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Royson's 101 Reasons
12/03/2005

If one thing is becoming clear, it is how the Ottawa-Ontario and the Ontario-Toronto legs of the "fiscal imbalance" are related.

Here's a quote from an article in the Globe and Mail today:

Dalton McGuinty says the gap between what the province contributes to the federal treasury and what it receives from Ottawa has soared to $23-billion today from just $2-billion in 1995. The roots of that increase date back to 1995, when the federal government began offloading much of the responsibility for financing of social programs to the provinces.

Not too long after that, Mike Harris turned around and did the same thing to municipalities in Ontario. I still maintain that he had a choice -- either slow down on the tax cuts, or create a municipal fiscal imbalance -- and he chose to screw download to the cities.

In both cases, the senior government left the junior government in the lurch for certain programs, while continuing to collect taxes from those jurisdictions at an increasing rate. This is true of both Ottawa and Queen's Park.

The difference, however, is that Ottawa is generally shifting money from Ontario and Alberta to provinces that have some need for the money, while leaving all provinces with the fiscal tools required to meet their needs. Don't get me wrong -- there is certainly an unwelcome political aspect to Ottawa's financial shifts, as well. But, the contrast with Ontario is that in this province some needy areas (i.e., some municipalities) are left without the fiscal capability to sustainably solve their own problems.

Which brings me around to today's Toronto Star. Royson James lists 101 reasons for a new deal for Toronto. (10 on the front page and 91 inside.)

Nevermind the fact that the Toronto Star and Royson James were primary cheerleaders for the megacity amalgamations that made downloading possible, at least they get this right:

Between now and December, when the act is to be introduced in the provincial legislature, citizens will hear much talk about respect, self-governance, strong mayor, own-source revenues, uploading. These are important, but only if they don't eclipse the key demand:

Remove social service costs like welfare and housing from the city's budget. Failing that, give the GTA a portion of the sales and/or income taxes that are generated here. Failing that, give the region the power to add its own income or sales tax.

Anything less leaves Toronto a once-rich uncle expected to bankroll the excessive lifestyle of a much-too-large and expanding family, even as the empire dwindles.

Let's review a selection of Royson James' 101 Reasons:

17. Toronto's demographics cry out for special assistance. The poor, the aged, new immigrants, refugees, the homeless and people down on their luck flock to Toronto more than any other Canadian destination. The confluence of the vulnerable and the bright and energetic pioneers drawn to Canada's economic powerhouse requires the nation to give Toronto special treatment.

Right problem, but not exactly the right solution. These difficult demographics don't really require special treatment. They just require programs that are paid out of federal or provincial income tax instead of local property taxes.

23. Toronto pays $500 million a year towards social service and housing costs. Montreal and Vancouver have no such burdens.

29. [A new deal] would reverse a crippling, made-in-Ontario trend: Nova Scotia and Manitoba uploaded social services costs from municipalities in the 1990s. Ontario's Mike Harris did the opposite, crushing Toronto.

Reasons 23 and 29 suggest something that I've been arguing for a while. Canada doesn't need a new deal for cities as much as we need to reverse what was done in Ontario in the late 90s.

36. Toronto needs a new deal because it is unique as this region's hub city, one of five in Canada. It has less than half the GTA population but 71 per cent of the low-income families, two in three poor children and seniors and single moms, 80 per cent of the homeless, three-quarters of tenants.

9. More than $10 billion in net taxes generated in Toronto is used to subsidize the rest of Canada while this city languishes, cash-poor, unable to tap into sales and income taxes.

Compare reasons 36 and 9 and you'll see why the downloading that sent social-service costs to municipalities while maintaining income and sales taxes at the federal and provincial levels has been so tough on, and unfair to, the city.

Reasons 63 and 64 are infuriating and indefensible, but I won't repeat them here.

But I do have some additional reasons of my own:

102. Dumping social costs onto property taxes, and collecting provincially pooled taxes on the basis of current value assessment, together create significant discouragement for urban life, and drive sprawl.

103. Besides the ecological damage and inefficiency of sprawl, thinkers like Jane Jacobs have shown that it is the diversity and complexity of cities -- and the interactions and opportunities that result -- that encourage innovation and drive much of our economy. If government policies discourage cities by driving up our taxes and leaving social needs underfunded, this hurts our future.

104. Many feel that sprawl and suburbia represent a diminished enjoyabilty of living. Others disagree. But why should those of us who like living in the city pay a government-created financial penalty for doing so?

Anyway, the Toronto Star claims credit for leading the New Deal campaign over the past 4 years. If today's paper is any indication, they are gearing up the fight as we work towards the new legislation. Let's just hope they keep their eyes on the ball, because the difference between a great reform and a weak one will just seem like nuance to the casual reader. The Star, as they did today, needs to keep the focus on the changes that matter, so McGuinty can't pass off something similar but unsatisfactory.


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