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It’s beyond time to change the way we fund Canada’s cities

Jack Diamond is a principal of Toronto-based Diamond + Schmitt Architects.

Toronto has the potential to be the most successful urban region in North America.

Despite the high cost of housing in Toronto, the area attracts upward of 80,000 immigrants a year; it benefits from the political stability and civility of Canada; has a well-educated population with excellent educational institutions; its economy, which is severely constrained by transit under-investment, is nonetheless buoyant; and it accommodates and benefits from population diversity.

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The strength of the economy is based on a variety of clusters: financial services; electronics; chemicals; the arts; food production; construction; health services; information technology; automobile manufacture and assembly; as well as professional services such as engineering and architecture, among other professional fields.

At present it is being prevented from realizing its full potential by inappropriate governance structures, severely inadequate funding and strategically ineffective allocation of resources.

This area is now a "city region" – not a metropolitan city, or even a Greater Toronto Area – comprised of 27 unco-ordinated municipalities, including four regional governments. The governance structure consists of city and town councils, each one of which acts as if it were regulating a small village, not a highly complex, interrelated urban organism of very large scale.

Further, the hierarchical nature of our Constitution, by which provincial and federal governments by and large control the public purse strings, excludes cities, which are major recipients of investment money. The tax base of which the city has control (real estate, some licensing and a small share of the gas tax) is inherently inadequate to maintain, let alone plan and implement, vitally necessary infrastructure. Those running for office who claim that "efficiencies" found in poorly managed city departments would cover capital and operating costs are either grossly uninformed or willfully ignorant.

The strategic dysfunction of resource allocation is not confined to the public sector alone. Planning and investment in the private sector is not synchronized with investment in the public sector: High density residential and commercial construction is approved without the required hard and soft infrastructure to support it. Nor are federal-level infrastructure funds allocated on a strategic basis.

The Conference Board of Canada has described the manner in which the nine hub cities in Canada (a hub city is defined as a city that contributes at least 40 per cent to its regional economy) are the drivers of our economy. They also contribute a greater economic multiplier than non-hub cities, a leverage now largely neglected. Funds appear to be allocated on an ad-hoc basis, not on evidence, and are allocated to projects unrelated to their usefulness. An egregious example is Toronto's one-stop Scarborough subway proposal, which would replace a well-planned LRT of congruent capacity with five station stops that was fully funded and would be built years ahead of a subway for billions of dollars less.

The manner in which infrastructure funds are allocated should also contribute to raising the standards of transportation, urban settlement patterns, energy conservation and environmental sustainability. This could be achieved by the federal government setting performance standards, and allowing cities to compete for the funds by demonstrating the means to meet or exceed the set standards. Such criteria would also help to prevent conflicts of interest on the part of the private-sector funding and implementing infrastructure projects.

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A federal, provincial and city co-ordinating body, staffed with the highest professional competence, could overcome the impediments to achieving the most effective, livable and prosperous city region in North America. Indeed, in the 1980s, Ontario did institute an Office of the Greater Toronto Area, the mandate of which was to integrate ministries relevant to the growth and development of the GTA. This idea could first be tested with the focus on transit and public housing – in Toronto's case, the most vexatious of current problems.

This, of course, requires more than an acknowledgment that the scale of Toronto is that of a regional city, and all that that implies. Finding the appropriate means of co-operation between all levels of government, and leveraging the advantages of the region to everyone's benefit, would be a singular act of enlightened self-interest, one from which all sectors would benefit. This applies to all nine hub cities across Canada – Vancouver, Calgary/Edmonton, Regina/Saskatoon, Winnipeg, Toronto, Montreal and Halifax. Each has characteristic challenges. The co-ordinating body could address each, deploying infrastructure funds to greatest effect, rather than the arbitrary allocation of a sensitive resource, tax revenue. There is ample evidence that Canadians want tax value, not tax cuts, so it does not require too much courage to act in the public, rather than in the political, interest.

Video: Growing outward: The story of how we got here (The Globe and Mail)
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