JOHN LORINC: The New Deal for Cities, RIP

If you tally up the list of prominent politicians at all levels who staked their careers on advancing the so-called cities agenda, only one’s still in power – Montreal mayor Gérald Tremblay, and he’s up to his faucets in a contract scandal.

Gone from office are the likes of John Godfrey (former Liberal infrastructure and cities minister), Glen Murray (Winnipeg), and Larry Campbell (Vancouver).

David Miller’s decision last week not to seek re-election sounds the death-knell for what was once an energized and influential urban coalition. The C-5, convened by the late Jane Jacobs, will soon become the see-nothing.

Not a big surprise, I suppose. The Harper Tories never had an appetite for the cities agenda, nor, by all indications, does Michael Ignatieff. Yes, there’s some progressive environment/urban policy coming from Gordon Campbell, a former Vancouver mayor, and also Dalton McGuinty, in Ontario.

But we no longer frame cities as an issue of national consequence, demanding national resolve. Jack Layton has moved on to other matters. Miller was the last real advocate in public office, and his voice will soon be gone.

It’s far too early to handicap the 2010 race, although my not-so-original guess is that it will be a showdown between John Tory on the centre-right and either George Smitherman or city councillor Shelley Carroll on the centre-left.

Current city councillors Denzil Minnan-Wong, Michael Thompson and Karen Stintz will all make candidate-type noises, but the fact is they stand no chance of raising serious money if Tory’s in. Pressure will be applied, ambitions brought to heel. It’s Tory’s to lose.

One dynamic is predictable: the leading candidates, both right and left, will trip over one another to distance themselves from Miller, and that disassociation will include the big city vision thing. The pendulum that swept him and McGuinty into office in 2003 is swinging back. The ballot question will be about who’s most persuasively a not-Miller.

You don’t have to be a genius to realize that Tory, and probably Smitherman, will promote themselves as tough-minded financial managers, of a media empire and sprawling ministries, respectively. Tory, I predict, will flirt with a tax freeze promise or, more likely, a vow to repeal the two new levies. The centre-left candidate, seeking to differentiate him or herself, will have to match the right’s ante.

Then there’s the question of what becomes a wedge issue: I’ve come to think of Jarvis Street as the right’s version of the island airport bridge, and anyone who pledges to rip up that plan (or the bike lane strategy) could have a symbolic wind at their back. Could someone run on a vow to ice Transit City? Not unthinkable.

It’s conceivable the 2010 election will degenerate into an orchestrated renunciation of the ideas that informed the cities agenda, which found political expression in Miller’s mayoralty. His record has its blemishes, to be sure, but I’m hoping Torontonians don’t end up throwing the baby out with the bath water.

photo by Bouke Salverda

27 comments

  1. John Tory has just got to give up! How sad.

    So you’re saying we can look forward to even less improvement to our cities? Think I’ll stay in Tokyo.

  2. Toronto gives so much to the rest of Canada and what do we get in return? Toronto is consistently treated unfairly by the federal and provincial governments and universally hated by all other Canadians.

    I’m really disillusioned with this country, so much so that I don’t even consider myself Canadian anymore but rather simply a Torontonian.

  3. I think it’s more than a little premature to think that candidates from both the right and the left “will trip over one another to distance themselves from Miller.” Miller has been at times very popular, and as the dust settles from the garbage strike (and people begin to realize he didn’t do a terrible job, PR notwithstanding), left candidates may well want to run on his coattails. Fairly impressive coattails, to boot.

  4. If both Smitherman and Tory run, and both adopt a platform of undoing everything Miller implemented, Tory will win easily with the “cut my taxes” crowd and, likely with some anti-gay sentiment.

    The real problem is for either of them to explain why they would change things David Miller has done. Undoing Jarvis Street or building a link to the Island Airport is comparatively small change, big in symbolism, but small on a city-wide scale even though both would play to the anti-Miller crowd.

    Transit is a more difficult situation. Does any candidate really want to commit to less transit? Do they want to commit to spending huge amounts on fewer lines (eg a subway plan)? Where do they stand on fares and service quality?

    Rolling back the two new taxes (land transfer and vehicle license) makes for good sound bites, but doesn’t explain how to fund programs that now rely on this income.

    Would either of them seriously take on Queen’s Park for proper funding and reversal of downloading? People sitting at the top of University Avenue spend all their time telling Toronto to get its own house in order while ignoring the fiscal pillaging started under Harris and far from undone by McGuinty.

