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The Latest Challenges to the New Deal
24/08/2004

In the past week or two, there has been criticism of both the federal and Ontario governments in terms of their commitments to the "new deal for cities".

An editorial last week in The Globe and Mail slapped Ottawa for talking about spreading fuel tax money across all of Canada's municipalities on the basis of population. They wrote: "This is not a cities agenda. This is an everybody agenda."

However, I don't think there is anything terribly wrong with such a move. The Globe writes that Ottawa's idea is actually "a failure to recognize the most compelling reason for a "new deal for cities": that Canada's major cities, the engines that drive the country's economy, are under intense financial pressure and need dedicated relief if they are to continue to attract investment and keep themselves in good repair." But, as far as I can tell, a fuel tax that is allocated by population to municipalities nation-wide is, indeed, a form of dedicated funding. And, it is one that Toronto could benefit from, since it would, hopefully, be funding that is reliable and that grows with the economy each year.

As I see it, there are actually two levels of new deal:

  1. The Big New Deal for Cities, that gives municipalities the authority, accountability, autonomy and taxing power that allows them to flex their muscles and solve their own problems
  2. The Small New Deal for Cities, that gives municipalities reliable funding that grows with the economy and is sufficient for the (in some cases, unique) needs of the metropolis

If the feds come through with a significant amount of fuel tax money, in any form, and if they also come along with money targeted for specific urban issues -- like help dealing with immigration -- then I think they can get a passing score.

On the other hand, the move that Dalton McGuinty tried to pull this week -- cutting the big city mayors out of the picture, to negotiate directly and exclusively with an all-encompassing umbrella organization -- is definitely disappointing.

Setting aside the perverse heritage of recent Ontario-Toronto relations -- like this blatant piece of theft, as an obvious example -- Premier McGuinty needs to recognize that there are a great many issues of provincial responsibility that play out completely differently in a major city like Toronto. Negotiating with an organization that represents 400 municipalities won't work when there are many specific things that need to be done in the largest few of those.

As I write, I'm not sure how the situation will unfold. Today's Globe suggested that the Association of Municipalities of Ontario is backing down from trying to monopolize municipal-provincial relations. (It includes some support from provincial PC leadership candidate John Tory.) On the other hand, here's tonight's press release about McGuinty's promise to the AMO.

Anyway, the watering down of the New Deal at both federal and provincial levels can be attributed to the same source -- political expediency. I'm prepared to give these guys some more time, but we may soon have to roll out Plan B... We can call it the "Municipalities Party of Ontario" until someone comes up with a catchier name.


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