City Council’s decision to defer implementation of Toronto’s planned new taxes could be a blessing for our cash-strapped city.
While the mayor has to sit back, lick his wounds, and begin strategizing how to cover next year’s budget shortfall, the onus to stop these taxes has now fallen onto the lap of Toronto voters. If the taxes had been pass yesterday, Miller and co. would’ve been dealing with a public relations nightmare featuring backlash from taxpayer groups, uppity columnists at the Sun and Post, and a wide assortment of residents.
Instead, the mayor and council cohorts has been given a “reprieve.” They now have the chance to challenge Toronto voters in the upcoming provincial election to tell their respective candidates that the province has to re-establish the funding levels to the pre-Mike Harris era.
The city obviously needs the tax money to operate like a major metropolitan centre. And that money already exists in government coffers but its in the hands of the federal and provincial governments who are unwilling to share those funds (in the case of the Feds, they decided it’s better to give us tax cuts instead of funding, say, a national daycare program or affordable housing or public transit).
So now the mayor and city council have the chance to yell in their loudest collective voice to Toronto voters: support candidates in the provincial election that are willing to address Toronto’s budget constraints or you will be faced with paying these proposed taxes, or a hefty property tax hike, or even worse, massive cuts in service. The One Cent Now campaign is not enough — there has to be a full-court press on Toronto’s public so that they fully understand the consequences of letting the higher levels of government get away with shafting Toronto.
It will be difficult during the election for any of the parties to say that they’ll address Toronto’s financial woes head-on for fear it will lose them voters in other Ontario regions, but that’s not Toronto’s concern.
The mayor and council had no choice but to try and implement these taxes — now the public has the chance to save this city’s future by collectively forcing the province to pay its fair share of running Toronto.
32 comments
They could have had the guts to vote on the new taxes and still lobby for uploading. This deferral was cowardly nonsense.
“uppity columnists at the Sun and Post” and dont leave out the Star’s Royson James and his daily anti-Miller stories that are long on blame, short on ideas.
It will be interesting to see how Toronto’s finances playout in the upcoming provicial election this fall…
From my admittedly partisan position, I’d suggest that the Green Party of Ontario is a good one to watch on this. They responded to yesterday’s vote by saying, in part, “that a Green government would give Toronto its portion of the provincial land transfer tax, and would consider doing the same for all Ontario municipalities.”
See: http://www.gpo.ca/43.html
It will be difficult during the election for any of the parties to say that they’ll address Toronto’s financial woes head-on for fear it will lose them voters in other Ontario regions, but that’s not Toronto’s concern.
It has to be Toronto’s concern, if you want this effort to succeed. Like it or not, the majority of votes are outside the GTA and the ridings most likely to change hands aren’t in the 416. If we rely on the parties costing themselves non-416 votes because it’s “the right thing to do”, nothing will happen.
The good thing about the One Cent Now campaign is that it has other mayors on board. But as its leader, Miller needs to see himself as a champion for all the cities. Assume that the rest of Ontario tunes out at the first Toronto reference; he should be able to speak on these issues using only examples from other cities. It isn’t fair, but it’s more realistic.
Remember when Royson James wrote that abysmal column saying that Mike Harris was a genius because his transfer of debt to Toronto Hyrdo would provide the money for Toronto to get out of its fiscal mess?
In James’ favour, at least he writes intelligibly. Sue-Ann Levy is unreadable; she’s a screeching harpy.
The Greens should promise all municipalities will benefit, rather than consider it, or just not propose it at all. The City of Toronto Act in some ways was a bad thing for Toronto as it proported to give them more power (and yet we had to have Smitherman give up our samosas) but did so with very dodgy tools and may have engendered resentment in other municipalities still under the Provincial thumb.
The Greens should propose a Municipalities Act to
– replace all existing legislation,
– to define who pays for what,
– to define how big a city needs to be before it gets powers like the COTA (should Mississauga and Ottawa have them already?),
– to provide for a deamalgamation process as in Montreal
and crucially
– to define an arbitration process when there is a dispute over unfunded mandates.
