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Downloading and Tax Rules Continue to Punish Toronto
17/02/2003
Royson James is another good City Hall columnist. He writes for the Toronto Star. On February 12, he wrote a column about Toronto city councillors complaining that they must pay for the homeless who come to this city from all over Canada and all over the world. His point was that Toronto also benefits a lot from the successful people that also come here from all over the world. He's right, but I wrote back to him with the following:
Hi Royson, You probably already know this, but the reason councillors ought to be mad that all these homeless come from everywhere but Toronto is because nowhere else wants to help us pay for it. Instead Queen's Park decided that this should "ideally" be covered by property taxes... what better way to make the city of Toronto pay for its liberal excess, right? You're right about taking the bad with the good. Exactly what we should do. But, it's a bit hard when the good -- Toronto's wealth -- is siphoned off in income tax to the province, but the bad -- our needy -- must be paid for by property tax. This is the real story. I know you know that and write a lot of good columns. Too bad the Toronto Star worked so hard to support the megacity. -Andrew
He never wrote back, but I'll consider today's column to be a good enough answer, whether it was intended for me or not. He addresses my points directly. (Well, all except for that last one.) James writes:
The problem is Toronto has too many costly services to provide and too few revenue sources to pay for them. In case we forget, Toronto pays a quarter of the welfare bill, has a $120 million budget for emergency shelters, pays more for policing than it takes to run the entire city of Mississauga, picks up payments for ambulance, fire, water, public health, highways like the Don Valley Parkway and Gardiner Expressway, roads, sewers, waste management, recreation and parks. This is the only Ontario city with a subway. There are only two subway cities in Canada. Yet, while Montreal gets some gas tax revenues (as does Vancouver and Edmonton and Calgary), Toronto gets nothing. Our provincial government thought it wise to dump all the cost of housing on the city, an unconscionable decision taken to ease the burden on the provincial coffers. There was a time when Queen's Park was a willing partner. Under premiers like Leslie Frost, John Robarts and Bill Davis, the province sent generous grants to the city to maintain a vibrant urban region. It only made sense. Queen's Park gets its revenues from many sources, including taxes on income, property, retail taxes, consumer products and others. During boom times the money just rolls in. Cities, meanwhile, have no such security and must depend on the narrow property tax revenue. As if that wasn't a bad enough discrepancy, the province dumped costs on to the city in order to relieve its own budgetary demands. When the Mike Harris government amalgamated the municipalities in Metropolitan Toronto in 1998, it saddled the new city with many more costs than before, and no new revenues. The provincial auditor has confirmed that Toronto got taken to the cleaners by the province at the onset of amalgamation. Since then, Lastman has been forced to trudge up to Queen's Park to get help. First, he got a $50 million loan (a pittance compared to the more than $200 million a year the province stole from the city) and a $100 million loan. The next year, another $100 million loan followed. Then it was a bailout grant. And this year, the city is seeking $80 million. It seems like Toronto can't manage its affairs. The reality is, what has happened is predictable and was predicted. If you add costs to a city's ledger and give it no new revenue source, you'll get exactly what Toronto has delivered: budget after budget of revenue shortfalls. What's even worse is the province delivered a kicker, a killer boot in the teeth. Cities raise their taxes on the backs of business, industry, apartments and homeowners. This spreads the pain around and makes it not too onerous for any one group. But under provincial policy, Toronto can't tax its businesses, industry or apartments. Queen's Park says these groups already pay too much taxes. So, if the city wants more money to pay for waste management or police or TTC, all the money must come from homeowners. It's a disastrous policy.
And it's a bit worse than that. Thanks to Current Value Assessment, these tax increases are primarily focused on the residents of the old city of Toronto, rather than suburban parts of Metro. If there's any good news, it's that we may be able to see light at the end of the tunnel. First, there are rumours that tomorrow's federal budget is going to help us out. Second, there is a provincial election coming soon. At a recent public meeting, I heard my MPP Michael Bryant say that if his party forms the next government, they are committed to:
  • Relieving the property taxpayers' burden
  • Making contributions to the city
  • Revisting David Crombie's Who Does What findings
This last point is key. Bryant said several times that it feels the city should be responsible for "hard services" like garbage removal and the province should be responsible for "soft services" like welfare. This will help a lot.
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