Ontario JOBS Coalition Website

There has been a chorus of praise recently about various forms of the "new deal for cities" or the "urban agenda." Many have suggested the City of Toronto and other municipalities be given broad powers to regulate, license, tax and raise revenues as they see fit, unconstrained by the province. In Toronto's case, the provincial government has set a timetable to make all of this happen by the end of 2005.

This is too much, too fast. There are serious dangers for Toronto and all of Ontario from a sudden, wholesale change in the province's relationship with its largest municipality.

Giving Toronto broad powers to regulate as it pleases will lead to a rapid sprawl of regulations, creating more city departments and more bureaucracy.

City council already appears quite willing to devise new regulations: Consider Toronto's "private tree bylaw," enacted last year, to control the removal of trees on private property. That bylaw alone required $431,000 for additional staff to enforce it, at a time when Toronto already employs more than 46,000 people - 2,000 more than it did before amalgamation.

Taxpayers can expect more rules like this if Toronto gets more powers. Business taxpayers can expect even worse.

New licensing activity will proliferate, primarily to increase revenue. Not only will this badly hurt the city's competitiveness, costing jobs and reducing demand for labour, but it is unclear what it will solve. If Toronto today has trouble balancing its books, how will giving it powers to regulate in more areas help the situation?

Licensing should not be used as a substitute for ensuring a proper balance between municipal revenues and expenditures. Toronto has not made the case for being a more active regulator and licencer, or how this will benefit its citizens and businesses.

Instead of engaging in a blind power grab, Toronto should specifically define where it is experiencing problems because of a lack of regulatory power. Then the discussion can begin about solutions to these problems. What we have now is a solution in search of a problem and councillors hungry for more authority and more tax revenue. Increasing taxes, particularly on business, will make Toronto less competitive.

Just last week the Canadian Urban Institute released a study showing that high business taxes are a drain on the city's economy, siphoning business to 905 communities, which boast tax rates up to two-thirds lower than Toronto's.

Mayor David Miller's response? It is impossible to lower taxes. Never mind that he just got a huge infusion of gas tax money for the TTC. Apparently there is no room to reduce the load on Toronto taxpayers.

Toronto residents should also be concerned because, as businesses have left Toronto, so have jobs. According to the Toronto Board of Trade, the city has lost 37,000 jobs to surrounding municipalities since 2000.

So what should the provincial and municipal governments do?

They should make public a specific list of concerns they feel need addressing and work with stakeholders on case-by-case solutions.

Queen's Park should upload social services that are better funded on a province-wide taxation basis, and ensure that the overtaxed property tax class receives reductions accordingly.

Investors and businesses should be offered protection by preventing tax increases on overtaxed sectors and by requiring a move toward a 1:1 ratio between residential and business property taxes.

Instead of rushing to fix "Toronto's problem" before the next municipal and provincial elections, politicians should take the time to establish a sensible blueprint for municipal reform.

The City of Toronto Act isn't just a Toronto issue. A new deal will open a Pandora's box of potential power-sharing with other municipalities as well. Soon the City of Ottawa will unveil its own urban renewal agenda, seeking additional regulatory and taxation powers and other municipalities will not be far behind.

Our politicians have a duty to get this right, and that means resisting the temptation to allow Toronto politicians to tax, regulate and spend any way they please.

The CTF is a member of the Ontario JOBS Coalition-- Seeking Better Reforms to the City of Toronto Act.