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The Toronto Star

Thursday, February 28, 2008

Page: AA06

Section: Opinion

Recently I met with the mayor and took time to read the blue-ribbon panel report on Toronto’s fiscal health. What struck me most about it is the multitude of contradictions on its 86 pages.

Perhaps the most glaring paradox is that the panel acknowledges cities get short shrift in Canada, that there are few federally cost-shared infrastructure programs, and that the province doesn’t pay the full freight for provincially mandated programs. Only 24 per cent of Toronto’s $7.8 billion operating budget comes from federal and provincial funding.

But the blue-chip panel – who are mostly business, private sector types – infers that the city shouldn’t wait around for the federal government to wise up to the notion that a national government has a responsibility to renew and sustain cities. The federal Conservatives have let it be known that Toronto’s decaying roads and bridges aren’t a priority for them and they aren’t in the business of filling potholes.

The panel concludes from this that Toronto needs to pull itself up and “find and fund” its own solutions to grow revenue. Among the ideas being floated are tracking the full cost of providing municipal services and recovering the costs through new user fees and increased property taxes. According to the panel, property taxes in Toronto are low. It suggests “adjusting its (city) real property taxes to bring them in line with competing jurisdictions.”

Forty-two per cent of Toronto’s operating budget revenue comes from residential and commercial property tax and 15 per cent from user fees (that’s 57 per cent). According to the panel, residents could pony up more. But they make no similar suggestion for the federal government. Funding cities through property taxes is completely backward. World-class cities get the vast majority of their funding from national taxes.

It must be silly season in Toronto if selling off a $92 million-a-year secure revenue generator like Toronto Hydro is given serious consideration. The panel says, “monetize” hydro – a big word for selling. On the radio a panel member mused that the sale of Toronto Hydro – valued at between $2.5 billion and $3 billion – could take the city out of debt. His quick fix solution is short-sighted. You don’t burn the furniture to heat the house. A city-owned electric utility is among the best tools Toronto has to meet future environmental goals and keep electricity costs affordable. Selling the utility, or either of its two related businesses, is not a good idea.

Here are a few more paradoxes.

The city is well run. The quality of 100 separate services is generally high. Staff are committed to doing a good job delivering services. They earn modest wages (just under $40,000 a year). Yet the panel suggests that through a 6 per cent workforce attrition rate a year, the city could save about $250 million. Attrition means when people retire or leave a job, they aren’t replaced.

Let’s see, things are going well with city operations and services are good. But the panel prescribes fewer city workers to deliver services. Toronto currently employs more than 50,000 people (directly and indirectly at other city agencies like police, fire and public transit). Over five years, a 6 per cent attrition rate could mean a 30 per cent cut to staff – that’s 15,000 employees. That’s a lot of people going out the door and not providing services to a growing population.

From where I sit, any expert panel that doesn’t hold the federal government accountable for city building, that recommends cutting the workforce through attrition and still expects a high level of services and promotes the sale of revenue makers like Toronto Hydro isn’t worth the paper it’s written on.

Sid Ryan is the Ontario president of the Canadian Union of Public Employees, which represents city workers in municipalities across Ontario.

© 2008 Torstar Corporation

Idnumber: 200802280135

Edition: Ont

Length: 635 words