The Greens should say that they will give municipalities 1% of PST and fund it by raising PST into the tax room vacated by the Tory GST cut. They should also remove the first time buyer exemption for new homes and transfer it to second hand homes, on environmental grounds.
I also think its a clear sign that Toronto gets what it deserves. I don’t think Toronto deserves to be in this situation, but the voters have to be held responsible for voting in morons like Holyday, Ford, Nunziate, Del Grande, election after election. If you watched 15 minutes of the debate yesterday you would see that the situation we’re in has nothing to do with Miller’s leadership and everything to do with haveing a lousy bunch of small-minded, ideologically motivated councillors.
One more decent councillor and this could’ve been avoided.
Though it’s a shame that these manifestly neccessary taxes were deferred, it might be a good thing for Miller to lose once in a while. It’s just unfortunate that it had to be on such an important matter. One hopes he’ll come out of this one wiser and better able to manage certain foolish councillors.
Also, he’s already demonstrated that he’s ready to start solving the fiscal crisis on Toronto’s own, and McGuinty knows this – the way I hear it they’re on fairly good terms with each other – and Dalton will probably come through with a token upload for the city, to signal to the deferrers that it’s all they’re going to get. The taxes will still need to be enacted, inevitably, and Torontonians will have to get used to the idea of investing in their city. Hopefully, a more self-reliant Toronto will emerge, and speak with one voice for its interests.
Matt, you’re rarely this wrong. In no way, shape or form is this good for Toronto.
Because of yesterday’s decision to not go forward with the proposed taxes, the Mayor instructed staff today to find cuts within departmental budgets all across the corporation and the City’s ABCs from now to the end of the year so the savings can be applied to next year. According to Shelley Carroll, capital projects that haven’t been tendered, like the renovations inside City Hall, are canceled.
However, far worse than a few important capital projects, in the spirit of penny pinching, today Council voted to give the new Lobbyist Registrar (the one intended to keep track of who is lobbying who and ensure rules are being followed) half of the budget she requested to get her office and the system up and running. So what are the chances the Lobbyist Registry is an effective tool to combat corruption now? Not very good. If the registrar doesn’t resign it’ll be a miracle.
For 2008, it looks like the only capital projects that will be undertaken are those that are required for State of Good Repair, and even some of those may need to be shelved if they aren’t absolutely necessary. Any surplus generated through slicing and dicing the City’s five year capital plan will almost certainly be applied as a one-time fix to operating.
On the operating side, in the past few years, staff have been given a 0% increase target for all budgets. It appears that this year, there will be a negative target. Zero per cent means that every department has to cut by the rate of inflation so, if there’s a negative target of, say, 3%, the actual cut would be approximately 6% (municipal inflation is above CPI).
On top of the service reductions, Torontonians can bet on paying more on their property taxes, too. If the new taxes are actually adopted in October then it might only be in the 5%-9% range but if they aren’t then start budgeting for the 15%+ range. But I’m sure the seniors forced out of their homes will understand that we’ve got to make a point that likely won’t be heard. Oh, and watch out for the spike in user fees, too.
And now Toronto City Hall just became a much more interesting place to hang around and, by virtue of that, it’ll probably become about as effective as the minority federal parliament. The opposition attacks on Miller are far more pointed (Michael Thompson went after Miller, referring to his schtick as “suck and blow” politics) and Miller is being forced to the floor of Council on every issue of even moderate importance. And for those unfamiliar with Council rules, if Miller (as mayor) gets up to speak on an issue, even if he doesn’t move a motion, a councillor can ask him any question about the issue at hand. Thus, Miller was dragged through the mud when he got up to speak about the cultural importance and economic advantages of saving Theater Passe Merialle this evening (which ended up passing). And though I think a mayor should be held accountable by the council, when the right-wing gangs up on him like that, it has little to do with accountability and lots to do with cheap political points, meaning Council accomplishes even less of its several hundred page agenda.
