{"id":17291,"date":"2011-01-28T12:00:01","date_gmt":"2011-01-28T16:00:01","guid":{"rendered":"http:\/\/spacingtoronto.ca\/?p=17291"},"modified":"2013-01-21T15:18:16","modified_gmt":"2013-01-21T20:18:16","slug":"headspace-economist-hugh-mackenzie-discusses-the-citys-budget","status":"publish","type":"post","link":"https:\/\/spacing.ca\/toronto\/2011\/01\/28\/headspace-economist-hugh-mackenzie-discusses-the-citys-budget\/","title":{"rendered":"HEADSPACE: Economist Hugh Mackenzie discusses the City’s budget"},"content":{"rendered":"

\"\"<\/p>\n

\"\"<\/a><\/p>\n

This regular online series will feature interviews with fascinating and influential urban thinkers, with a focus on discussing how Toronto can become a more engaged, accessible, sustainable city.<\/em><\/p>\n

\"\"<\/a><\/em><\/p>\n

<\/em>Hugh Mackenzie<\/strong> is a research fellow at the Canadian Centre for Policy Alternatives<\/a>. A seasoned economist, he\u2019s examined Toronto\u2019s budget issues including an in-depth analysis conducted in 2010 on behalf of the Toronto Civic Employees Union. Spacing<\/em> asked him to probe some controversies surrounding the 2011 city budget.<\/p>\n

Spacing:<\/em><\/strong> What\u2019s your opinion on Rob Ford\u2019s decision to eliminate the Vehicle Registration tax?<\/p>\n

Mackenzie:<\/strong> If you look outside Toronto to other municipalities around the world, what you\u2019ll see is a broad debate about how to deal with congestion and how to encourage people to shift from private to public transportation options. That\u2019s where a vehicle registration tax makes sense. However, Ford was right that the tax discriminated against suburbanites versus those living downtown, as there are probably a lot more people in the centre of the city surviving without a car. If you\u2019re going to use the tax system to discourage car travel, it makes infinitely more sense to base a tax on use rather than ownership. That\u2019s why levying tolls on expressways that funnel people into the city, such as the DVP and Gardiner, would have been the better option. It provides the additional advantage of raising revenue from those living outside the city who consume Toronto services but don\u2019t contribute to Toronto\u2019s tax base. A case could also be made for a peak-hour surcharge on parking in the downtown area. Ultimately, it all has to be done in an integrated way. If you don\u2019t improve public transit but just levy charges, then all you\u2019re doing is angering people. That was the major issue with the vehicle registration tax.<\/p>\n

Spacing:<\/em> <\/strong>Do you think the city\u2019s public discourse has been hurt by too much negative hammering over taxes?<\/p>\n

<\/p>\n

Mackenzie:<\/strong> I would broaden it beyond the city. Public discourse in North America has been fundamentally damaged over the last 25 – 30 years by debates regarding taxes and public services in which the link between the two is ignored. In Ontario, we’ve had a 20-year-long debate about levels of taxation without any reference to what the implications are for public services. When was the last time you heard a government say, \u201cWe need to improve a particular service by increasing taxes?\u201d Regarding the municipal election, I believe <\/em>anyone who says you can take $50 million or $2 billion out of the Toronto budget without cutting public services is lying to you. They either know that their promise is not true and they\u2019re just saying it or maybe they don\u2019t understand, in which case they shouldn\u2019t be permitted to make such statements.<\/p>\n

Spacing: <\/em><\/strong>Is the suggestion that Toronto \u201clive within its means\u201d realistic?<\/p>\n

Mackenzie:<\/strong> I\u2019m not exactly sure what that means because the government\u2019s means consist of what citizens are prepared to pay for the services they\u2019re provided. A city\u2019s means aren\u2019t fixed. A government\u2019s means are determined politically, just as government expenses are determined politically. To say that the City should \u201clive within its means\u201d is to say nothing whatsoever. It only masks an argument for less services. When people make that suggestion, it\u2019s undisclosed code for, \u201cWe know the cost of what we\u2019re currently doing is going up and we\u2019re not prepared to see taxes go up every year to pay for it. Therefore, every year we\u2019re going to have to reduce the amount of services being provided.\u201d<\/p>\n

