Skip to main content
marcus gee

When Mayor Rob Ford rose in city council this week to answer questions about his budget-cutting drive, the first councillor to take him on was Raymond Cho. A 20-year veteran of city politics and councillor for Scarborough-Rouge River, he asked whether the mayor would agree that the city had a revenue problem.

He would do nothing of the sort. In his election campaign last year, and for 10 years as a councillor, Mr. Ford argued as regularly as a metronome that Toronto has "a spending problem, not a revenue problem."

The solution to the city's money troubles, he continues to argue, is to cut spending, not raise taxes or levy tolls. Mr. Cho was not buying it. "I agree we need a strong financial foundation," he said, but the solution cannot only be to "just cut and cut." Toronto needs strong revenues, too.

He waved a newspaper clipping quoting Calgary Mayor Naheed Nenshi. Mr. Nenshi told The Globe and Mail's editorial board this month that cities across the country are running into budget troubles as the cost of delivering services outstrips the rate of property-tax growth. In short: Canadian cities have a revenue problem.

Toronto is no exception. Long before Mr. Ford came along, the city was struggling to pay for the rising cost of the vast array of services it provides, from policing and firefighting to garbage collection and sewage treatment. Part of the solution, obviously, is to control expenses and cut unnecessary services – the painful exercise Mr. Ford has embarked on.

But if you are trying to balance the budget, it only makes sense to look at your income as well as your expenses. Enid Slack, a University of Toronto expert in municipal finance, notes that Toronto's reliance on property tax makes it harder to make ends meet.

New York, she notes, has a banking tax, a hotel tax, a sales tax, a cigarette tax and a corporate tax. Berlin has a motor-vehicle tax, a fire-protection tax, a tax on betting and lotteries, a share of the corporate tax, even – being German – a beer tax. In Chicago, Mayor Rahm Emanuel is talking about broadening the base of the city sales tax (while at the same time lowering the rate).

Mr. Ford is taking Toronto in another direction, robbing the city of the few extra revenue tools it has. A few years ago, the Ontario government gave Toronto exactly the kind of power Mr. Nenshi believes more Canadian cities should wield: the power to levy new taxes on their own. That led Toronto to bring in the car-registration tax and the land-transfer tax.

Mr. Ford killed the car-registration tax within weeks of taking office and promises to kill the land-transfer tax as soon as he can. "It's a tax we do not need," he told Mr. Cho.

The numbers suggest otherwise. The city is going through hoops just trying to balance the budget without the $64-million from the car tax, not to mention the lost income from Mr. Ford's one-year property-tax freeze. Imagine how hard it would be without the land tax, which brought in a whopping $278-million last year?

As city council wrestled over service cuts this week – and balked at all but a few – it became clear how hard it will be to fix the city's budget woes through spending cuts alone. In spite of Mr. Ford, talk began to turn to revenues.

Three city councillors suggested charging tolls on city expressways. One was Deputy Mayor Doug Holyday, a rock-ribbed conservative, who floated the notion of adding toll lanes to the Don Valley Parkway. Unfortunately, if predictably, the idea was voted down.

The city, meanwhile, is launching a comprehensive look at its user fees – charges on everything from borrowing books at the library to sending your kids to swim class at the city pool. Those, of course, bring in – here comes that awful word again – revenue.

Toronto used to have a mayor who seemed to think we had a revenue problem, not a spending problem. Now we have a mayor who says we have a spending problem, but not a revenue problem. The truth is we have both. A sensible solution to Toronto's money worries would look at each side of the ledger.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe