It's no secret that City of Toronto politicians love to tax and spend - and that they are thirsting for additional taxing power. They may get their wish. Last week, a joint City of Toronto-Ontario government task force released a "Staff Progress Report" on the City of Toronto Act. The Act and 350 related statutes require Canada's biggest city to obtain provincial permission for even the most banal decisions, from the placing of speed bumps to the regulation of bar hours. While removing unnecessary red tape is a good idea, the subtext of the report is not. Quite simply, it paves the way for more and higher taxes and is a bad model for cities across Canada.

Toronto Mayor David Miller is demanding a "growth-based" percentage of provincial tax revenues. But Ontario Premier Dalton McGuinty has other ideas. Facing deficit budgets until 2008, he can't afford to part with more money or increase taxes after having already broken his promise not to raise taxes in his first budget. Instead, he is considering giving Mayor Miller new taxing authority.

This is bad news for Toronto taxpayers. Over the last five years, residential property taxes have increased 20%. Business taxes are two or three times those of neighbouring municipalities such as Mississauga. Yet in 2005 Toronto went cap-in-hand to Mr. McGuinty for a $45-million bailout on a $7-billion budget it could not balance.

The city blames its woes on provincial downloading. But when one looks at Toronto's budgets, it becomes clear that city politicians have lost sight of their core responsibilities and are venturing into areas that offer little value to taxpayers.

In 2005, Toronto Council approved spending of $150,000 to promote
shopping on one street, $1.5-million dollars for a "rebranding" exercise and a whopping $214-million-plus on economic development, culture and tourism, monies that could be better used to improve Toronto's prospects if left in business coffers and consumers' pockets. In 2004, the city spent $66,000 providing cigarettes and alcohol to the homeless and $800,000 on hotel rooms for homeless people that were never used. And the list goes on.

Toronto also continues to pay city workers out-of-whack wages, such as $19.32 an hour for litter-picking. To top it off, councillors recently asked for a $30,000 pay raise.

New taxation powers for Toronto will mean one thing: higher taxes that will add momentum to the forces that are already driving businesses and jobs out of Toronto. Indeed, according to the Toronto Board of Trade, companies leaving the megacity for surrounding municipalities have taken 37,000 jobs with them since 2000.

This is not merely a "Toronto issue." Other municipalities will be watching to see what Toronto gets - and you can bet they'll want similar treatment from their provinces as well. For Canada's "cities agenda," the prospect of greater municipal taxing powers is fraught with dangers. Mr. McGuinty has a responsibility to get this right, and that means resisting the temptation to allow Toronto to tax and spend as its politicians please.