become robust and innovative to compete against well-financed world cities, its ratepayers must be persuaded to shoulder slightly higher taxes – with designation of the extra revenues tied to an identifiable renaissance effort.”

    And the last part is the most important part – the new money must not merely prop up the existing structure by relaxing on value for money. Citizens must feel they are getting something tangible rather than more plans and no delivery – paying more for no extra benefit is why the Ontario Health Tax is so reviled.

  2. Mark, the Ontario Health Tax is a totally different animal than the new taxes Miller is trying to implement.

    First, the OHT is a regressive tax that doesn’t even try to reach a public policy goal. The land transfer tax hits people when they have money and is determined based on the cost of the property. The vehicle registration fee, while a flat tax, is relatively minor in its impact on individuals and is related to a public policy goal.

    Second, the OHT didn’t just not improve services for Ontarians, it de-listed services.

    And while we’ve been through this debate before, Mark, since you’re starting it up again, I’ll reiterate that it makes no sense to build a hallow city. We can’t expect that the new revenues will build more when the foundation it would be building on is falling apart. Would you add a second floor to a community centre if the first floor was falling to pieces and, because of service cuts, isn’t being used optimally?

    Once the city has begun to repair the infrastructure that’s been damaged over the past decade, I whole heartedly agree that city building should be the priority. However, to pretend that we can just start throwing zillions at new projects as soon as the new taxes are adopted would be almost as irresponsible as the story sold to Torontonians by Lastman and, until recently, Miller that reassured residents that the City’s financial position was stable.

  3. Adam – the foundation will be fixed by *uploading*. We already levy (just) enough taxes to fund the existing city but downloading eats into them at a rate of $250-500m p.a. depending on who you ask and forces cutbacks and reserve raids.

    Imposing taxes *to fix the foundation* rewards downloading as it means the province can get away with the status quo but in the end no new LRTs will be built, no new parks created, no new precincts constructed.

    I realise you sit on a city agency board and thus might feel unable to criticise the Mayor’s position but that’s not licence to come after everyone who doesn’t share it and misrepresent theirs.

  4. That was a low blow, Mark. In the past you’ve demonstrated that you have intelligent and well-reasoned opinions that can stand on their own without the help of cheap shots. I hope we can continue in that tradition. However, if you’re going to make comments in a public forum, I will not refrein from responding to them if I feel I’ve got something to contribute.

    Moving on…In theory, I agree with you that all efforts should be made to get the provincial government to upload the services it downloaded. The problem is that until Toronto achieves that, we’d be forced into cutting vital services. As a member of the Library Board, I couldn’t make cuts like that just to send a message and its something I hope Council wouldn’t do, either. (Even though they’ve been portrayed as politically motivated, I see the cost containment measures Miller directed Hoy and the ABCs to undertake differently and I’m happy to explain why, if you like.)

    So let’s play a hypothetical game for a second. Pretend that you hold 23 votes on Council and assume that the next Premier of Ontario promises to give Toronto $200 million in 2008 by the end of the election campaign (I’m not saying I believe it’ll happen but in another thread you sounded very optimistic.) If this were to happen, the City would still be short $375 million in 2008. Then let’s assume Council adopts the taxes in October and City staff estimate that they can still milk $300 million from the taxes in 2008.

    If this were the case, would you advocate for Council to do $300 million of new spending instead of reducing the budget gap to $75 million (equivalent to a 5% property tax hike and relatively minor service cuts)? If your response is yes, how would you position your decision so the Premier can’t simply brush off future requests to continue reversing downloading by pointing to all the new spending that was done? Or maybe you see an entirely different scenario taking place?

  5. For everyone else – sorry this is long, but he asked and apparently I can’t help myself.

    Adam – let’s deal with your hypothetical rather than your wounded sense of honour – I’d prefer to meet you over a drink and deal with that than go back and forth on this board.

    First of all, it’s not a question of optimism. In any bargaining situation, you hold out for the best offer. Adopting the taxes immediately would have been taking the first offer, i.e. nothing. Not adopting the taxes has now gotten a firm offer of hundreds of millions of dollars a mere few days after Sorbara said “no bailout”. So the city is already better off than it was before, at the cost of maybe 2-3 months worth of LTT if, as I expect but obviously don’t wish, the LTT passes in October.

    Now, you might think “well, at least in 2008 we don’t gain much since we gave up the 2-3 months of revenues” – true, but given our increased cash flow we are now in a better position with our lenders.

    Even then, as I said, this is the second round of bargaining. First round nothing, second round something. We have yet to see what the Tory second round offer (first round a review, i.e. nothing) but if it’s a credible number then McGuinty will be under pressure to respond. So we keep playing them one off the other until October and we see who wins – and if it’s a Lib or Lib-NDP government we’re already ahead.