    The biggest danger both would-be mayors face is a view of Toronto that is informed more by partisan spin than by a solid understanding of how the city works. We don’t need people from Queen’s Park telling us how to run our city, thank you, and any candidate who sees this office as an extension of the Pink Palace (or even a stepping stone to a bigger office there) would abuse the role of mayor.

  5. John,

    Thanks for raising this important discussion. Thanks too for asking the questions in the right order: First, what are the issues facing Toronto? Second, who are the possible replacements given these issues?

    Mayor Miller has brought real clarity to the issues facing this City. In this most recent term Toronto politics have been defined by where the Mayor stood on a given issue. Because of the boldness of his vision many defined there own visions as being with him or against him.

    Many of the issues can be be described as part of the new deal for Cities as you have done. It is worth teasing them appart. The Mayor spoke of power, respect and the money to achieve our goals.

    The power and respect pieces involve both the formal powers granted under the City of Toronto Act and the willingness to act on a broader agenda than garbage pick-up, policing and potholes. Think of Transit City, the Climate Plan, Tower Renewal, expanding the vote to non-citizen residents, Waterfront Regeneration etc..

    The money part is key. Between downloading and Lastman’s first-term tax freeze, Toronto found itself with a structural deficit which has been acknowledged by commentators of all political persuasions. The Mayor has worked magic to close part of this gap. Negotiating the upload. (Which the province is implementing very slooooowly). Getting out from under the GST. Impementing new revenues (land transfer and vehicle registration), and yes substantial cost containment.

    Torontonians need to be aware that this gap is not yet closed. A tax freeze will mean huge cuts to direct services.

    As to the hot button you percieve on Jarvis – this too is about the kind of City we want. Will Toronto’s efforts to become walkable, transit friendly, and cyclable continue or will we sink back into automobile dependance?

    When the Mayor’s second term ends he will not only have given Toronto two purposeful and visionary terms, he will have left us deep questions about where we go next.

    Gord Perks

  6. marky ,

    would you like to supply some figures for that self aggrandizing statement? Just what does Toronto ‘give’ that residents of Ottawa, Mississauga, or Kingston do not?

  7. @Glen

    I’m not exactly sure why you’d say I’m being ‘self aggrandizing’. Anyways, here are some numbers:

    “Of all the taxes Toronto residents pay, including provincial and federal income taxes and property taxes, only about eight cents of every tax dollar remains with the City. Funding municipal services, infrastructure and in some areas paying the cost of social services once paid for by the provincial government, has become too great a burden for the property taxpayer.”

    http://www.onecentnow.ca/message-from-mayor-miller.html

  8. Glen: you know the answer so why provoke? Its about $3 to 4 billion in taxes that never come back into the city. A little more investment from the Province and Feds on proper transit funding and other costs that the city shouldn’t be footing (welfare, numerous immigration services) would be a good start. This goes for the other big regions like Mississauga and Vaughan — they too get the short shrift, but less so than Toronto.

  9. Gord,

    Spare us the fiscal responsibility propaganda. This city has not seen a fiscally responsible Mayor in a long time. Under Mayor Miller spending is up more than revenue. The Mayor has been complicit in hiding the true cost of operating the city. There is no getting around the fact that Toronto spends far more and charges far less per household then everywhere else in the Province (excluding PM/CS services). Because the commercial / industrial assessment base is taxes so heavily to make up the revenue it continues to shrink. More and more residents (nearly 100,000 more between 91-01) now commute outside the city for work.

  10. marky,

    Look at what you posted. The figures include income, sales and all the other forms of taxes that upper tier governments collect. Of course they do not flow back to the city. The upper levels of governments have their own programs to fund, like health, education, pensions, disability etc.

    Insofar as Toronto being hard done by, again look a the stats. Per capita and family income is higher in many other cities, as a result they will be paying more taxes than the average Torontonian. Secondly if you look at the level of government transfers, you will also see that Toronto is the largest recipient in Ontario.

  11. Gord If you want to see the magic that the Mayor and council has worked closing the gap, look at page 3 here…

    http://www.fcei.ca/legis/ontario/pdf/on0345.pdf

    You could also add to the list of accomplishments this 2007 award;
    http://www.madriverinstitute.ca/page12.html

    The Worst Municipal Councillor is …

    David Miller, Mayor, City of Toronto

    – for constantly harping his city doesn’t receive its fair share from other levels of government, while ignoring Toronto taxes are at a level below most other Ontario cities, e.g. comparable $350,000 houses in Toronto and London are about $1,000 apart, with the former at $2,800 in property tax; for complaining that city council members cannot get things done, while doing little to compromise to get things done.

  12. Glen,

    So you’re saying that none of those tax revenues being collected should flow back into Toronto because that money is used to fund federal and provincial programs. Yet many of the programs that the feds and province used to fund are now being carried by the city.

