The City of Toronto can’t afford any longer to limp along with budgets held together with duct tape and string.
After a marathon 15-hour debate last week, the city adopted a $10.5-billion operating budget after the usual battles over where to trim, which fees to increase, and how much of its rainy day reserve fund it will have to raid to patch over the gaps. Oh, and a voter-friendly increase in property taxes of just 2 per cent.
But it’s dawning on more and more councillors that none of this is enough to set a proper path forward for a city with the size and ambition of this one.
Toronto’s infrastructure and social housing stock is crumbling and it has $33 billion in unfunded capital projects. The city badly needs substantive and stable financial support from the provincial and federal governments if it is to be able to do any kind of long-term planning and fulfill its tremendous potential.
Happily, Mayor John Tory seems to have reached the same conclusion. Last week he went on a multi-day road show to push for long-term funding support for the city and urge a “vigorous” debate on how cities are financed. The mayor should get the full support of council and all those who share his view that Toronto has outgrown what he labeled the “prehistoric handcuffs” that are threatening to hold it back.
As he told a TV interviewer: “The days of being told that we have to limit ourselves to regressive property taxes that don’t grow with the economy, those days should be over .”
Tory signalled he does not intend to give up on implementing new revenue tools, such as road tolls on the Don Valley Parkway and Gardiner Expressway, despite Premier Kathleen Wynne’s refusal to give the city permission to do so.
More importantly, he served notice that he expects the province not to just approve new revenue tools for long-term financial planning, but to pony up its share of infrastructure costs.
It’s about time. For decades the federal and provincial governments have downloaded costs in areas like social housing and infrastructure to cities.
Consider the cost to the city of social housing, alone. Three years ago Toronto approved a 10-year, $2.6-billion plan to address the backlog of repairs for Toronto Community Housing that was supposed to be financed jointly by the city, province and federal government. But neither Queen’s Park nor Ottawa has stepped up to pay its share.
As a result, TCH expects to close 425 units this year because they are uninhabitable. In 2018, if it doesn’t get more funding it will have to shut another several hundred units. And this is happening when almost 200,000 people are on the wait list for affordable housing in Toronto.
Starving Toronto of ways to pay for its needs doesn’t make financial sense for the city, the rest of the province, or indeed the country.
As Tory told the Empire Club last Tuesday, the city is home to fully 20 per cent of all Canadians and generates more than 18 per cent of the national GDP . “And yet we make up just 1.3 per cent of general government expenditures in Canada.”
“A city that generates so much economic prosperity for our country, especially if denied the opportunity to address its own finances, cannot continue to receive so little investment in return,” he argued.
Tory has made five new demands of the provincial government. He wants it to share costs on large transit projects such as the Eglinton East light rail line, waterfront transit, and downtown relief line. He wants it to match costs for new investments in social housing and for tackling the massive repair backlog. He wants it to provide land for new affordable housing projects. He wants it to contribute significant funds to development of the Port Lands.
And he wants it to help the city pay for operation and maintenance of the Gardiner and DVP now that Queen’s Park has nixed his plan for tolls. These are the kind of big measures the city needs to get on a sustainable path to the future. When the Wynne government vetoed the city’s plan for tolls, it opened the door to demands like this. Its promise of an extra share in the provincial gas tax amounting to $170 million in a few years doesn’t cut it.
Tory has strong arguments to make in favour of much more significant funding for the city and this is the time to make them. A stronger Toronto will be good for all of Ontario, and all of Canada.