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Canadian Urbanism Uncovered

Dale Duncan at City Hall, August 30th, 2007

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We need new taxes

Provincial election campaigns will soon to kick into full throttle and many Torontonians will be putting their energy into pressuring candidates to take a stand on uploading. “Upload social services!” we’ll scream, as well we should — Ontario is the only province in Canada that requires its cities to pay for provincially mandated social programs such as welfare and drug benefits out of its property taxes, and Toronto spent $729 million on these programs last year. Next year, we’re anticipating a budget shortfall of $575 million.

The opportunity to convince the candidates of the importance of uploading social services is what city council’s July 16 vote to defer a decision on new taxes was all about — right? The logic goes like this: if the 23 local politicians who voted for the deferral played their cards right and the party that wins on October 10 comes through for Toronto, we might not have to pay any new taxes at all and we can go back to enjoying life as it was (sans cutbacks) before this whole financial fiasco started! The reality, however, is that new taxes (a.k.a. revenue tools) are going to be needed no matter what happens.

Even the NDP’s plan — which some have mocked as pie in the sky — wouldn’t relieve us of the need for the new land transfer and vehicle registration taxes. Were Howard Hampton to become premier, Toronto would save $221 million next year thanks to uploaded services and new transit funding. That still leaves a $354 million shortfall that the $83 million in service cuts planned for next year doesn’t even come close to covering.

The fact is that a city of over two million people shouldn’t be relying primarily on property taxes to pay its bills. Forty-one per cent of our funding comes from property taxes, while in the United States, they account for 18 percent a municipality’s income. Having diverse sources of revenue is essential for any large city and if we expect to retain our quality of life and continue to invest in our city’s future, new taxes are essential.

As it turns out, provincial candidates aren’t the only ones we have to lobby over the next month; we also need to put the pressure on our local councillors, who are scheduled to vote on the taxes after the provincial election in October. It’s time to send the message loud and clear: vote for the new taxes this fall!

Trapped in the closet

The mayor’s office renovations, which have been put off as a result of the service cuts, have been priced at $1.2 million, not $3 million as I reported last week.

“The $3 million figure includes work to create a new committee room on the second floor and a new protocol lounge, neither of which are connected to the mayor’s office plans,” says Stuart Green, deputy director of communications. “How do I know this? Because I am losing an office as a result of the cost-containment measures and will continue to work in a hallway that used to be a closet.”

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12 comments

  1. Dale,

    There was a claim made several weeks ago that the shortfall of $500M was not, exactly, a shortfall. It wass $500M plus a bunch of wishlist programs, and reversing certain cutbacks from previous years.

    This claim went by in the media not very well challenged by our leaders. It has stuck in my head.

    I don’t know about you, but I sure like the politicians of Toronto have been playing us to get us to sing for new taxes, please, oh please, pretty please raise our taxes to cover your $500m shortfall.

    The TTC’s “consultation” this week is where this whole process jumped the shark for me.

    My question to the media is: is the $500M for real? Or we being played?

  2. you’re being played!I spoke to adam vaughan today and he is adamant.MORE NEW TAXES! They forgot to tell you that the two taxes proposed aren’t the end of the road.There will be close to 20 taxes in all proposed and once the people say yes to these the floodgates are open!

    We need a comptroller to oversee borrowing and an intense investigation as to how those capital projects costs were arrived at.Check to see where the pennies went the dollars will follow.Every single item that the city paid for has to be investigated so that we will know every cost from a pencil to a subway car.MFP should have been a lesson.

  3. I find it strange (ironic?) that George is envoking the MFP scandal when almost all of his platform policies from his failed 2006 election are in lock-step with the same councillors who brought us MFP.

    Certainly financial oversight needs to be more rigourous at City Hall (or any government for that matter) but if you want to do things the way Mr. Sawision suggests you need to find 500 million pencils to solve this crisis. And that’s the problem with his argument (also shared by Minnan Wong, Ootes, Stintz, etc).

    Look at the numbers and they are clear: there is a $500 million shortfall and the City of Toronto taxpayers are paying $729 million of provincial programs that the province should be footing. Every year, under BOTH Lastman and Miller (and this is key to destroying the opposition’s POV) you can see the City’s shortfall is almost always equal to the downloaded costs. Every fucking year.

