Time to act like a big city
The most consequential thing about this year’s Toronto city budget may be what came right after councillors approved it.
After years of insisting that property tax increases be held to the rate of inflation, Mayor John Tory opened the door a crack to a bolder approach. Asked whether he would continue his policy of low-taxes-at-any-cost if he wins re-election in October, Tory effectively ducked the question.
This may not amount to much of anything. It may just be the mayor’s natural caution in not committing to anything until he must. Or it may be a narrow political calculation that, with Doug Ford having ruled out another mayoral bid, Tory won’t be facing a powerful challenge from the right this year and can afford to start quietly distancing himself from the low-tax pledge.
Or, then again, it may just be something more positive — a realization that years and years of squeezing the city’s ambitions into the straitjacket of rock-bottom taxes has reached its limits.
That would be a welcome and long-overdue admission. As we have written many times before, making a fetish out of insisting that Toronto’s property taxes remain the lowest in the entire region is a permanent drag on efforts to give this burgeoning metropolis the services and infrastructure it badly needs.
This isn’t wild leftist tax-and-spend talk. The mayor himself made essentially the same point not too long ago when he was out campaigning for more spending powers for Toronto. “Are we going to get serious about investing in the future we want?” he asked at a city-building conference in the fall of 2016. “To put it in plain language, are we prepared to pay for the things we know we need to build?”
Unfortunately, the mayor’s answer to that question (and the answer of just about every member of city council) has more often than not been: not really. He and most councillors, on both the right and left, have not been willing to challenge the political consensus that Toronto homeowners deserve to enjoy the lowest property taxes in the region.
This is done in the name of keeping the city “affordable,” a laudable goal in itself. But it begs the question: affordable for whom?
It does work for Torontonians who are homeowners — all of us who have benefited from the dramatic rise in property prices over the past decade. This year’s budget, for example, increases property taxes by just 2.1 per cent this year (the rate of inflation), or 2.9 per cent once a special levy for transit and housing is included. That amounts to an extra $82 — or less than $7 per month — on the average Toronto home with an assessed value of $624,000. Talk about a bargain.
But about half the people in the city are tenants. Many struggle to pay record-high rents and depend heavily on city-funded services such as child care, social housing and transit. If those services are cut or squeezed, the city becomes ever less affordable for them.
That’s what has been happening in recent years as the city produces austerity budget after austerity budget. Far from seeing runaway “gravy train” spending, it has actually cut real spending per capita over the past seven years, as city manager Peter Wallace has pointed out. This year’s budget increases spending by just 1 per cent to almost $11 billion; given inflation and population growth, that’s bound to put the squeeze on many services.
At the same time, this year’s budget does include improvements in some areas, which add up to $52 million in new spending.
There’s the new “hop on-hop off” two-hour transfer on the TTC, a welcome benefit for many transit users. There’s funding for a climate change plan known as TransformTO; 20,000 new spaces in recreation programs; more money to repair social housing; and 281 additional shelter beds, a modest step toward heading off a repeat of this winter’s scramble to prevent homeless people from literally freezing to death.
All that still falls short of what city council itself has committed to doing. By one estimate, councillors have pledged action on housing, transit and poverty reduction that add up to $36 million. But there’s no money in the budget to pay for their promises — and no political will to raise it.
Even getting this far means the city has had to dig ever deeper into its reserve funds. It’s also relying on the housing market remaining strong and bringing $800 million into the treasury through the Municipal Land Transfer Tax. That’s a riskier bet every year; a serious market slowdown would be painful in many ways — not least for the substantial hole it would blow in the city’s budget.
Another positive post-budget sign is the mayor’s new-found determination to beat the drum for a greater provincial commitment to funding transit — specifically the badly needed subway relief line.
The TTC’s Black Tuesday on Jan. 30 — when just about everything that could go wrong in the subway system did go wrong — was the kick in the pants we all needed to start speaking up loudly about the need to get going on the relief line.
There’s money set aside for the line’s initial planning stage, but by all accounts that is proceeding at a sedate pace — and it’s past time to make it a real priority, with money attached. The dangerous overcrowding at the Bloor-Yonge and St. George transfer stations made that all too clear.
With a provincial election less than four months away, now’s the time to hold the politicians’ feet to the fire and demand a commitment to getting this line built. It’s been shamefully delayed and the mayor is right to push harder for it.
All this is part of the fight to close the gap between the city’s means and its aspirations. Other governments are going to have to step up. And homeowners are going to have to pay more, even if that’s a message they don’t want to hear.
Making a fetish out of insisting that Toronto’s property taxes remain the lowest in the entire region is a permanent drag on this burgeoning metropolis