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Bulletin No. 63, February 2006
 Local Government Bulletin No. 63, February 2006

The purpose of this bulletin is to focus debate on the need to increase local self-government in Canada and to help local communities achieve more autonomy. The local self-government website is: http://www.localgovernment.ca .
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In this bulletin:
1. Local government and the federal election
2. Inventive downloading
3. Reflections on the new City of Toronto legislation
4. Subscribe to the Bulletin
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1. Local government and the federal election

The January 23, 2006 election made Conservative Party leader Stephen Harper Prime Minister of Canada, but leading a minority government. There is much speculation about what his policy will be towards cities and other local governments.

The Conservative Party did not elect a single member in any of the three largest cities, Montreal, Toronto and Vancouver. Mr. Harper tried to address this shortcoming by appointing cabinet ministers from two of these cities: David Emerson from Vancouver, and Michael Fortier from Montreal. Unfortunately, Mr. Emerson was elected on January 23 for the Liberal Party member – making lots of remarks during the campaign about how nasty the Conservative were - and his immediate defection to the Conservatives has caused extraordinary political problems for Mr. Harper. Mr. Fortier, from Montreal and a close advisor to Mr. Harper, was not even a candidate in the election. He gains his Cabinet seat by virtue of his appointment to the Senate (which has yet to occur) and that too has created problems given Mr. Harper’s previous statements about the need to have an elected Senate.

Many have made the point that if Mr. Harper hopes to get a majority in the next election, which could happen within two years, he will need to win seats in these three cities. That may auger well for policies that help large cities whatever happens to the political fortunes of Messrs Emerson and Fortier.

In the meantime, Lawrence Cannon has been appointed by Mr. Harper as Minister of Transport, Infrastructure and Communities. The inclusion of the word `communities’ in the ministry’s title raises the hope that it might reflect some of the initiatives by Paul Martin’s Liberal government when John Godfrey was responsible for `cities and communities.’ Mr. Cannon has municipal experience: he has served on the council of the city of Gatineau (across the river from Ottawa) since 2001 and chaired the city’s urban transit authority. Some have suggested that these roles auger well for whatever the government policy for local government may be. Mr. Cannon’s employment for the last decade has been with GPC Public Affairs, an Ottawa lobbying and public affairs firm.

Will Mr. Cannon be able to counter the anti-urban bias of three Cabinet ministers who were active in the government of Premier Mike Harris in Ontario - Finance Minister Jim Flaherty, Health Minister Tony Clement, and John Baird, President of the Treasury Board? All three were senior members of the Harris team that engaged in wholesale downloading onto Ontario municipalities and then restricted municipal powers.

2. Inventive downloading

The Ontario government has found yet another inventive way to download its expensive wishes on municipalities. We had somehow assumed that this kind of transaction was a thing of the political past, but apparently not.

The creativeness is found in Section 10.1 of Bill 206. The Bill generally makes amendments to the Ontario Municipal Employees Retirement System (OMERS), an admired and useful way of collectively administering pension funds for all municipal employees on Ontario. Much of the bill is housekeeping, providing the appointees to the OMERS Board with fuller decision-making powers and a reduction in the provincial role. However, hidden away in the detail is Section 10.1, which provides supplementary benefits to police officers, fire fighters and paramedics, allowing them to retire at an earlier age with full benefits at municipal expense. The Bill can be found at
http://www.ontla.on.ca/documents/Bills/38_Parliament/session2/b206rep.pdf

The Association of Municipalities of Ontario estimates the cost of these earlier retirement provisions to be $380 million per year, and that cost would be borne entirely by municipalities. AMO says this cost is equal to an average
across-the-board property tax increase of three per cent in all Ontario municipalities. The province thinks that figure is at the high end of any reasonable estimate, but many municipal politicians are very wary of provincial intentions. The Canadian Union of Public Employees is also opposing the Bill since anything that eats up a 3 per cent tax increase is bound to cause cuts elsewhere.

If the province thinks police, firefighters and paramedics deserve enhanced pension arrangements, why doesn’t it pay for them itself?

3. Reflections on the new City of Toronto Act.

Public debate about Bill 53, the new City of Toronto Act introduced into the Ontario Legislature in mid-December (See Bulletin no. 62) has been muted, almost non-existent, perhaps because the bill is so large and intimidating. Perhaps that will change when the Legislature reconvenes February 13.

Since this Bill may become the template for general municipal legislation in Ontario, or in other provinces, it’s useful to have some understanding of what it offers, as well as some of its limitations. Hence this reflection.

Two parts of the Bill attempt to create an entirely new legislative context for the city, Section 8 and Section 20.

A) Section 8 describes the general powers the city will have. This section should be contrasted with the “spheres of jurisdiction” approach in the current Ontario Municipal Act of 2001, and in the Alberta Municipal Act. The “spheres of jurisdiction” approach outlined areas within which municipality could act, including highways, waste management, public utilities, drainage and flood control, fences, animals, culture, parks, recreation, heritage and economic development.

Section 8 of Bill 53 is much broader in the powers conveyed, beginning with the statement “The city may provide any service or thing that the city considers necessary or desirable for the public.“ It then states the city may pass bylaws respecting the following:
1. Governance structure of the City and its local boards (restricted definition).
2. Accountability and transparency of the City and its operations and of its local boards (restricted definition) and their operations.
3. Financial management of the City and its local boards (restricted definition)
4. Public assets of the City acquired for the purpose of exercising its authority under this or any other Act.
5. Economic, social and environment well-being of the City.
6. Health, safety and well-being of persons.
7. Services and things that the City is authorized to provide under subsection (1).
8. Protection of persons and property, including consumer protection.
9. Animals.
10. Structures including fences and signs.
11. Business licensing.