    So, George: please take up your cause with the upper levels of government and this com ing election. Every western democracy has proper funding models with all three levels contributing to capital and operating budgets. Canada, and particularly Ontario, is ass-backwards when it comes to funding. Sadly, we’ve known this for a while but it still persists.

    And this is why I can’t the misguided bashing City Hall is taking on this issue: The federal goverment has a surplus in the first quarter of 2007 that is equal to the amount that the One Cent Now campaign was asking for. All 22 major cities across Canada, not just Toronto, would receive an excellent source of city-building revenue if OCN was in effect. And the Feds still have three quarters of the year to reap their GST surplus rewards.

    Almost all of our funding problems can be fixed with tax dollars already collected by the federal & provincial governments. Miller and his “revenue tools” allies wouldn’t even argue that point. But the record shows that over the last 10 years Toronto has been abandoned by the other levels of government. We are losing the battle.

    So do we just let the city rot and cry about efficiencies, or do we suck it up and try to keep our collective head above the water until the other governments wake up? We can argue over which taxes to implement, but there is little room to argue that we don’t need them. We need them now.

    While I would never disagree that we need to keep City Hall honest in every regard, but the rage of people like Mr. Sawision is completely misguided and small-minded. Look up the government ladder. Waaaaaaaaaaay up. That’s where you need to start swinging.

  4. Steve A.: When Jane Pitfield made that comment to the Toronto Sun she wasn’t lying but she was being dishonest.

    Everything in Toronto’s budget could be called a wish but only because every year the City (technically) re-approves the entire budget. So although staff assume that the same level of service will be maintained year-to-year when they design the budget (unless Council has adopted policy that says otherwise), the way budgets are legislated is that no decision is made for any budget year except for the one they’re in (Council will approve their 2008 operating budget in March or April.)

    (As an aside: note that there are five year capital and operating plans so it’s not like the City is just flying by the seat of its pants, though Council isn’t legislatively obligated to follow that plan.)

    To give you a concrete example I’ll use the global TTC budget. There is no legislation that requires the City to fund the TTC so City Council, under its own free will, essentially, wishes the TTC to be in existence every time it adopts the operating subsidy, or at least that’s how Pitfield is making things out to be. I would see it a bit differently because to me there really are no two ways about it, the TTC isn’t a wish, it’s a necessity. But I guess that’s why Pitfield isn’t mayor.

  5. Consider me chapter 23 in the saga…’cept I don’t have a bunch of costumes to change into.

  6. People like George and that DMW blowhard go on and on about hidden amounts of money in the budget as if nobody has ever looked at the budget before. If so, then what where all the right wingers doing during those Lastman years ? Or during Miller’s first term? Its just a deflection from the fact that they have no concrete plan and would rather pander to people knee jerk reaction to taxes than to provide leadership.

  7. “So although staff assume that the same level of service will be maintained year-to-year when they design the budget” – some people would say that’s the problem in a nutshell – take last year and increment rather than do a root and branch review. If it’s not possible to zerobudget the entire City budget then perhaps departments could be zerobudgeted on a rotating basis.

    The problem with multi-year budgeting is that the numbers, particularly operating, hinge on support from higher levels of government which is capricious at best.

  8. hey everybody thanks for the positive suggestions. I think I have your attention.I am running in the provincial election and hopefully fixing this crisis by keeping involved. There are problems with the budget and especially spending.I had a great time at the “revealing” of the winners of the project to revamp nathan phillips square.I commented to stuart green that the buffet being served was quite elaborate,considering we were there to throw money at this project.He quickly jumped at me saying that all levels of government throw such a spread.Well I made it clear then that I am investigating spending at all levels.I just wish I had sheila frasier get a chance to do a forensic audit at the city.
    One thing I can tell you the citizens are pretty pissed at the attitude from city hall these days.They don’t appreciate the mayor and joe pantalone giving them the impression that all was ok,contrary to you all knew was the truth of the situation.But I will continue to try and figure out a way toget in there and solve this mess one way or another.I’m not the enemy folks!!!

  9. PS you don’t solve a problem by always throwing money at the problem!
    Let’s keep the right wing rhetoric in the closet I’m far from a right winger if you ever bother to get to know me!

  10. So…who wants to help start the Urban Party?