    I also don’t understand your point about higher per capita income in other cities. Whether or not some other city has more citizens in a higher tax bracket is besides the point because it doesn’t relate to how much money flows back into that city.

    Your point about Toronto being the single largest recipient of government transfers in Ontario also confuses me. Toronto is the biggest city in the country. It makes sense that it would receive the biggest transfers.

  13. Glen,

    I think I can clear some of this up. As I said Toronto has a structural deficit because of downloading and Lastman’s tax freeze. Deficit means, as you said, that you spend more than you take in. Because it’s very large (exact estimates vary – but it peaked a few years ago at nearly $1 billion) and it’s structural (recurring every year) Toronto’s finances were a recipe for bankrupcy.

    Mayor Miller’s work decreased the size of the structural deficit but it is not gone. The next Mayor will have to raise taxes faster than inflation just to keep things the same. Alternately the next Mayor can make deep cuts to services. $1 billion would mean eliminating the muncipal subsidy to the TTC altogether (which would mean enormous service cuts and at least a $.50 fare increase simultaneously), and cutting the police force by more than half.

    As to your point about differing rates for business commercial and residential. Mayor Miller has closed the gap in each of the last several years by holding business tax increases down. In fact, small neighborhood business (a category created by Mayor Miller) recieved modest tax cuts in each of the last two years.

    I hope this helps.

    Gord

  14. Gord,

    I know all he details. Yes, Mel Lastman was a fool for freezing taxes. Yes Provincially mandated and cost shared programs weigh on Toronto’s budget (729 million in 2007). Lets reconcile this though. Lastman’s tax freeze put the city behind in revenue generation. The city faces a high burden in carrying the cost of downloaded programs. At the same time it has the among the lowest residential tax burden in the Province.

    I am familiar with the ETBC program. It is telling that it has been fiddled with three times. It was designed to do as little as possible over as long a period of time to prevent political backlash. Not do what was in the best interest of the city! It has nothing to do with prevent sudden increases in the residential rate. The tremendous loss in the relative value of the non residential assessment base will do that (10% between 02-07alone). That loss will have to be made up for by the residential class.

    ETBC was not a gesture, it was a necessary reaction to more than a decade of stupid policy. At its completion, the rate in Toronto will still be 2.5 that of residential. Areas like Kensington will not survive (like Dukes http://southofsteeles.blogspot.com/2008/04/death-by-fire-then-death-by-taxes.html ). I doubt Spacing would be able to afford its office if the building it is in was not protected by the cap.

    Toronto Politician’s need to come clean about the cost of running this city. It can no longer have the highest expenses and the lowest residential rate, with the other classes and the province making up the balance.

  15. I also suspect Jarvis bike lanes could be the small issue that will be grabbed to get big headlines if negative people like Denzil Minnan-Wong or Karen Stintz decide to run.
    It’s more important than ever that we elect progressive local councillors to make up for losing Miller, we owe him for spending a considerable amount of his political capital on us.

  16. Glen,

    Sounds to me like we agree on this much: “Torontonians need to be aware that this gap is not yet closed. A tax freeze will mean huge cuts to direct services.” If so then we can move on and both speak out against any campaign in 2010 which promises to freeze or roll back taxes.

    Gord

  17. I always believed that the push for bike lane on Jarvis was a tactical error, too much political capital spent for too little result: the lane on Jarvis is too short (stops at Queen) and too close to Sherbourne bike lane, and have too much traffic. Cycling community would be better off staying out of the Jarvis project, let the city staff’s recommendation of widening the sidewalk to stay. If we want to fight for another downtown north-south bike lane, it should have been Church St., which could go all the way south to Esplanade, connect directly up north to Davenport lane, better spaced from Sherbourne, closer to Yonge, and has much less traffic.

  18. I don’t know Yu, but I tend to agree with him about Jarvis – the real need for better safe cycling lanes is east-west, and that means Bloor first and foremost as it’s long, direct, no streetcar tracks and it has the subway parallel to it.
    However, the Miller record and Council reoord on Bloor is sad – a lot of time wasted on maybe a study, then another one, and then another bold new study. Action is needed in this term in three areas:
    1) do the Viaduct fixes as per the ward29bikes.ca rpt
    2) follow through on K. Rae’s commitment for bike lanes in the Yorkville area instead of that BST that is only a third done after 1.3 years
    3) Gord – make it safe for cyclists to go from your area eg. Dundas/Keele along Bloor to Ossington then to Harbord St.
    Simple, cheap, effective and a legacy.
    Sadly I think after 3/4 years on this, and the 17 year old report about wide Bloor in the core being #1, I don’t think the “progressives” can do such a cheap good thing. But we can expect ads ad nauseum.

