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Index for my Toronto Budget 2004 project
Three Flavours of New Deal
14/01/2004

People keep talking about the New Deal for Cities, but really, I see at least three different flavours of new deal.

One version of the New Deal is very simply about getting more money, and more reliable funding. Cities don't have the cash they need, and are living year-to-year on special grants. This idea is about giving cities some sort of perennial funding from the higher levels of government. Martin and McGuinty are both talking this language when they make promises about diverting a share of the gas tax to municipalities.

Glen Murray in Winnipeg takes things one step further. The New Deal that he talks about includes getting more money and more reliable funding, but goes beyond that to restructuring. Murray wants to rearrange the whole tax system to improve the economic signals that it sends. He's thinking about taxing consumption instead of buildings, using fees to reduce waste, and generally implementing changes that promote urbanity and decrease environmental impact.

The third flavour of New Deal is the one that I have written the most about, but I'm not sure if it applies outside of Ontario. This one isn't about getting more money, per se. It is more about rearranging who does what so that expenses that ought to be paid by property-tax-raising municipalities are allocated to municipalities, and expenses that ought to be paid by income-taxing higher-order governments are allocated to them. Of course, in the Harris years Ontario already rearranged "who does what", but it was done in a way cynically designed to extract as much money as possible from the cities to pay for tax cuts elsewhere.

As far as I'm concerned, this last sort of New Deal is what Toronto needs more than anything else. It would be great if we could do some of the innovative things that Murray has been talking about, but really Toronto just needs to roll the clock back to pre-Harris days.

I guess we could call that an Old Deal for Cities.


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