For a long time now, the City of Toronto has been like the grown son who lives in his parents' basement, holding a job of his own but letting mom and dad do his laundry and make his meals. Yesterday, finally, they told him to stand on his own two feet. For the first time in years, the government of Ontario refused to subsidize Toronto's living costs by handing it a cheque to cover its annual budget shortfall. Premier Dalton McGuinty's government said, in effect, "Sorry, son, you're on your own."
The good news is that Toronto may at last learn to act like an adult. As tough as it will be to survive without parental support from the province, here is an excellent chance to make some grown-up decisions about how a big-city government sustains itself.
Can we afford a police force that costs nearly $1-billion a year at a time of falling crime rates? Are we getting our money's worth from a transit system that employs 12,000 mostly unionized workers and will see its budget rise 9.1 per cent this year? Do we want to live with a debt of $2.5-billion hanging over our heads, or would it be smart to sell some assets, like Toronto Hydro or Enwave, to pay it down?
Mayor David Miller has neatly sidestepped those big questions. His final budget before he steps down later this year is a stand-pat document. It manages to keep the city out of the red by drawing on reserves, using up the previous year's surplus, raising property taxes 4 per cent (again), hiking some user fees, eliminating some jobs and cutting back on some services.
But spending will rise by hundreds of millions of dollars all the same, reaching $9.2-billion. In fact, Toronto's expenditures have been rising at a rate of about 5.9 per cent a year since Mr. Miller became mayor six years ago, according to the Board of Trade. Despite the introduction of new levies such as the vehicle registration tax, city revenues have not kept pace.
Result: misery. Each year, the city scrambles like the Dutch boy to put a finger in the dike. This year, notes former city budget chief David Soknacki, three-quarters of the money the city is using to close its budget gap will come from what the budget candidly categorizes as "unsustainable strategies" - one-off measures, like gobbling up last year's surplus, that do nothing to fix the long-term problem.
As Mr. Soknacki puts it, "no amount of paper clips and plant watering" is going to fix the problem. City officials are projecting another gap of $469-million in 2011.
How does Mr. Miller plan to close it? Why, by asking mom and dad for help, of course. Yesterday, he said that if the provincial government would only agree to pay half the operating costs of the TTC as it did before mean old Mike Harris was premier, all the city's budget woes would be solved. Toronto, he said, was working to conclude a Toronto-Ontario Partnership Agreement by Dec. 1. Will a government with a $25-billion deficit really shovel hundreds of millions in extra dollars Toronto's way? If Queen's Park refused to plug this year's hole, is it likely to agree to a permanent, annual increase in its subsidy to Toronto? Even if it did - and there is certainly a strong case for giving the TTC more support from higher levels of government - the commitment is likely to be phased in over several years.
No, the city will have to manage its money troubles mainly on its own. That means making choices on everything from contracting out to workers' wages to asset sales. Successive city administrations have avoided those choices because those choices are tough and politically dangerous.
The time is ripe to face them. We are in the midst of a campaign to choose the next mayor - the perfect moment for what budget chief Shelley Carroll calls an "adult conversation" about how the city pays for the services it delivers. Last summer's 39-day strike convinced many Torontonians that something needs to change in the way their city is run. They are ready for bold ideas. The city, for its part, stands armed with new taxing and political powers that make it easier to fend for itself.
The province has done us all a big favour by telling Toronto to move out of the basement.
Marcus Gee