  19. Re: Yu’s comment about “political capital”… I think this observation is bang on and aptly explains the plummetting popularity of this once very popular figure. Many pundits think that Mayor’s current unpopularity has to do with the recent strike. I think the disenchantment is far far deeper than that and has to do with growing displeasure over the Mayor’s handling of a number of situations over a fairly long period of time. (In other words, the strike was only the particular hill he happened to die on.) The metaphor I would suggest is of the frog in the water who doesn’t realize that the water is incrementally getting hotter and hotter — and you know the rest.

    As much as I admire many parts of the Mayor’s vision (certainly not all, however), I still think he was a bad Mayor (yes, better than Lastman, but just barely in my view). He tried to do too much at once. He did things in a way that alienated way too many people — not just on Council but across the City.

    As I said in another post, I think having a progressive “vision” means precious little if you botch up the “implementation”.

    While I think this Council has a lot of bathwater that needs to be thrown out, I would hate it if the Mayor was succeeded by someone such an ardent right-winger.

    I hope the next Mayor is a progressive but one who focuses more on “implementation”. In contrast to the current Mayor’s style, they might want to focus on:
    -picking battles more carefully;
    -trying not to do everything at once;
    -trying not to give the impression that only you and your supporters on council have all the answers;
    -trying not to needlessly alienate those on council with alternate points by keeping important information from them — or keeping them off important committee assignments;
    -being respectful of a diversity of opinions and approaches;
    -trying not to insult people by suggesting that their’s is the ONLY vision that can be called ‘progressive’… bottom line is that there are competing visions of what qualifies as ‘progressive’ (really there are);
    -always recognizing that politics involves making choices… and that there are always other choices that can be made;
    -being more open and honest with the public and engaging in ‘genuine’ consultation rather than charades.

    Oh, and since I see Councillor Perks on this board, I’ll suggest that he might want to go over that list as well.

  20. Gord,

    I hope then that you will not support any measures to suspend the Enhancing Toronto’s Business Climate program. It is time for city councillors to tell it as it is. Residents get a lot of services for very little money. Their property taxes do not even cover the cost of fire, ambulance, police, and the rest of the citizen centered service excluding the PM/CS ones.

    No one will speak louder than me on the absurdity of a tax freeze or roll back (unless it is for the non residential sector only).

  21. marky,

    What I have been saying is that there is nothing unique about Toronto residents sending more tax dollars to Queens Park and Ottawa. That is the reality everywhere. Furthermore, in the aggregate Toronto sends less and gets more back than any large city. Mayor Miller and others have frequently used omissions and obfuscations to try and paint Toronto as uniquely hard done by.

    My remark about the amount of transfers and funds Toronto receives was weighted for size. On a per resident basis, Toronto gets more from upper levels of governments.

    * BTW both the Province and the Feds, now that they are running operating deficits, can rightly claim that the ‘fiscal imbalance’ towards cities has been reversed.

  22. Glen, I’d be interested in your thoughts about how a candidate could successfully get elected – and stay elected – on a “more taxes” platform. You make a persuasive argument that residential taxes here are far too low, but in today’s political climate, how can we fix this?

    Maybe now that David Miller has nothing to lose he can push through some unpopular decisions that could save the city — fixing tax rates, road tolls… who knows?

  23. Paul,

    It is near impossible for a candidate to get elected on a platform of higher taxes for equal or less services. That is the catch twenty two. Especially so when there will be other candidates that will offer a seemingly more compelling (albeit untrue) alternative. In some ways, Mayor Miller did this himself. Promising to keep property tax hikes in line with inflation (2 to 4%). This would entail keeping spending growth at the same level. What we had was spending growing at more than 6%.

    The reality is that the distortions have gone on so long that they are getting harder and harder to conceal. Take for example the shrinking of Toronto’s non residential tax base. You cannot hide from this. Especially now that the reserve funds are empty and the province is unable/willing to further help.

    I am optimistic that if someone was to take the time, and be honest with Torontonians, they would be able to be persuasive.

    While I appreciate that sometimes I may come across as an antagonist for the Mayor, I do so only in the sense of his acting as a proxy for the consensus. It is councilors like Howard Moscoe, who take time to count misspellings yet none to understand the financials of the city, that lay at the heart of this city’s problems. It also extends to some city staff, who should be better educated on land economics, and should have been raising alarm bells much sooner.

