Two perspectives on Toronto in the early, chilly weeks of 2019:
In much of the city, shining new towers rise as we remake the urban landscape. Tens of thousands of newcomers arrive every year. More tech jobs are being created than anywhere else in North America — including Silicon Valley. House prices remain at nosebleed levels.
Meanwhile at City Hall, the usual suspects line up to plead for more help. There’s not enough in the annual city budget for child care, recreation spaces, transit or young people, they say. We’re being left behind.
How is it that such a rich city, growing richer by the year, can’t afford to properly support those struggling to keep up?
The answer, of course, is that it can — but chooses not to. Year after year, through the politicians we select to lead us, we choose not to pay for the kind of services worthy of the major metropolis we’ve become, somewhat despite ourselves.
This year is no exception. The proposed $13.5-billion budget that city council will vote on March 7 will continue the trend of keeping both taxes and spending low — lower than they ought to be if we want to live up to our professed principles as a truly inclusive city that’s confident about its future in the front ranks of major urban centres.
And spending is low. A few shrill voices on the right squawk on about waste at City Hall, but the facts show the city is actually spending less per resident now than it did back in 2010, when the figures are adjusted for inflation.
Nine years ago, it spent $4,480 for each resident in 2018 dollars. Last year the number was $4,313, a decline of 3.7 per cent in real money. This year’s proposed budget will continue that trend.
But how does Toronto compare to other cities? One measure is the annual growth in spending over the past few years, and there it turns out Toronto ranks right near the bottom — 27th out of 29 Ontario cities listed in a Fraser Institute survey last fall.
All this is happening as the city grapples with challenges that go far beyond the traditional responsibilities of municipal governments — roads, sewers, street cleaning and the like.
As municipal finance expert Enid Slack, of the Munk School at the University of Toronto, points out, cities now have to deal with issues like climate change, the opioid crisis, social housing and an influx of asylum seekers. “You’ve got all these increasing demands on the spending side,” she says, “and no corresponding increase on the revenue side.”
There’s the rub. Toronto doesn’t have a spending problem, despite the lazy “gravy train” rhetoric of the past few years. But it does have a big revenue problem. In fact, as the Canadian Centre for Policy Alternatives observes in a recent study, Toronto is the “poster child” for how cities lack the ability to pay for what they need to do in the 21st century.
The available “revenue tools” aren’t up to the job. Property taxes by themselves don’t bring in enough money, especially when politicians vow to keep them low in the name of “affordability.”
That’s been the case for years now under both mayors Rob Ford and John Tory, who made keeping increases in property tax to the rate of inflation a cornerstone of his campaign last year for re-election. His main rival on the left, Jennifer Keesmaat, went along with that.
As a result, this year’s proposed budget will raise taxes by just 2.55 per cent, in line with the cost of living, or an average of just $104 more per year for the average homeowner. There will be increases in water services, waste disposal and recreation fees as well.
But overall, Toronto property owners will continue to get a real bargain. They’ll enjoy the lowest property taxes in the entire region, while benefitting from the huge run-up in house prices over the past decade.
As always, though, you pretty much get what you pay for. And what you get in Toronto is largely a make-do budget that maintains existing services but doesn’t do much for those struggling to keep up in an increasingly unaffordable city. It relies on money that hasn’t yet appeared from Ottawa, and on raising transit fares at a time when they should be frozen — if not reduced. It falls short of funding promises council has made in recreation, library hours and other areas.
There is a better way, though it’s not one we expect this city council to take any time soon. The city should, to start with, increase property taxes above the rate of inflation. After years of keeping them so low there’s room for an increase. It could even introduce a progressive element into property taxes by putting a higher rate on the most expensive homes.
The city should also renew efforts to find new “revenue tools,” something Mayor Tory has freely acknowledged is needed. The current provincial government would no doubt slap that down, as the Liberals did two years ago when Tory proposed putting tolls on the Gardiner Expressway and Don Valley Parkway. But the discussion shouldn’t be allowed to die away completely.
Toronto has a choice. It can keep doing just enough to patch together a balanced budget, year after year. Or it can face up to the challenges of paying for the growing needs of a major metropolis.
On March 7 we’ll find out where this city council stands.
https://www.thestar.com/opinion/editorials/2019/02/15/toronto-needs-to-pay-for-the-needs-of-a-major-metropolis.html
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