Uploading move good but slow

TheStar.com – Opinion – Uploading move good but slow
November 01, 2008

It won’t happen as quickly as urban advocates would like, but a newly announced deal between Ontario and its hard-pressed municipalities goes a considerable way toward lifting a historic burden from them.

In the deal announced yesterday, the province has agreed to “upload” the cost of all welfare benefits from municipalities (which now pay 20 per cent of the cost) by 2018. An important principle is thus underlined – income support programs are best paid through the income and sales taxes, not through property taxes. Collectively, Ontario’s municipalities stand to save more than $400 million yearly from this shift.

Also to be uploaded is a $125 million annual bill pressed onto municipalities for court security and transporting prisoners.

It is unfortunate that nothing will be done on either of these fronts until 2010. That’s when the first stage of the welfare shift kicks in. A start on the uploading of court costs is being delayed until 2012.

This adds up to a rather long gestation period for uploading, coupled with a painfully slow delivery.

It is impossible to predict even who will be premier a decade from now, when the process is supposed to be completed. No wonder there are complaints that this is taking too long.

But with the current economic outlook subject to “enormous uncertainty,” as Finance Minister Dwight Duncan put it yesterday, and the province facing a $500 million deficit, an agreement in principle – with stretched-out delivery of actual dollars – is the best outcome that municipalities could realistically have expected.

On a hopeful note, Duncan left open the possibility that the rollout could be accelerated if the economy were to improve to a satisfactory degree.

Any meaningful deal delivering fairness to cities needed to satisfy two criteria: specific services, involving considerable amounts of money, had to be identified for uploading; and there had to be a hard, clearly defined point at which that uploading would start. The agreement announced yesterday delivers on both counts.

That being said, it does have gaps. Municipalities failed to reach agreement with Queen’s Park on a host of contentious issues, including uploading the cost of social housing (downloaded by the previous Conservative government), letting cities increase their development charges, and restoring responsibility for some downloaded highways to the province. These are significant burdens. Social housing, alone, will cost Toronto more than $330 million this year.

As well, with Canada’s economy sliding toward recession, municipalities could soon face a dramatic – and expensive – spike in their welfare bill. Yet none of that burden is to be uploaded in 2009. Conversely, some question the wisdom of having Queen’s Park absorb the entire municipal share of welfare benefits, since this could leave municipalities without an incentive to keep costs under control.

Those concerns notwithstanding, this long-awaited agreement between municipalities and the province is a welcome development. While it won’t end the debate over downloading, the deal marks a significant step toward that desirable destination.

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