This appears to be a wide list of city powers, but it is hemmed in by provincial regulatory authority found in the Bill. Section 25 states that the provincial Cabinet may make regulations “imposing limitations and conditions in the power of the city” under Section 8 and “providing that the city cannot exercise the power in proscribed circumstances.” This section states that such a regulation will only be effective for 18 months and may not be renewed, which seems to imply that the provincial government can act very quickly to prevent the city doing something, but would then have to pass legislation to make its intervention permanent. Some have suggested this gives the city government broad powers that the provincial government will not interfere with if political pressure of the day supports what the city is doing.

And there are other constraints. Section 8(2)1 (set out above) seems to imply the city can create a governance structure of its own making, but Section 151 says that the government can by regulation require the mayor to enact a very particular kind of governance structure where the mayor chooses the chairs and vice chairs of all the important committees and these individuals then become an executive committee with substantial powers, and also requiring the mayor to appoint the Chief Administrative Officer who in turn appoints all the other senior city staff. These are very different governance structures than the city has ever known – in the past, the city has had an Executive Committee, but it was appointed by city council; committee chairs are usually appointed by the individual committees; senior staff are appointed by and responsible to council, not appointed by and responsible to the mayor. But Section 151 is very precise, and it seems to outline marching orders that the city ignores at its peril.

Further, Section 152 allows the Minister of Municipal Affairs to make regulations regarding a long list of things including regulations “improving conditions and limitations on the powers of the city.” That seems to be another imposing control on the city.

Another limitation on the city is Section 11 which states “a city by-law is without effect to the extent of any conflict with a provincial or federal act or regulation”. That section goes on to say that the conflict will occur “if the bylaw frustrates the purpose of the provincial or federal law.” Given the breadth of provincial legislation, this seems to pose a considerable damper on the city’s actions.

An argument can be made that Bill 53 is a step forward, but not the broad powers that a city like Toronto needs. The impact of Bill 206, noted above in this Bulletin is instructive: Toronto and other municipalities have no defense to a provincial government which wants to impose itself. Bill 53 provides no defense to something like Bill 206. There’s no real grant of local autonomy, and surely that was one large point of the exercise.

B) Section 20 provides for delegation of decision-making by city council. It states, “Without limiting sections 7 (giving the city natural person powers) and 8, those sections authorize the city to delegate its powers under this or any other Act to a person or body subject to the restrictions set out in this Part.” Sections 21, 22, 23 and 24 impose restrictions and limitations, but the powers to delegate seem quite broad. In fact some have suggested these powers are too broad, and would allow the city to do things that would be very foolish. Others suggest that real autonomy in this area includes the ability to be foolish, and that city council will usually not choose to go that route.

The new taxing powers in Sections 262 – 67 are very limited, and hedged around with provincial regulations. It appears when exercised to their full, these new taxing powers might generate $50 million annually in revenue – a small amount considering the city now generates $70 million annually from parking tickets, and the city’s annual operating budget exceeds $7 billion.

As many have noted, it hardly matters whether Bill 53 opens more space in which the city might act – the city is impecunious, currently looking for $500 million to balance its budget for 2006, and finding that ferocious staff and program cuts, augmented by a transit fare increase, at best might garner 10 per cent of that amount, but there’s no knowing where the remaining $400+ million might come from apart from charitable senior governments. Toronto is learning that all municipalities, both the powerful and weak, are free to sleep under bridges.

As for the rest of the Bill, it consist mostly of sections imported holus bolus from the Ontario Municipal Act 2001. A concordance of sections of Bill 53 and the Municipal Act is found in the library of our web site, http://www.localgovernment.ca , under the title `Concordance for Bill 53.’

That the city is still bound by the bizarre rules the province has created about the property tax system is most unfortunate (Sections 298 – 360). Most of those rules are not defensible, and as devised the property tax system is unfair. Why should tenants living in high rise buildings be required to pay property taxes almost four times as high per square foot as homeowners? If freed from the bounds of the current system, the city might have devised a property tax system that worked better and generated political support rather than opposition.

Importing so many sections of the current Municipal Act into Bill 53 gives the appearance that the provincial intention is to keep the city on a very short leash. It would have been easier, if the intention was to empower the city, for the province to include a general section stating that the current Municipal Act will continue to apply until the city passes bylaws exempting itself from specific sections of that Act.

However, arguments about the powers contained in this legislation collapse in the face of a current city council which has such small ambition, and appears to have no intention to rethink how it structures programs or delivers services. Arguing at this moment in time for a more powerful Toronto is an empty exercise – city leaders seem too distracted to care one way or another. Yes, it matters in the longer term because Toronto hopefully will rise from its current malaise and then wish it had more powers. Yes, what happens in this instance has a significant impact on what could happen elsewhere in the country. And yes, opportunities to focus on local autonomy happen very rarely – this opportunity may not arise again for another two or three decades. It’s important, but the city won’t be of much assistance.

Thus the presentation of Bill 53 at this time is tinged with sadness and regret. The Bill isn’t good enough, but Toronto City Council is too weak and too distracted to push for something better. What began for some of us as an exercise full of hope that a new city/provincial relationship could be established has turned into a melage of confused whimpers as provincial and city leaders pat themselves on the back, saying to each other, “You done good.“

Bill 53 can be found at http://www.ontla.on.ca/documents/Bills/38_Parliament/session2/b053.pdf


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