Then, when it comes to your actual strategy, begging for money from the province has been a losing battle since *before* Harris. Harris was definitely the one to screw Toronto over but no political party is dedicated to improving our city, especially not with long-term, sustainable agreements. Just look at the 2003 election. That was supposed to be when we elected a Toronto-friendly government that would reward us for voting them in. And we’re seeing how that decision has worked out. Not to mention that they’ll still have the excuse that Toronto hasn’t used the tools it has at its disposal in the new taxes.
I’m the first to call Adam Vaughan on his bullshit but he was right when he hypothesized yesterday that even if you put every Toronto councillor in the provincial legislature tomorrow, they still wouldn’t fix this problem in the way it needs to be fixed. There just isn’t a reason for provincial politicians to do it.
So Matt, for all those reasons/factors, will you take back your absurdly optimistic post on this? Because there really is no silver lining in Toronto losing another election *and* being fiscally starved and only a natural disaster or moderate recession away from absolute collapse.
I don’t doubt a word you write, Adam. As I re-read my post later today I wanted to add to first sentence something like, “if there is a silver lining to be found in yesterday’s deferral…” But it was too late for that.
I don’t think there is anything else to be happy about, that’s for sure. The only thing we can hope happens is that voters can properly direct their anger at the appropriate figures. I do think that there is a reason for provincial politicians to fix the fiscal problems for the reasons you give in the last paragraph: if Toronto collapses so does the GTA region and then the province.
The phrase the upper two levels of government like to use on Toronto is “get your house in order.” In this case I agree, but not in the same ay they mean it: we have politicians who are more concerned with opposing Miller rather than looking out for the well-being of their constituents. They are certainly looking after their wallets but are playing wreckless with the collective health of the city.
The province already gave its answer to the question of downloading: “New City of Toronto Act.”
The land transfer tax was a mistake. The city of toronto has unusually low residential property taxes. The city raises 3.3 billion in proprty taxes every year and half of that is residential A 20% tax hike should cover the funding gap, and Toronto’s residential rates would still be competitive with Markham and Vaughan.
I’m glad Mayor Miler was defeated. Now maybe he’ll drop his pledge to not raise property taxes.
Uh, Toronto needs low residential property taxes because land values are so insanely high. Higher property taxes would accelerate gentrification and would force many long-term residents to move.
We also need a higher land transfer tax. Something needs to slow down the real estate “investment” frenzy, or else we are going to get the kind of horrible bubble that is bursting in the States right now.
Thanks for the clarification, Matt.
The problem with property taxes, Khan, is that they don’t recognize economic growth. So when Toronto prospers, services like the TTC are used more often but the property tax base doesn’t expand to support the increased TTC use. Conversely, the land transfer tax will grow with the economy. Plus, it will also ensure that the City isn’t forcing a large number of people out of their homes through a tax hike they can’t afford since the LTT is only applied upon purchase.
The biggest pitfall I can see with the LTT is that a recession typically hits real estate the hardest so if the City is depending on these revenues, one year they may just not come and it could last for several years before the market recovers. As well, the rebate level and point where the LTT reaches its highest point are apparently set to mirror the system implemented by the provincial government in 1985. Twenty years ago, a $400,000 home (the threshold for the 2% tax) got you a lot more than it does today.
Adam – the City passed the measure to buy “Theatre Passe Muraille” 30-8 after the taxes vote. Apparently the City has some money after all.
This is why Torontonians aren’t scared enough yet – the City cries poor but always finds a way to fund pet projects. Now that the Theatre is City owned and the culture department has some say… how about Leon’s Queen West at yet another sweetheart price as at the Roundhouse?
So Mark, shall Council sit on its hands and simply dispense no resources until the budget hole is filled? Maybe at least they could halt repairs on any road that doesn’t have a bike lane, bus route or streetcar track on it. That would certainly save some money.
Just because the act of purchasing the theatre – at just over $1 million, a drop in the bucket of the expected shortfall – might not be something you agree with, that doesn’t mean they were disingenuous to do it.
