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LOCAL SELF GOVERNMENT - BULLETIN No. 8, JUNE 2000

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 web site is http://www.localselfgovt.org

In this issue:
1. Impetus for Toronto charter idea
2. Strengthening local government in British Columbia
3. Accounting the cost of downloading in Ontario.
4. The privatization debate
5. Subscribe to the bulletin.
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1. Impetus for the Toronto charter idea

Discussion of a new status for the Toronto urban area has intensified with the release of a report by the Chief Administrative Officer of the City of Toronto, dated June 6. The report is having its first committee debate on June 22, and will probably be considered by Toronto City Council in early July.

The report proposes that Toronto be recognized as an independent, responsible and accountable order of government with power to act in local matters. Among other things this recognition would permit the City to incorporate business enterprises to facilitate public-private partnerships; grant incentives; and raise money by borrowing against specific assets.

The report says the city should be able to gain long-term financial stability with the power to issue bonds; secure dedicated shares of provincial revenues such as gasoline taxes, retail sales tax, and vehicle registration fees – it happens in various forms in British Columbia, Alberta and Quebec - and engage in provincial and municipal cost-sharing.

The report also proposes that Toronto deal directly with the federal government, including entering into funding arrangements with provincial and federal governments (as already occurs in Vancouver and Winnipeg) and that the city participate in discussions about issues that directly affect Toronto, including such matters as health, economic and labour issues, criminal justice and cultural policy. Obviously these are power that all big cities (not just Toronto) should have. One of the background reports compares the powers and revenues of selected Canadian and international cities.

These kinds of proposals give significant impetus to the Greater Toronto Charter initiative (see Bulletin No. 5.) What remains contentious is the that staff, for reasons one can easily understand, have suggested that the new status only be for the existing city of Toronto, not for the whole Greater Toronto Area. Staff also suggest that the new status would be best achieved by the Mayor and a small committee of politicians talking to their counterparts at the province and federal government.

Trying to create a charter status just for the current City of Toronto seems somewhat limiting. Already the mayors of Markham and Oakville have signed onto the idea, and extending the debate to the whole of the GTA seems useful.

Further, the important debate is not between politicians at the city, provincial and federal levels (as the report assumes); it is among residents and citizens generally so that some kind of publicly-based impetus can emerge. This is not terrain staff can easily enter onto, which might be why it was not suggested. Perhaps the city might join with others to create a wide-ranging public debate in time for municipal elections in Ontario this November.

In all likelihood discussion of this important staff report will include these issues in the weeks ahead. A copy of the report, and an accompanying background report `Comparison of Powers and Revenue Sources of Selected Cities’ can be found in the library tab of our web site http://www.localselfgovt.org

2. Strengthening local government in British Columbia

In mid-May, Bill 14 was introduced in the British Columbia Legislature, completing a reform process for local government in the province. Municipalities gain the status of being called local governments and Bill 14 includes provisions to clarify various issues relating to regional governments, land use planning and various other matters.

From an Ontario stand-point, what is remarkable about the British Columbian approach is that the provincial government seems ready and willing to treat local governments as independent entity entirely capable of exercising autonomous powers. Further information on this matter may be obtained from the Union of British Columbia Municipalities website: http://www.civicnet.gov.bc.ca/ or from the provincial government’s website http://www.marh.gov.bc.ca/LGPOLICY/MAR/bill14hi.html.

3. Accounting the cost of downloading in Ontario

While Premier Mike Harris has argued that downloading and fiscal transfers between the provincial government and municipalities have been revenue neutral, and that the Association of Municipalities of Ontario (AMO) generally consented to changes, many other voices are saying that these assertions are wrong.

For instance Michael Power, the President of the AMO wrote the Premier on May 17: “in your recent letter to Mayor Mel Lastman a number of assertions regarding AMO’s rule in the province’s Who Does What exercises were made. For the record, I must say that these assertions are unfounded. AMO did not negotiate any agreement, and it is time this story stops. At no time, was the Board asked by the province to sign off on any of its proposals.”

In regard to the cost of downloading, City of Toronto staff argue that the downloading process has left the City worse off by $252 million a year (or more than $750 million since the province implemented downloading). The Premier has disputed these figures and the City has responded by suggesting that it hire an independent third-party auditor, acceptable to the province, to verify the financial impacts on the city of the province’s financial transfers.

This proposal is expected to be approved by Toronto City Council in early July. It will be interesting to see what the province does to stand in the way of or frustrate this embarrassing request.

4. The privatization debate

Those interested in privatizing municipal services – or those opposed to privatization - will be interested in Elliott D. Sclar’s book, “You Don’t Always Get What You Pay For – The Economics of Privatization.”

Sclar finds it’s often difficult to be precise about the public service that one is thinking of privatizing, given the (often unacknowledged) complexity of many government services. He provides numerous examples where the service provided by the private contractor is both more expensive and less effective. He notes that in many cases there are no private sector firms which provide the comprehensive service required in the pubic sector. And he gives examples where public services can be successfully contracted out when the government is precise about what it does and what it wants. Sclar believes that the step to take before thinking about contracting out is one concerned with improving the existing service within the public sector.

Sclar spends several pages on the privatization of bussing service in Canada. The idea of privatization came up in a 1992 study by Professor Harry Kitchen who claimed that if the transit service in Ontario had been delivered by private sector operators then $850 million would have been saved between 1982 and 1990 – or about $100 million a year. Sclar dismisses the report as a bad piece of analysis based on averages that do not hold up. For example, while private operation may have saved money in smaller centers, the data for cities with populations of more than 100,000 shows that publicly controlled services are considerably less expensive than private service.

Sclar’s book is published by Cornell University Press for The Century Foundation. Its Canadian price is $36.75.

5. Subscribe to this bulletin

The bulletin is sent to about 900 individuals involved directly and
indirectly in local government in Canada. We invite you to subscribe by
going to the 'Bulletin' tab of the web site http://www.localselfgovt.org and
following the instructions. More information about the sponsors of the
bulletin, members of the advisory committee, and our discussion space, can
be found on our web site. We appreciate your comments, your feedback, and
items of interest that you wish to share with us and others who visit the
web site.