High time to show courage
It’s budget season again in Toronto, a time of year marked by changing leaves and the failure of political courage. Will this goaround be any different? According to the city’s long-suffering top bureaucrat, not likely.
City manager Peter Wallace has said time and again that Toronto’s revenues are inadequate to cover even the cost of current services, never mind the city’s roughly $29 billion in unfunded capital commitments. He has insisted that we cannot “cut our way out” of our budget problems, as we have tried to do in recent years, that there is never enough “gravy” to trim. He has urged city council to stop treating so-called revenue tools as “a dirty word.”
Yet, despite the many warnings of Wallace and his predecessors, the city’s operations and ambitions remain all but crippled by the political orthodoxy that talking tax is ballot-box poison. “That is the world I work in,” Wallace said in a downer of a speech at the University of Toronto this week. “That is the council I serve.”
But if city council is going to make the investments necessary to meet the challenges we face, to create a livable, equitable and economically viable city — in other words, to do the job it has promised to do — it has no choice but to find ways to bring in more money.
City bureaucrats have been perfectly clear that current property and land transfer taxes alone cannot pay for desperately needed transit expansion, repairing Toronto’s dilapidated public housing, realigning the Gardiner Expressway, building more green space downtown (see below), and other vital initiatives. Nor will promised funds from federal and provincial governments be enough.
The alternatives to raising more revenues are well known — an inadequate, costly set of “bridging measures,” which Wallace now says will likely be needed again this year. These include draining more money from already depleted reserves meant to maintain services through hard times and trying to find so-called efficiencies in departments already starved by years of austerity. Mayor John Tory’s standing call for a 2.6-per-cent cut from all departments has been widely derided by city managers, who say their existing budgets are too meagre to cover even the rising costs of current services.
The solution is plain to see, but the willingness of Toronto’s legislators to embrace it is far less so. In 2013, the city presented a series of potential taxes to fund transit expansion. Council, with only a few brave outliers, voted them all down. In July of this year, the consulting firm KPMG offered its own list of possible revenue tools, including a tax on alcohol and tobacco, a parking levy, an entertainment tax and development charges, among others. A city report on the proposals is expected later this fall, but Wallace’s latest remarks suggest he’s not so bullish on the prospect of political buy-in.
Much will turn on whether the mayor, who has been so successful at swaying council during his tenure, shows leadership on this issue as he has promised to do. When he met with the Star’s editorial board in July, Tory said he would press council to adopt some mix of the KPMG revenue tools. Yet the only new tax he has publicly backed so far is a per-room hotel levy. This would affect mostly visitors (rather than local voters) and would bring in only between $21 million and $126 million a year, not nearly enough to cover Toronto’s needs.
If Tory is sincere in his commitment to ask Torontonians to pay for a better future, he will need to wade into more politically fraught territory and take a bolder stand. Only he and his council can spare poor Peter Wallace from overseeing yet another charade of a budget.
The city’s operations and ambitions remain all but crippled by the political orthodoxy that talking tax is ballot-box poison