The city still has its regular business to go about, within its priorities. Culture (whatever that means) is a prioritiy of the Economic Development department, just as road repair is a priority of Works. If that’s a problem for anyone, a tax debate isn’t the place to take it up.
Torontonians aren’t scared enough yet because they’re not being encouraged to think things through.
Mark, it would have been absolutely foolish not to buy the Theatre. The City now has an asset worth far more than the $1.2 million they’re paying for it. So if the theatre company goes under or if the City absolutely needs to sell the property to pay for an urgent cost it can be done while getting great return on investment.
Plus, according to David Mirvish, small theatres are what keep the big ones thriving because they’re the ones that turn out the talent. Now take that opinion and consider that very recently at least three of Toronto’s better-known small theatre companies had to close down.
So it seems to me that by not rejecting smart spending just for the sake of not spending, Council was able to strengthen its financial position and support an industry that provides the City with a great deal of revenue. That’s what I call being fiscally prudent.
Now that being said, I will concede that it’s a hard deal to explain to people. But that’s why populist politics suck.
Btw, the City won’t be putting its money into the Railhouse. It looks like Steamwistle will be fronting something like $10 million for it, essentially (maybe exactly) what Leon’s intended to pay. All the City has to do is kill the contract with Leon’s, which, if I understand correctly, can be done without risk of losing a lawsuit (though that doesn’t mean a lawsuit won’t be filed).
And if I can just correct my assumption of a 3% municipal inflation…I saw an operating budget forecast for one part of the City today that will need a 5% increase just to maintain its existing services.
Smitty – the City is the one saying the wallet is shut but is still writing cheques. Passing on the theatre would be a resounding statement that there is a crisis. Buying the theatre says “what crisis?”
Adam – Theatre Passe Muraille: “The City now has an asset worth far more than the $1.2 million they’re paying for it.” On what basis? Is this a cultural or an economic worth? If economic, why has no private sector party purchased it? If cultural, that’s fine, but it’s not like David Mirvish will be paying a transfer fee when the graduates of the city’s newest theatre move up to the big leagues.
Roundhouse: Adam, some within the City are indeed saying the lease can be vacated, but the leasing company claims their lease and Leon’s sublease is already approved. If this is the case, Steamwhistle’s 10 million is moot unless we want to spend another “Miller toonie” in court on the issue.
I really hope Steamwhistle get their way, they seem to have been very ill-used but I have no confidence in a city bureaucracy that has screwed a model tenant so they can open a furniture store in a historic building for a pittance of a lease.
This is the best debate I’ve read so far about the issue. I apologize if I sound patronising, but rarely does a “comments” section in any website boast such a high level of political wisdom and intelligent discussion. Councillors beware. Let’s bring back intelligence into politics. There’s a thought.
They can’t do it yet, but as soon as legislation allows it all the 905 regions will start applying their own Land Transfer Taxes.
They are just salivating over the prospect as they are ultimately in the same situation as Toronto; you can’t run an old city off of property taxes!
It’s easy for Barrie to take in development fees and churn out new roads and schools but you can’t do that when you have no fields to houses development. A strong commercial and industrial base helps, that’s why Toronto does so well, but when you don’t have that, you end up like Oshawa with rates double Toronto’s.
Thanks for the kind words, AJ. The writers of Spacing are a great influence on the level of debate.
Mark, I’m talking economics here. Supporting culture could be considered a bonus on this deal.
The reason no one else has bought the building is because it’s owned by the theatre company and the theatre company wants to sell to someone that has a legitimate interest in maintaining the theatre. The only way Theatre Passe Muraille could get market value for the building is if an entity purchased it for the purpose of re-development.
On the Roundhouse, I can appreciate your skepticism. Ideally the Steamwhistle pitch works out, Toronto isn’t on the hook for a stupid amount of money and the big box store takes a hike. But I’ll leave it to the legal experts that understand the nuances of a contract like this one to comment on how good the City’s claim is.
