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Description:
A Plan Addressing Toronto’s Powers and Finances

This Plan has been prepared by Paul Bedford, Frank Cunningham, David Crombie, Anne Golden, Ken Greenberg, and John Sewell, to help focus discussion around the new City of Toronto Act and related issues.

We believe the following proposals form a sound basis for an agreement between the City of Toronto and the Province of Ontario regarding a new City of Toronto Act and related matters:

1. Financial issues

There are a number of financial issues which are intertwined and deserve to be addressed contemporaneously. The objectives are to ensure that revenues and expenditures are distributed in ways which ensure accountability, and that the city has reasonable, reliable, and sufficient sources of revenues and financial supports in respect to its obligations. These issues should be secured in an agreement between the province and the city lasting for five years, and the agreement should specify the dates by which each provision will be implemented.

The structural mismatch between the city and the other governments should be addressed by reversing the downloading imposed by the Harris government, and removing from city responsibility the great bulk of the costs of two large social programs, welfare and social housing. These costs are better shared, as they have traditionally been shared, by the provincial and federal governments which have sources of income able to bear these expenditures. The uploading of these costs will be equivalent to about $1 billion a year to the city.
Until recently, property tax has been the city’s independent source of taxation revenue. But in recent years there has been much poaching on this revenue source by the provincial government. The city’s status as the sole beneficiary of the property tax should be restored. The provincial education property tax on commercial properties in the city should be removed.
Given the large number of immigrants living in Toronto, a fair deal - comparable to what is available in other provinces - must be struck with the federal government for immigration support and a labour market agreement.
There are many problems with the current system of property tax, including the fact that it is structured inequitably between different classes of property. (For example, the rate of taxation paid by rental residential properties is far higher than for owned residential properties.) The city should be given the authority to structure and levy property taxes, subject to provisions which ensure that system is structured and administered with equity.
The city should be given the ability to levy e xcise taxes including hotel/motel occupancy, meals, fuel, liquor, tobacco, vehicle registration, land transfer, and tax increment financing (TIF) to support local infrastructure development.
If the above measures are not implemented to improve the city’s current fiscal situation, consideration should be given to permitting the city to access growth taxes, such as a sales tax.
2. Powers

The city should be granted legislative powers which are broad and expansive, free of the need for provincial approval of city decisions. These powers should permit the city to take actions which ‘meet or beat’ provincial and federal laws and regulations – that is, the city should be able to do things which strengthen (but do not weaken) standards set out in senior government legislation or regulation. This was expressed by the Supreme Court of Canada as the ‘dual compliance’ test: a municipal bylaw would be disallowed only if it compelled what senior government law forbids.

3. Governance

There is a growing consensus that the current city structures do not enable to city efficiently and effectively address either the bigger city-wide issues or the smaller neighbourhood issues. In the past, when faced with these problems, the device used to create a broad consensus of how best to move forward has been the independent review. Examples, are Lorne Cumming’s review in the early 1950s which led to the creation of Metro; Carl Goldenberg’s report in the 1960s; John Robart’s report in the 1970s; and Anne Golden’s report in the 1990s.

This device should again be brought into play. An independent review of governance for the city should be undertaken on the joint initiative of the province and the city to ensure responsive and accountable governance better able to address both city wide and neighbourhood concerns and issues. This review should also deal with the role and function of the Ontario Municipal Board as an approval agency of city land use decisions.

4. Regional decision-making

Once the above three matters have been addressed and actions put in process, it is imperative to address a fourth important issue: the institutional capacity must be created to address regional land use, transportation, infrastructure, and the protection of natural systems in the Toronto area. This institutional capacity is needed to create and maintain a strategic growth management plan for the Greater Toronto Area congruent with provincial policies and to provide a context for municipal decision-making. A process should be undertaken by the province in consultation with the city and other local governments to forge a consensus on the shape and structure of this institution (or institutions.)

Proposed by:

Paul Bedford is a former chief planner of the City of Toronto.
Frank Cunningham is professor of philosophy and political science at the University of Toronto's Centre for Urban and Community Studies.
David Crombie is a former Mayor of Toronto.
Anne Golden is President of the Conference Board of Canada, and former president of United Way of Greater Toronto.
Ken Greenberg is an architect and urban designer with an international consultancy.
John Sewell is a former Mayor of Toronto.

July 25, 2005.