Toronto’s budget will hit $13.5 billion this year, but our finances are not keeping up with the exponential pace of growth. Frustration is building, and with it a political movement to free the city from its provincial masters.
If you’ve been to Toronto City Hall recently, you may have noticed something off about the giant replica model of our skyline that sits in a corner of the rotunda.
There’s a second CN Tower.
Actually, it’s half a CN Tower, which has seemingly been placed haphazardly near the actual one beside the Rogers Centre. One of the CBC’s city hall scribes recently asked on Twitter: “Is this meant to represent some dystopian future?”
Let’s hope not. The cranes crowding our skies suggest Toronto is booming. But it’s also fracturing. The cracks in transit, housing, childcare, public health – you name it – are widening inside and outside the core.
On January 10, the city officially launched its budget for 2020. Spending this year will hit $13.5 billion. But our finances aren’t keeping up with the exponential pace of growth. There’s a lingering $3-billion hole (and growing) between what we spend and what we take in every year.
Toronto, we have a revenue problem. Even our PC mayor, John Tory, has acknowledged as much (sort of) with his proposal for a designated 8 per cent property tax hike to cover the costs of new public transit and housing projects. Only he’s not calling his tax a tax. He’s calling it a way of holding other levels of government to their financial commitments for future projects. “Toronto has to be prepared to put money on the table if we’re ever going to get these things built,” he says in an interview with NOW.
But ever since Godzilla (aka Doug Ford) ambled down from Queen’s Park and vaporized council (cutting it in half from 47 to 25 members) – and then cut the hell out of provincial subsidies to the city – there’s been a noticeable increase in the democratic deficit in relations between the province and city hall.
“It’s broken,” says Spadina-Fort York Councillor Joe Cressy.
The frustration is building, and with it a political uprising that hasn’t been seen since Mike Harris forced amalgamation on the city back in the late 90s.
But unlike past efforts by the city to gain more independence from its provincial masters, this one is aiming high: for a legal exemption to declare Toronto a charter city and enshrine special taxing powers and responsibilities in the constitution.
And it’s got legs – not the least of which is the backing of the feds’ housing and urban affairs point person in Toronto. Vaughan lets it be known during our interview that he’s planning to meet with finance minister Bill Morneau to discuss financials this week.
“It’s time for a national discussion on the place of cities in our federation,” says Spadina-Fort York Liberal MP Adam Vaughan.
And nowhere is the need for that conversation more pronounced than in Ford’s Ontario.
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An estimated 90 per cent of all tax dollars generated by the city go to senior levels of government.
Doug Ford’s promise of more efficient government hasn’t materialized.
Yes, fewer politicians at city hall has meant shorter council and committee meetings. But with councillors now managing wards twice their former size (on average 110,000 people), there’s barely any time to return constituent calls, never mind attend community meetings or deal with the larger issues affecting the city.
Councillors are feeling a little like Howard Beale these days, the “mad prophet of the airwaves” portrayed by Peter Finch in the movie Network, who’s famous for the phrase: “I’m mad as hell, and I’m not going to take it anymore!”
Toronto is growing by leaps and bounds – or bursting at the seams, depending on your perspective. Every year the GTA welcomes some 100,000 new residents and many of them settle in Toronto.
We’ve heard the numbers before. Toronto is the sixth-largest government in Canada (soon to be fifth), accounting for 10 per cent of the country’s gross domestic product. That’s twice the economic output of the four smallest provinces in the country combined.
But an estimated 90 per cent of all tax dollars generated by the city go to senior levels of government. As a consequence, the demands on city services are far outstripping our ability to pay for them through property taxes alone, which accounts for almost half the city’s revenues.
Cities are often referred to as “creatures of the province.” It’s worse than that. Practically every decision the city makes is subject to provincial approval or regulations of one form or another.
Not to go to overboard, but that can sometimes mean the difference between life and death if you think, for example, of the province’s cuts to funds for safe injection sites to deal with the opioid crisis. Or, for that matter, the time it takes to get simple things like red-light cameras in school zones approved while pedestrian deaths mount.
It’s also why we end up stuck with one-stop subways in Scarborough that cost $3 billion (and counting). And legislation like Bill 5 rammed down our throats.
Doug Ford’s Better Local Government Act paved the way for the province to intervene in Toronto’s elections at the 11th hour shortly after Ford took power in 2018.
A blitzkrieg of cuts touching everything from public health to childcare rained down from Queen’s Park shortly thereafter.
It’s a little hard to remember now, but for a time shortly after Ford took power, there wasn’t a day that went by without some new order from Queen’s Park.
Councillor Josh Matlow, who authored a motion passed by council to have the city manager officially study what a charter for Toronto might look like, describes a “visceral” anger still lingering from that move.
To be sure, the city challenged Bill 5 in court. And the court looked the other way, despite clear language in the City of Toronto Act (COTA) signed by the city and province back in 2006 that requires the province to consult and cooperate on any decision affecting the city.
Former Toronto mayor David Miller, who brokered that deal and is another prominent voice supporting the charter effort, describes the court’s decision as “egregious.”
“I’m not a constitutional lawyer, but consultation and cooperation between levels of government should be fundamental to democracy,” he says in an interview. The city has asked leave of the Supreme Court of Canada to review the decision, but it’s unclear when (or if) that will happen.