Adam – that’s fair enough, but if the theatre company couldn’t operate the theatre profitably I’m not sure how the City proposes to do so.
I actually don’t much mind Leon’s as a company – just not in a historic building. I don’t blame them either, I blame the City for leasing the space to a property company who then proceeds to sublease to an unsuitable tenant which Culture assents to. With the amount of property the City and its agencies own you’d think it would be able to market it itself – but it doesn’t seem to have the same problem outsourcing that as it does with garbage.
Just to add a little humour to the discussion – we could always ask the union to hold wage increases to the rate of inflation rather than whatever was given away in the last pay rounds. Oh dear, I crack myself up…
Am I wrong in thinking this motion was ‘deferred’ and not ‘defeated’?
All three levels of government need to work on this together. It might not happen, but it needs to.
Miller lost not because the citizens of Toronto made their voice heard, but because he was sabotaged by Conservative front-groups such as Canadian Federation of Taxpayers. They were better organized, and they successfully planned and implemented their agenda. That’s all it was.
I hope that Spacing plays a major role in organizing getting out the message to pressure provincial and federal governments. You certainly have the platform, so use it!
SK >> We’ll be launching the Spacing Votes blog again to cover the provincial election from a Toronto/urban issues perspective. We should go live with it on Sept 1st.
S K – That’s what I had figured. The way Eye Weekly tells it, the North York revenue tools meeting that John Tory attended was basically a stacked deck, haranguing the city’s representatives and drowning out pro-tax opinions. Not only that, but Tory (and other party leaders, for that matter) has dispensed only the most nebulous commentary about uploading, which is really what the deferment is all about.
Ultimately, though, these PC fronts have accomplished nothing, and perhaps even undermined their men in council. The rightists were always seen as a nuisance by the left, but now they’re a dangerous opposition. Miller won’t let this slide – I can see the vengeful gleam in his eye already.
Mark, the City isn’t paying a cent of the operating budget and it’s leasing the building to ArtScape for management purposes. That means there are no additional costs to the City after the $1.2 million is spent. If TPM goes under then ArtScape can try to find another theater company to take a run at it, it could be used for another City purpose (affordable housing, community center, etc) or it could be sold off for far more than what was paid. It’s a no lose situation if there ever was one.
Shaun, you’re correct that the issue was deferred and not defeated. However, the decision means that the earliest the City can start receiving the new revenue is in the second quarter of 2008. Consequently, even if one presumes that the new taxes pass, there is at least a $275 million hole in the 2008 budget.
Shaun’s also right that all three orders of government should work on the issue. But even suggesting that that “might” happen is being far too optimistic judging by the past couple of decades.
Matt, I saw that in today’s Sun’s “Best of the Blogs” section this post was printed. Out of curiosity, do they call/write for permission or do they just print it and attribute the piece to you, no permission required?
No, we had no idea until we read your comment. If there’s a link please provide it.
I don’t know if they put that section online. I drew the short straw at work and have to read the Sun daily so I saw it in print.
They printed your post verbatim, I believe, along side Philip Preville’s “manufacturing a crisis” post on the Toronto Life city hall blog.
The Sun regularly prints excerpts from Steve Munro’s blog in the Best of the Blogs feature so I figured they might have an agreement but now I’m thinking that might not be the case.
Seems like if they’re going to print your work you ought to have a say in it and be receiving some sort of compensation.
I’ve looked around and found the staff report for the Theatre and in fairness it seems to be a well argued submission and as noted by Adam does not incur an operating expense:
http://www.toronto.ca/legdocs/mmis/2007/ed/bgrd/backgroundfile-5217.pdf
There is however the question of whether this project is the best use of that capital or merely the most pressing.
I do note that the City has to pay Land Transfer Tax – it seems even with PST rebate Ontario taxes Toronto still.
So much for a blessing from the bone-headed vote on Monday. The TTC’s likely to be slashed to the bone again tomorrow, after being led to believe things were looking up for the TTC with Transit City, increasing ridership, new subway cars, more service.