Toronto's Budget is veering off course. Here's how to save it.
Back in the summer of 2008, I was invited to Brisbane, Australia. The Local Government Association of Queensland (LGAQ) had recently instigated an amalgamation of Queensland's local governments, and ordered every municipality to submit long-term community and financial plans. Suffice to say, the municipalities were not happy about it — so the LGAQ flew me Down Under to tell Toronto’s post-amalgamation financial story.
The cost of a megacity
When an operation as large as Metro Toronto is amalgamated and downsized, the task at hand is so overwhelming that all individual plans fall away while the City scrambles to figure it out. A lot of capital infrastructure work was deferred for three years, no new projects such as renovating facilities or building new ones happened and state of good repair backlog wasn’t even inventoried, let alone addressed.
The dust settled from the 1998 amalgamation at about the time I was first elected to Council in 2003. It was clear the brand-new City needed to restore its financial discipline with a five-year capital plan and a long-term (10 to 20-year) financial plan. The councillors and staff before us had laid some groundwork and dealt with major crises. Now, it was time to build a strong plan with permanence.
Terms like "long-term financial planning" sound comforting, but the work to create that plan is controversial. It requires meticulous inventorying of everything that needs attention and where expansion will be needed in services, facilities and vehicles. Then, if the plan has any chance of succeeding, you must be dead honest about what it will cost. Toronto Council did just that when it adopted its first long-term plan with real costs attached, and most were elected to another term to implement it. That’s how I found myself in balmy Brisbane.
Toronto: a case study
The LGAQ were looking around the globe for case studies to learn from, and found Toronto was a prime example. Controversy was abound because Toronto politicians were being honest about the real cost of operating a megacity. We ordered new transit vehicles, grew and built necessary facilities and services such as libraries, childcare spaces and community centres — all of which you continue to use to this day. Most of it was possible because a very thorough and disciplined plan attracts the partnership and funding of other governments.
Planning and discipline has helped us for a while — there are gaps, of course, but we have come a long way. But after a week of presentations from City staff on the 2019 Budget and some deep discussion, I am very concerned we are jeopardizing our long-term goals for Toronto.
The fine print
There are no headline-grabbing cuts such as closing a community pool, slashing a breakfast program or laying off garbage collectors. The issue is that the City's main strategy for filling the gap left by depleting Municipal Land Transfer Tax revenues is to defer capital infrastructure work across as many divisions you can name.
For example, the revised 10-year capital plan for Transportation Services — which I am being asked to vote for — will leave us with $3 billion in urgently-needed road repairs.
After two years of committing added funding to the Toronto Community Housing Corporation to repair and re-open closed housing units, this year’s revised long-term plan rolls back on that commitment, with no funding planned after 2020. TCHC staff estimate they will have to begin closing units again by 2021.
In the fine print of the Parks and Recreation capital budget, we discovered the amount set aside for their trails, pathways and bridges will be reduced this year, then flatlined for the next 10 years. As a result, 100 per cent of trails, pathways and bridges in Toronto’s parks will be in various states of disrepair, ranging from compromised to catastrophic.
Food for thought
I know this sounds bad — but don’t despair. The final vote on the Budget will be on March 7th, and we can make the decision to stay on course without doubling your property tax bill.
Currently, Toronto’s debt per capital ratio is low, relative to large cities like ours. This means that if the City’s entire debt were suddenly called in and residents had to pay every loan, the cost per household would be less than $2000. That’s half that of New York City and a third of Chicago's. This means Toronto has a little more room to fix what’s needed and build what a growing city needs.
The alternative is a gradual increase in taxation. Mayor Tory has promised to keep this at the rate of inflation, but consider this: if inflation is 2.5 per cent and you added an extra 1 per cent to that for the next three years, you could avoid another TTC fare increase, keep debt stable and keep our long-term community and financial goals on track. It would cost the average property tax payer an additional $30 a year for three years.
Please give this some thought, and consider coming to my Budget Town Hall this Tuesday to discuss with myself and your fellow residents of Don Valley North. Details are in the poster below — I'll see you there.