A number of cities in the U.S., including New York and Chicago, have charter status. But it’s unfamiliar territory in Canada. Calgary and Edmonton had something resembling charter status, until Alberta premier Jason Kenney revoked them back in October amid deep cuts in provincial grants to municipalities. Sound familiar?
But the amending formula Toronto is seeking to use to win more autonomy has only been used a handful of times, and only by provinces. New Brunswick used it to win linguistic rights. The governments of Quebec and Newfoundland & Labrador used it to eliminate constitutional requirements for funding of denominational schools. It’ll be a high threshold to overcome. But this is not just a local movement.
Other Canadian cities are exploring the charter option. Vaughan says the frustration we’re witnessing in Toronto is also playing in Vancouver and Victoria out west, which, if all goes well could be the first cities with charters.
Vaughan says we don’t live in 1867 anymore, which is when the current arrangements setting out relationships between the three levels of government were written. Canada was still a collection of large towns back then. Now, 80 per cent of Canadians live in cities. He says charter status will give cities the “constitutional space” they need to grapple with the problems facing them. “The old rules have outlived their usefulness,” says Vaughan.
Cities, he says, are also the level of government best positioned to respond to the most challenging issues of our times, including climate change and social equity – not to mention land -use planning. In Toronto, the latter is a big one, which is partly the reason Matlow finds himself front and centre on the charter city file.
His St. Paul’s ward straddles some of midtown’s tonier neighbourhoods. But they’re also quickly becoming some of the city’s most crowded. The city spent years on development plans for both midtown and downtown (Midtown in Focus and TOCore), only to have the Ford government scrap it all and open the door to taller towers.
Officially, the added density was to pay for all those great ideas the Ford government has for transit in Toronto. But the province also rescinded the city’s power requiring developers to pay for community infrastructure like parks, libraries and child care spaces as part of the approval of their projects.
Ford’s capriciousness knows no bounds. We knew that. But would Toronto even be talking about getting charter city status if Doug Ford wasn’t premier?
Matlow says for many “there’s a sense that the current government at Queen’s Park is out of control.”
While Ford’s actions have provided a major impetus for the Charter City effort, it’s also true that successive PC and Liberal governments have been putting the screws to the city since pretty much forever.
Harris not only forced amalgamation on Toronto (taking the city’s education tax base with it) he also buried the Eglinton subway. The McGuinty government put a stop to Transit City.
Critics say charter city status in the U.S. hasn’t always insulated them from the stresses that accompany exponential growth.
The other side of that argument is that Toronto is also the economic engine of Canada, and that we need revenue and planning tools to keep up with growth.
Others, argue that the city already has the tools to boost revenues in the COTA. There’s just not the political will to use them. That’s the province’s argument.
“The City of Toronto Act already provides Toronto with additional powers that other municipalities do not have,” says a spokesperson for Minister of Municipal Affairs Steve Clark in an email response. “Many elements of the group’s proposal, such as providing the city with authority over municipal roads and the requirement that the city maintain an effective accountability regime, already exist.”
The Act gives the city the power to tax tobacco, alcohol sales, movie admissions and sporting events, as well as parking spaces. The Act also gives the city authority to levy a land transfer tax on home sales and a vehicle registration tax.
The latter was implemented in 2008, and then removed when Doug’s brother Rob became mayor in 2010. The tax proved a populist lightning rod for the regime’s “war on the car” rhetoric. The Ford regime also later looked at getting rid of the land transfer tax, but quickly recognized that would be courting financial disaster.
Miller says he hates to think of where Toronto would be now without the nearly billion bucks the tax brings to city coffers. He describes the COTA as “a significant first step” to increased city autonomy. But it’s no charter.
In fact, at the time the city was negotiating a companion agreement with the feds “that would have made it very difficult for the province to act arbitrarily,” Miller says, in decisions affecting the city. But the Paul Martin government of the time fell, and with it went that idea.
According to a 2105 study by the Canadian Centre for Policy Alternatives, the city would still be $2.5 billion short of closing its $3 billion revenue gap even if it used all COTA taxes at its disposal, including road tolls.
They are the big taxing power included in COTA. But the city needs provincial approval for that. Tory found that out when he ventured up to the province in 2017. He was rebuffed by Kathleen Wynne. He remarked back then about “being treated like a little boy in short pants.” He still does, on any number of issues. “There isn’t a week that goes by that I’m not heading up University [to Queen’s Park] to deal with one thing or another,” Tory tells NOW.
But on the issue of a charter, he is more circumspect. And part of the reason for that has to do with general antipathy toward Toronto from the rest of the province.
“That makes it very difficult for any premier,” says Tory.
That’s part of the problem, says Vaughan.
“No city contributes more to the federation than Toronto, yet no city is as reviled.”
Meanwhile, back at city hall, Social Planning Toronto has released its report on the city’s finances in the lead-up to the budget. It describes “a perfect storm of rising inequality” in the city. And the need for council “to do the right thing and choose to invest in our collective well-being with new revenue tools.” The group is calling for bringing back the vehicle registration tax, increasing the land transfer tax on luxury homes and a new tax on vacant homes.
The reverberations of austerity are still being felt, says Matlow.
But he has to cut our conversation short. “Can I call you back later? I have a boys and girls club to save.”