Photo by Brett Lamb.
For transit riders and enthusiasts, this has been a frustrating day. Just about every Torontonian, regardless of their political stripe, agrees that transit service in Toronto is inadequate. Just about every Toronto politician, and even people outside of the city, regardless of their political stripe, acknowledges that the city needs more buses, more streetcars and more subway trains at every station and every stop.
And yet, at the end of the day, the City of Toronto, like every other municipality in Ontario, cannot run an operating deficit. At the end of the day, the books have to balance, and if the city has to close a half-billion dollar gap next year, then cuts will have to be made. The politicians made their bed, and now some are bleating over the unfairness of having to lie in it.
Many politicians and other individuals find it easy to blame Toronto for its own problems. The city doesn’t have a control on spending, they say; they need to get their fiscal house in order before they come calling to the rest of the province. This is an easy thing to say, but structurally, it is a much harder thing to implement. About half of the City of Toronto’s expenditures are set by the provincial government by fiat, just like all other municipalities in Ontario. Social services are mandated by the province and have to be administered by the cities and paid for out of the property taxes. There is no room for cuts there.
Of the remaining half, you have the cost of operating one of the least subsidized (per capita) transit agencies in North America, whose service is about a quarter less than what it was 20 years ago, even though it’s carrying about as many passengers. You have the cost of operating the police and the fire services (McGuinty, to his credit, uploaded Ambulance services). You have potholes to fix, streetcar tracks to rebuild, buses to replace, not to mention new infrastructure to build.
So while there is waste that can be found and get all righteously angry about, there is nowhere near $500 million amount of waste to cover the projected deficit next year, or try to get ahead on the service cuts and actually make improvements to public transportation.
And then there is the $120 million per year that Toronto property taxpayers pay into Ontario’s education system — money that doesn’t flow back into Toronto’s schools. And not to mention the $1 billion in reserve funds removed to keep the city solvent over the past four years.
The taxes the City of Toronto considered implementing may not have been the best ones to close the fiscal gap, but the situation was known to be dire before Monday, and the political grandstanding engaged by the 23 Toronto councillors to try and use the provincial election to bail them out was irresponsible. It is true, though, that despite the new powers accorded to the city by the City of Toronto Act, the city’s responsibilities remain out of line with their sources of revenues. The result is a perpetual handicap that hobbles this key engine of the provincial economy.
If anybody has half a billion dollars in the folds of their couch, feel free to bring it forward. Otherwise, this “the city has to get its fiscal house in order” rhetoric is seriously misguided. The city can’t get its spending under control because the city has no control over half of its expenditures. The city has done just about all it can to get its fiscal house in order. There is only one level of government which has the power to get Toronto’s fiscal house in order.
It’s led by Dalton McGuinty.
Further Reading
July 20, 2007 2:23 AM
What are your thoughts on increasing user fees for transit users? I’m out west so I don’t know what the situation is in Toronto with respect to transit fee changes in recent years, but I’m sure that part of the problem is that gas prices are high these days. Car drivers have to pay for more expensive gas, so it seems reasonable that transit fees should rise in times of higher gas prices as well. More generally, if transit needs upgrading, the users of it and primary beneficiaries of it, arguably have a responsibility to shoulder the largest segment of its cost.
July 20, 2007 2:37 AM
I hate the idea of higher fares, but it would be a better option than service cuts. The 1990s proved that.
It should be noted that the TTC has been asked to put together a contingency plan for a $100 million operating subsidy cut next year, or almost 20% of the anticipated $575 million shortfall. On the other hand, the police has been asked to cut $10 million of their $768 million budget. So you see what’s happening here: the TTC is being cut this deep because it’s one of the few “discretionary” expenditures that can be cut this deep. Politically, city council couldn’t touch the police budget and, constitutionally, they can’t touch the social services budget either. The best solution lies in uploading at least some of these expenses province wide.
McGuinty could win the election tomorrow if he would roll back enough of the downloading provincewide to bridge Toronto’s gap and prevent them from coming back to the province year after year for another hand-out. The problem here is structural.
July 20, 2007 11:30 AM
James
when you watch the City budget debates, every year Rob Ford gets up on his hind legs and demands cuts in a laundry list of things which will save 10 or 20 or 50 million dollars. The lion’s share is usually “cut 10% headcount, all departments” which is just plain stupid and right out of American corporate-speak.
The problem is that every so often he comes up with something plausible, which might save 50,000 or 100,000 but the left of council, on principle, refuses to accept any of it on the grounds that “it won’t save enough”. It’s time to stop saying “it won’t save enough”.
City employees should receive incentive schemes like in some private sector companies to find waste and deal with it, like leaking pipes or inefficient lights or duplicated stock. They should be rewarded with a bonus, say 10% of the actual cost saving to the city, once the City Budget Office confirms that it is an efficiency rather than a cut in service. The flip side of this though is that any savings should not go to tax reduction or other clawback but should be ringfenced for new program spending.
July 20, 2007 11:42 AM
I agree with you.
July 20, 2007 1:55 PM
Mustafa,
I think that increasing user fees for transit isn’t a particularly good idea. They’re already above what other cities charge (Chicago seems to be $1.75, and $5 for a day pass; New York was $7 for a day pass; more data at http://www.tlcminnesota.org/Resources/Policy_Briefs/transitfares.pdf ), and already receive far less in subsidies from the various levels of government than other cities.
I agree that part of the problem might be the gas prices, but subways don’t run on gas, neither do (some of?) the streetcars.
And in regards to your more general point, everyone in Toronto benefits from a better transit infrastructure. More people using it instead of driving means fewer traffic jams, fewer accidents, faster deliveries, less pollution/cleaner air (resulting in lower health care costs), less wear and tear on the roads (resulting in lower road maintainance costs), etc, etc… (By which I mean I’ve run out of points. ;)
Perhaps tolls on personal vehicles entering the city would generate some cash, and reduce some of the things I’ve listed above…
(Disclaimer: I live in Toronto, and don’t own a car, (which is a large part of the reason I can afford to live in Toronto,) and while I took the subway to work this morning, I usually bike instead.)
Later, Blake.
July 21, 2007 6:56 PM
What are your thoughts on increasing user fees for transit users? I’m out west so I don’t know what the situation is in Toronto with respect to transit fee changes in recent years, but I’m sure that part of the problem is that gas prices are high these days.
Gas price increases (which don’t really apply to the subway or streetcars) have been incorporated to many successive far increases over the years. Not so long ago, an adult fare was $2, then $2.25, $2.35, $2.50, and now $2.75. What the TTC might consider are zoned fares, as in York Region now or the Skytrain. I don’t know how changing fare structure could increase revenues, but it might provide a certain rationalization.