Toronto: Whose Fault is it?
Part II: Mel Lastman?

Mel Lastman

Previous: David Miller

Photograph courtesy Blaine Kendall

Mel Lastman is something of a character. Whatever his faults mentioned in this and previous articles, there is no denying his flamboyant style and his love for his home town. He is a mensch who, frankly, if he and his son were to invest in some tourist building artistic or cultural enterprise, could set themselves up as the city’s next Mirvish family.

And let’s not discount his accomplishments as mayor. Despite his tendency to shoot off his mouth (his “boiled by savages” comment probably didn’t cost us the 2008 Olympics, but it didn’t help our reputation abroad. Also, his “you’ll never be mayor! Never!” rant against David Miller in council chambers probably did much to put Miller in the mayor’s chair), this man was a fighter. Although some see him as a Conservative, he wasn’t afraid to take on premier Mike Harris when he felt that his city was hard done by. Lastman secured funding for the Sheppard subway when Mike Harris wanted to abandon as many capital projects as possible. Lastman was still mayor of Toronto when Harris acknowledged his mistake and restored provincial funding for public transit. He won other concessions from the province as well.

That could not have come from a mayor who did nothing, and that happened with a mayor that had fewer powers than the current mayor did. At the time, Mel Lastman was just one vote on council — a vote who tended only to vote in order to break ties. It is a testament to the force of Mel Lastman’s character that any of his agenda went forward.

But in 1997, soon after the amalgamation was forced upon Metropolitan Toronto and the mayoralty race for the new megacity of Toronto was called, Mel Lastman made a promise that I think did much to put this city in the current mess it is. Just as the campaign began, Mel Lastman promised that, as mayor, he would freeze taxes in the city for his first term in office.

This was, in my opinion, a fundamentally irresponsible thing for him to do. The amalgamation of Toronto hadn’t happened yet. No one had seen the books and knew whether this tax freeze was even possible. Indeed, as mayor of North York, Lastman had just finished working with Toronto mayor Barbara Hall to bring forward local referendums in North York and Toronto opposing amalgamation which explicitly disputed the idea that bigger was better.

The cost savings of amalgamation proved to be illusionary, a fact premier Mike Harris acknowledged when he loaned the amalgamated city $250 million to cover initial amalgamation costs — a loan which eventually became a grant. Mike Harris then went on to limit the city’s ability to raise taxes, capping residential property tax increases to just 3% per year, and capping commercial property tax increases to half that. When Lastman succeeded in freezing taxes for his first couple of years in office, he lost the ability to recover lost ground. Had Lastman raised property taxes at the rate of inflation from his first year in office, Toronto would not have needed to impose its land transfer tax this year in order to balance its books.

Even more irresponsible, though possibly unavoidable given Toronto’s fiscally neutered powers, was how those budgets were balanced during Lastman’s first years in power. Remember, he couldn’t run deficits, and about half of his spending was mandated by the province. Did he cut what remained? He may have tried, but for the most part the city started dipping into its financial reserves.

Now, this was a problem that didn’t start with Lastman, nor did it end with him. When the TTC sold Grey Coach back in the late 1980s, it received a lump sum payment of $30 million which it was supposed to set aside and use the interest from to keep fares down. Cuts in government subsidy forced the TTC to dip into the principle of that reserve until it vanished. Other city reserves, from snow clearing to disaster relief — money that was only supposed to be used at times of emergency, were dipped into, such that by 2006, the city’s budget chief was warning that the city had gone to the well too many times. Lastman’s councils ended up delaying the inevitable, until the inevitable showed up at David Miller’s door.

The problems that came to the fore last summer were predictable, and the decision that set these problems into motion were made years before. For this, Mel Lastman has to share at least some of the blame.

Next: Dalton McGuinty

blog comments powered by Disqus