    Now – how do I make up the difference in revenues over expenses? There is to my mind no single way – it has to be holistically through the system. I’d do it like Shirley Hoy did with the service cuts – you look for each department for an increase in revenues rather than *solely* a decrease via cuts.

    Some examples: I would post a notice on every courthouse door and every other Ontario download indicating how much property tax is improperly paying for its upkeep. I would lease out (but retain ownership of) any city asset such as TPA parking lots and golf courses. I would abolish free parking at City Hall except where specified in employment contracts and direct that no new contracts allow free parking – thus bringing in revenue from freed up spaces. I’d raise the fine for illegal billboards as high as a court would let me and hire Rami Tabello to bring in the dough [note – don’t blame Rami for my views, I just like his].

    I’d charge for TTC Metropass parking lots but look at making it free to people who paid for the Metropass express stickers (additional $30/month). I’d reduce the incentive for signing up to the MDP to only a dollar or two – getting it delivered to your door costs you more for most things, not less.

    I would tell groups supported by Toronto grants that no group would be funded beyond three years from now to make room for new groups to get a chance (the same principle as George Soros’ Open Society Institute) and work with businesses to fund the existing groups beyond that time. I would invite CUPE and ATU to public meetings to explain to the public why summer job students should earn union wages.

    I would cut North York snowploughing and Etobicoke leafclearance, with exception of seniors in the former. I would look at ways of pressuring businesses behind street trees to water them to free up tree employees for planting new trees, just as they are responsible for cleaning their sidewalk of snow.

    I would replace the various city bulletins I get in my mailbox from departments such as waste and water with a single city newsletter. I would demand that companies like Golden Pages offer homeowners an advance opt-out rather than dump a huge whack of paper on each doorstep that must then be recycled at city expense.

    For new revenue, I would impose a plastic bag tax of 20 cents per bag with the aim of ramping to the Euro0.22 tax in Ireland to go into environmental improvement projects not likely to be funded in the near term. I would impose a parking tax on all commercial parking spaces in downtown and use the money to fund police time to keep transit routes clear which would in turn save TTC money by reducing congestion. I would print on each traffic ticket issued that the money goes to Ontario, not Toronto as a way of raising public consciousness of that issue. I would impose parking charges on ALL city parks rather than exempt some and direct the revenues to ensure adequate transit.

    I would start by adding a cigarette tax since cigarettes have an impact on street cleanliness and ringfenced it to Toronto Public Health programmes and see how businesses in the Entertainment District could be made contribute to the costs of policing and whether utilities and others pay enough for police officers to monitor traffic around road cuts.

    I would seek higher development and property taxes in upgraded transit corridors, ringfenced to transit construction. I would stick a poster on the side of every WheelTrans bus saying – “if the US pays 80 percent of paratransit, why can’t Canada?” and basically bring a WheelTrans bus to every photo-op Harper or Lawrence Cannon makes in Ontario.

    Now, this is just the stuff I have thought of off the top of my head, with no request to citizens to think of others. At the end of that I might still need a figure, it might be 5 million, it might be 50 million, it might be 150 million. Without access to TTC, TPA and city budget documents I can’t say how much.

    Only then would I impose LTT and MVT. I would only impose them to the exact level the City officials told me was needed to fill the gap. I would impose MVT to the $40 offered in public consultations rather than the $60 imposed afterward, and only impose LTT to the remainder as I think one tax is mildly counterproductive and one is just stupid and discriminatory.

    For LTT I would not cut the top rate, instead I would raise the exemption level to take more and more houses out of the tax net, so first time buyers of second hand homes below $300,000 (66,000 below the average house price) would pay little if anything whereas under Miller’s plan they would pay $3,000. I would also impose an LTT surtax on any residential property *resold* within a given period of time to catch flippers but to allow young families to renovate older properties and trade up in a couple of years.

    I would send a letter to each person who paid LTT apologising for levying the tax. In the spirit of McGuinty “Health Premium” governance I’d call it the “Ontario Services Shortfall Tax”.

    I would tell them that the reason they are paying the tax is because Toronto is precluded from levying or sharing in PST and income taxes which fall more equally across all citizens. I would tell them how much Ontario makes from festivals like Caribana and how Toronto sees virtually none of it. I would tell them that Toronto is committed to moving to charging for impacts on the City rather than merely being a citizen, and as soon as we force Ontario to upload the last dime and to share fair taxation, the LTT and MVT will go.

    In order to enforce that I would have the LTT and MVT authorising bylaws written with a sunset clause forcing separate reauthorisation every year. That’s how I would ward against re-downloading, not press releases and a furrowed brow on CP24 but by speaking directly to the people affected.