Spacing:<\/em><\/strong> Is the Ford\u2019s decision to freeze property taxes for 2011 a wise move?<\/p>\n

Mackenzie:<\/strong> I think it\u2019s crazy. I bet that if you walked out on the street in Scarborough or wherever Ford got support, and asked people if it\u2019s possible to cut property taxes without cutting services they would tell you that you\u2019re crazy and it doesn\u2019t work. People don\u2019t expect to get something for nothing. Ford didn\u2019t need to freeze property taxes. He was probably unaware during the campaign that the City\u2019s finances were strong heading into 2011. Then he got his budget briefing from the City treasurer which showed a surplus of $200-250 million. Ford and his advisors knew exactly what they wanted to do with it. Ford is cut from the same ideological cloth as Jim Flaherty and Mike Harris. What they\u2019re about is reducing the fiscal capacity of government. Anytime you freeze property taxes, that\u2019s revenue that is lost to the City forever.<\/p>\n

Spacing:<\/em> <\/strong>Is eliminating extraneous expenses the best solution to Toronto\u2019s chronic budgetary problems, as Ford suggests?<\/p>\n

Mackenzie:<\/strong> No. Toronto has budgetary problems because the system of local finance in Ontario is designed to turn municipalities into supplicants to the Provincial government for money. The three major problems inherited from the Province are: one, the enormous deferred maintenance backlog in housing stock inherited after the housing system was downloaded in the late 90\u2018s; two, sharing the cost of welfare; and three, the elimination of capital and operating subsidies for public transit. Since 1996, the City has been struggling to achieve a balance between the fare box and property taxes as a source of revenue for the TTC. The City\u2019s budget problems are not about council meals or whether the expense allowance is $50,000 or $30,000. This is about big-picture political decisions made at Queen\u2019s Park. It doesn\u2019t matter what Rob Ford does with incidental expenditures because it won\u2019t alter the fact that every spring there will be a jousting match over the City\u2019s budget.<\/p>\n

Photo by Steve Hoang<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This regular online series will feature interviews with fascinating and influential urban thinkers, with a focus on discussing how Toronto can become a more engaged, accessible, sustainable city. Hugh Mackenzie is a research fellow at the Canadian Centre for Policy Alternatives. A seasoned economist, he\u2019s examined Toronto\u2019s budget issues including an in-depth analysis conducted inContinue reading “HEADSPACE: Economist Hugh Mackenzie discusses the City’s budget”<\/span><\/a><\/p>\n","protected":false},"author":4094,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ngg_post_thumbnail":0,"_ef_editorial_meta_paragraph_assignment":"","_ef_editorial_meta_date_first-draft-date":"","_ef_editorial_meta_checkbox_needs-photo":"","_ef_editorial_meta_number_word-count":"","footnotes":""},"categories":[21759,2],"tags":[12285,4896,16919,12266,16913,4584,175,16914,2537,16916,1529,1154,636,16912,872,6667,16917,316,16453,227,89,16915,46,19,16918,391],"class_list":["post-17291","post","type-post","status-publish","format-standard","hentry","category-features","category-politics","tag-advisors","tag-canadian-centre","tag-canadian-centre-for-policy-alternatives","tag-car-travel","tag-city-treasurer","tag-economist","tag-head-space","tag-hugh-mackenzie","tag-jim-flaherty","tag-local-finance","tag-mike-harris","tag-north-america","tag-ontario","tag-private-to-public-transportation-options","tag-provincial-government","tag-public-services","tag-public-transportation-options","tag-queen","tag-regular-online-series","tag-rob-ford","tag-scarborough","tag-steve-hoang","tag-taxes","tag-toronto","tag-toronto-civic-employees-union","tag-usd"],"acf":[],"yoast_head":"\nHEADSPACE: Economist Hugh Mackenzie discusses the City's budget - Spacing Toronto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/spacing.ca\/toronto\/2011\/01\/28\/headspace-economist-hugh-mackenzie-discusses-the-citys-budget\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HEADSPACE: Economist Hugh Mackenzie discusses the City's budget - Spacing Toronto\" \/>\n<meta property=\"og:description\" content=\"This regular online series will feature interviews with fascinating and influential urban thinkers, with a focus on discussing how Toronto can become a more engaged, accessible, sustainable city. 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