This week, a joint Ontario-City of Toronto Task Force released its report on the proposed new City of Toronto Act. The Task Force recommends Toronto get new tax and licensing powers for everything from alcoholic beverages and cigarettes to entertainment. According to a Toronto Star story, these measures could suck another $50 million annually from city taxpayers' wallets.

But this report is not just bad news for Toronto. It should sound alarm bells in the rest of the province as well. Across Ontario, overtaxed property taxpayers are already chafing under the weight of their latest assessments. Now they can look forward to their cities and towns asking for the same powers that Toronto is seeking - and be nickel and dimed to death as a result.

There is no doubt that many municipalities face large budget shortfalls every year. The province bailed out Toronto to the tune of $45 million in 2005-06. Part - though certainly not all - of these shortfalls can be attributed to the downloading of social services from the provincial income tax base to the municipal property tax base. To remedy this, the province should revisit who pays for these services and consider uploading certain responsibilities.

This of course is not what Premier Dalton McGuinty wants to hear. Having broken his "no more taxes, no more deficits" election pledge in the 2004 budget, McGuinty saddled Ontarians with more debt while hiking their taxes to a ten-year high. The prospect of the province having to upload the costs of some social services would put a wrench in his plans to balance the books by 2007. Of course, if the premier hadn't increased spending by 9 and 4.5% respectively in his last two budgets he'd be in a better position to do just that.

But McGuinty isn't the only Ontario politician mismanaging taxpayers' money. At Toronto City Hall, for example, the situation is even worse. Just this week the city dropped $50,000 on a glitzy bash at Roy Thompson Hall to honour its welfare caseworkers. This comes on the heels of $8 million recently approved for a new soccer stadium and a pay raise city councilors voted themselves. Meanwhile, those same councilors hiked property taxes 3% for residential taxpayers and 1.5% for businesses in 2005, and promise similar measures in 2006.

These profligate spenders should not be rewarded with the taxation and regulatory powers recommended by the Task Force. The issues Toronto faces - the flight of businesses and jobs to lower-tax municipalities in the GTA, the decline in the use of its downtown commercial space, the challenge of integrating more immigrants - will not be remedied by increasing taxes, regulation, and spending. To the contrary, it is less waste and spending at City Hall, coupled with a less regulated business climate and lower business taxes, that will spur the growth needed to fund city infrastructure.

The proposed tax powers may also violate the province's Taxpayer Protection Act, a point made recently by Conservative Opposition leader John Tory. The Act prohibits the government from delegating certain taxing powers, and from raising taxes without consulting voters through a referendum. Premier McGuinty already broke his election promise to uphold the TPA when he amended it to allow the imposition of the Health Tax. Will he break his pledge again and amend it a second time to give Toronto more taxing powers

For the sake of all taxpayers, not just those in the provincial capital, the premier must tread very carefully. With Ottawa poised to overhaul its municipal act, and hundreds of other cities and towns watching and waiting, the premier has a duty to taxpayers to get this reform right. He should therefore ignore the recommendations of the Task Force. They are simply a bad act to follow.