    If Mayor Miller could do anything before leaving, he could once and for all address this imbalance, and put Toronto on the road to lasting stability. He will have to fall on his sword to do so, though.

    I will end with advice from Don Drummond (my choice for Mayoralty candidate)…..

    Drummond thinks Miller and McGuinty could learn something from Martin and Chrétien about being upfront with citizens about the problems their governments face. “Chrétien and Martin didn’t just slash government spending out of the blue. They put it in context and brought the public into it. And by the time they did it, the public was actually egging them on to be more aggressive than they had intended to be.”

    Miller and McGuinty, Drummond says, need to tell their constituents that Toronto and Ontario are suffering from structural deficits that must urgently be fixed. By “structural deficit,” he means that, on a regular basis, neither government has enough revenues to pay for its programs. The city is not legally allowed to run an operating deficit, so it balances its budget by drawing on its reserves. Drummond thinks that city hall should cut spending as much as possible, then cover the remaining shortfall (and there will be a shortfall) by raising residential taxes, which are lower here than in comparable jurisdictions. He has great faith in the intelligence of ordinary people, and in their ability to handle the truth about the economy. They’ll back higher residential taxes, he believes, if someone shows them why higher taxes are necessary.

    Most importantly, he says, if Toronto wants a thriving economy, it has to stop driving away business with its high corporate taxes. The city’s commercial and industrial rate is double the residential rate, which, in Drummond’s view, makes no sense. The rates are also higher than those in the outer suburbs, which is why business headquarters and jobs are moving to places like Markham.

  24. Just a quick correction in Don’s figures. Toronto’s rate is more than double. Even at the end of the program to reduce the rate it will be 2.5 times residential, still far to high and counter productive.

  25. Glen, you’ll recall that when Chretien and Martin did their hatchet job (cutting services) and magic show (downloading) they had a majority government. McGuinty does have a majority but there will never be one at city hall. For better or worse, that means you’ll never be able to whip a vote to the point that enough councillors ignore the ire of their constituents to slash services and increase taxes — it doesn’t matter how intelligent the conversation is.

  26. Glen,

    Probably the most difficult moment in David Miller’s political life was the debate on the Land Transfer Tax and the Vehicle Registration Fee. He explained the City’s structural deficit, openly and openned the City’s books. He has also argued for the 1 cent now campaign national. This would give the City access to 1 cent of the GST. I wish we had won. Further, he has fought for 9 years of 9% percent annual increase to the water rate, so we could catch up on years of underfunding. He did all of this while in a “minority” posistion.

    The thing that many people miss about the Martin era is that he made a specific choice avoid the need to pay for services by cutting them. He also began the downloading avalanche. The federal government used to contribute to higher education, they used to pay a higher percentage of health care, they used to contribute to infrastructure routinely, etc. etc.. When Martin decided to cut spending he cut spending that effected provincial and muncipal bottom lines. The Province of Ontario pushed much of their problem down to muncipalities. This is what created the $750 million structural deficit in Toronto. Where Martin cut services and downloaded costs without describing it fully, Miller was honest about the problem, AND fought to preserve services.

    Gord

  27. Gord,

    The books should never have been a mystery to council! As councillors, it is your job to now the figures. Everyone should have known the precarious shape the city was/is in. Not only that but they should know why. Beyond the downloading burden.

    here is some decent info..
    http://www.toronto.ca/legdocs/2005/agendas/council/cc050216/pofcl006aatt.pdf

    In so far as downloading goes, in Toronto specifically, it goes like this.. The feds cut transfers to Ontario (and the rest). Ontario downloaded onto municipalities. Toronto downloaded to …….. the non residential property classes. Specifically those in the multi residential and commercial/industrial classes. Toronto residential taxes have only increased 25% since 1998. That is below the rate of inflation. Spending has risen 37%. Today Toronto residents pay for even less of their city services than before.

    I support the 1 cent campaign. Though, with Toronto having a lot more available tax room compared to other municipalities it was a poor choice to lead the fight. Mississauga whose residents on average pay $500 more per year in property taxes may be closer to tax saturation, and have more legitimacy in making the request. As do most other municipalities.

    Not until the LTT, VRT, garbage and water fees was there any serious attempt to add cost to residents in the residential class (you know the ones that vote predominantly). Yes Mayor Miller deserves recognition for that. There has been some, certainly more than his predecessors, of appropriating cost to benefits.

    What we have not seen from the city is any serious attempt at cost containment. The recent wage settlements are proof of that.

    Gord, I really do appreciate you responding here! And would really like to take advantage of it by asking you one favour; Could you provide me with the average cost to provide services per household? JP will not respond to my requests for that information.

    Cheers

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