    Obviously initially it’s not the purest form – more tax, more service but virtually every offer we get might involve a phase-in and people understand that. The ringfencing of parking and environmental taxes will be a significant precedent. In the meantime I would go into every ward and sell it face to face, even if it meant spending days covering the city, levelling with people and facing down the “no tax at any price” brigade rather than hiding behind Staff.

    Sorry you asked?

  6. I’m not sorry I asked. Several of your points/ideas seem agreeable to me at first glance and deserve City staff’s attention. But I’ll direct my comments to what I don’t agree with.

    On negotiating strategy: The trouble I have with your approach is not having a Plan B that would avoid slicing the heart out of public services in the event of failure (or delayed success.) In a corporate setting where decisions aren’t open to the public it would be easy to have a contingency plan while driving a hard bargain. But when it comes to municipal government, we could be shooting ourselves in the foot for many years if we bet the house on government uploading since some contingency plans (like the taxes) could take many months to get in place.

    On City grants: I sit on the board of two organizations that receive City grants. So first off, I can tell you that no one has guaranteed funding for more than one year at a time. Second, the red tape that is in place to keep organizations accountable is already a major hassle for smaller organizations because the City doesn’t fund them to be able to afford any sort of administration. So though I’m not opposed to ensuring taxpayer money is accounted for thoroughly, I can say from experience that adding any more hurdles for those organizations to overcome would come at a significant to the communities they serve. Plus, I find the notion of relying on the private sector to determine which organizations get grants very problematic. If corporations were relied upon for funding instead of the City, due to recent calls to criminalize panhandling, a private sector company funding a homeless shelter may decide to “redeploy” its resources to a different type of organization.

    On the taxes: Instead of putting a sunset clause on the LTT, I’d rather keep the LTT and decrease the amount people pay in property taxes. I still don’t quite understand how you see the LTT as discriminatory but surely it can’t be more objectionable than the property tax. And first time home buyers, whether the property is brand new or resell, will get a rebate for the first $2,000 they spend on LTT, which I believe is a full rebate for a home up to $400,000.

    On ringfencing: I disagree with this approach on principle, with the exception of user fees. I think there are ways to maintain accountability for money without predetermining what it’ll be spent on. That’s the job of City Council and city councillors will be held to account for those decisions.

    On Calgary’s financing model for pet enforcement: I believe that the fee structure for bylaw enforcement on this was based on a cost-recovery model here, too. What I’m not sure of is whether the revenue from bylaw enforcement will also cover the cost of designating off-leash areas.

  7. Adam – first time buyers DO NOT get a rebate on land transfer tax for resale properties. Please don’t mislead people, it’s bad enough that City Councillors don’t know how this works. There are very few new home developments in Toronto that aren’t condo boxes, and renovating rather than demolishing should be encouraged I would have thought.

    Secondly, the Ontario LTT on a 300,000 house is $2,975. Google “Ontario Land Transfer Tax” for loads on online calculators.

    If you don’t know what the implications of the LTT are, why do you support it?

  8. Actually, Mark, we’re both wrong. Although the Mayor reversed his initial position on rebates (only for first time new home buyers) and has publicly supported a rebate for all first time home buyers since, the report to the July session of Council recommends that staff make recommendations on “appropriate exemptions, rebates, collection and administrative procedures, enforcement provisions, administration agreement and any other implementation issues” in Fall 2007. I take this to mean that as of July, the impact of various implementation scenarios wasn’t ready but that they probably will be ready as a supplemental report to Council in October.

    But as I’ve said before, though I believe an exemption for first time buyers provides an additional element of fairness to the LTT, as someone who hasn’t bought a home yet, I’m willing to pay a couple thousand extra and have a great city because I find the alternative unacceptable — even if it means delaying the purchase of my first home for a few months.

  9. So in addition to not having obtained written assent from Ontario to collect the LTT at the time of the vote, they also did not have a defined administrative scheme. Imposition of rebates will also have an impact on the total collectable of course. Tax first, ask questions later it seems. Yet another reason why deferral was a better idea, maybe they will have their ducks in a row by October.

    Don’t get me wrong – it’s bloody hard to make a downpayment even with an RRSP Home Buyers Plan (and if you don’t have one, make sure you do before you buy Adam) but in my view the current rebate structure is an unnecessary incentive to buy new houses when the construction market is hardly slack.

    Accordingly, it would be nice to see the existing Ontario LTT rebate extended to all first time purchasers, irrespective of whether buying new or resale. I could certainly have used $2,000 to help refurbish my c.1930 East York house I can tell you!

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