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Steve Lafleur: Unfortunately, Toronto’s historic tax hike is a harsh necessity

Commentary

It’s Toronto budget season. I’d like to sit here and tell you that there is a robust, practical, fact-filled debate about the city’s finances taking place at City Hall. But I’m not that good at lying.

The centre of the debate is a “historic” 10.5 percent property tax increase. The narrative writes itself: out-of-touch left-wing mayor jacks up taxes in the middle of an affordability crisis. It’s exactly what many conservatives expected when she was elected. 

In a vacuum, there’s nothing factually incorrect about any of that. Mayor Chow is a lifelong NDP member and isn’t shy about taxes. And, indeed, Torontonians are getting squeezed right now. Both owners and renters have seen shelter costs jump over the past few years as our deep housing shortage collided with a spike in interest rates to combat inflation. This really and truly sucks. It’s understandable that people are mad.

Here’s the problem: this isn’t happening in a vacuum. Toronto is facing a $1.8 billion budget shortfall. We need to close that gap through higher revenue, lower spending, or some combination of the two. Unlike the federal and provincial governments, cities can’t just run deficits. They can’t kick the can down the road. 

Moreover, there’s some context. For starters, 10.5 percent sounds huge. It’s around $32 a month for the average homeowner. Certainly not welcome news, but it’s only historically large on a percentage basis because the last two mayors kept property taxes low, allowing basic services and amenities to fall into disrepair. If Toronto had a mascot (other than a raccoon) it would be an overflowing garbage can or a closed public toilet. Is $32 a month too high? Maybe. Is it an obscene money grab? That’s a more difficult case to make. 

But, let’s just say for a minute the tax increase isn’t acceptable. We choose lower spending instead of higher taxes, theoretically. Trouble is, we’ve only got so much control over spending. We can’t just trim salaries, for instance. They’re set by collective agreements that we can’t tear up. Fine. Then we’ll tackle waste. Only, the last two mayors tried that. If there was obvious fat to trim, someone would have proposed it. This leaves us with no easy options.

Of course, there are probably opportunities to deliver services at a lower cost. The trouble is, we actually need to pass a budget. And as far as I can tell the only proposal to cut spending on the table (other than a tiny reduction in the police budget) is cancelling the renaming of Yonge-Dundas Square. In other words, there’s no alternative plan other than complaining about the tax increase.

Municipal governments, as creatures of the provinces, have very limited fiscal tools. For instance, the City of Toronto wasn’t even allowed to toll the Gardiner Expressway. Their own source revenue (e.g. excluding transfers) is primarily composed of property and land transfer taxes and various user fees. Unlike, say, income taxes that come right off your paycheque, these are highly visible forms of taxes that don’t automatically grow with the economy. We actually cut property taxes when property values increase, which we certainly don’t do with income taxes. It’s like the opposite of bracket creep!

Moreover, as mentioned, cities can’t just run deficits. Provincial and federal politicians can hold the line on taxes, knowing that they can simply paper it over with debt. It’s easy to make simplistic proclamations about simply trimming waste, then failing to actually balance the budget, since there are no immediate consequences. Municipal politicians can’t do that. If there’s a hole, they need to fill it.

While I’d argue there’s a lot of room to cut federal and provincial budgets, it’s much harder with municipal governments. Don’t believe me? Let’s take the idea of hacking out $1.8 billion seriously. 

Let’s focus on city agencies. This covers some of the biggest municipal expenses. The TTC’s 2023 budget was just over $2.2 billion. So we’d need to cut 80 percent of the budget to fill a $1.8 billion hole. Or, we could eliminate the police department. That saves about $1.3 billion. Throw in the library system, Exhibition Place, the zoo, and—what the heck—Yonge-Dundas Square. That should do it. Easy, right? 

A screenshot of a computer

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Table from the City of Toronto’s 2023 budget summary.

The unfortunate thing about these debates is that there are almost certainly ways to do things better. We can have more for less if we’re smart about it. But we have to be realistic about the magnitude of challenges and bring detailed solutions to the table. If you show up with a proposal to just trim some symbolic waste, you’re not presenting an alternative to the property tax increase. 

Of course, while the provincial and federal governments have been spared these tough decisions for a long time, it might not last forever. The bond market runs the world, whether we like it or not. There’s only so much debt investors are willing to finance. Maybe we’ll grow our economy fast enough to avoid hard choices. Maybe we won’t. 

Fiscal conservatives are often weary of proposing scary-sounding changes to the way services are funded and delivered. After all, people might be more willing to go along with abstract rather than concrete spending cuts. But if we’re going to actually make government more efficient, we have to have these conversations. Bluntly, the only way politicians will make hard choices (unless forced by the bond market, like they were in the 1990s) is if they get a mandate from the public. If they’re not willing to sell it, they’re not going to implement it. Our task is to give them things they can use, not just platitudes. 

Sorry, guys. There’s no one weird trick to balancing the budget. We need to sweat the details. Let’s get at it.

Howard Anglin: What’s in and what’s out in 2024

Commentary

Do you want to know what to expect in 2024? Look somewhere else. This is a half-serious, half-facetious list (and I don’t even know which is which) drawing on observations and conversations on both sides of the Atlantic. It is a list for people who have ever wondered “What is the next turmeric?” Or thought, “I’ve heard good things about the skiing in Amirsoy, but will anyone I know be there?” It is my list, and even I wouldn’t trust it. 

OUTIN
minimalismclutter
OntarioQuébec
ennuimalaise
George BrownD’Arcy McGee
cigarspipes
vapescigarettes
Justin TrudeauSophie Grégoire Trudeau
frustrationanger
BudapestBucharest
Che Guevara t-shirtsMoshe Dayan t-shirts
coffee breakslunch breaks
FloridaMaine
occupationgunboat diplomacy
Scotland’s lochsScotland’s beaches
Jacqueline Kennedy Onassis style iconCarolyne Bessette-Kennedy style icon
Pre-Raphaelite BrotherhoodWhistler—Sargent bromance
beardssideburns
GrotiusSuárez
Scottish ginSpanish gin
historical-pastoral tragical-historical
anti-woke Rightanti-woke Left
dry whitesoff-dry whites
Al WaxmanBruno Gerussi
EVshybrids
IslayCampbelltown
NCAA basketballEuroleague
Western Roman EmpireEastern Roman Empire
Charlotte BrontëEmily Brontë
Spanish FalangismLebanese Phalangism
Sense and Sensibilia Names and Necessity
veteransrookies
dessertsdigestifs
the bully pulpitendynamistic power
human dignityrights for robots
opaquesheer
memoirsbiographies
Alexander WaughAuberon Waugh
Pineau des CharentesCarcavelos 
Christopher HitchensPeter Hitchens
via positivavia negativa
blockingignoring
smoothiessoups
Bertie WoosterRupert Psmith
handbagsfashion totes
declinefall
John HumphreyCharles de Koninck
Georgian townhousesEdwardian flats
quiet quittingwork to rule
Roald Dahl’s children’s storiesRoald Dahl’s adult stories
DMsvoice notes
parkspiazzas
girl mathbro science
bowdlerisationexpurgation
the mediathe silent majority
thinking about the Roman Empirethinking about the Holy Roman Empire
Anthony TrollopeAnthony Powell
ApuliaLiguria
Fidel CastroSimón Bolívar
Impressionist cityscapesRomantic landscapes
mackerelbranzino
GentileschiBronzino
Tonka beantamarind
Bernese Mountain DogsNewfoundlanders
Beverley McLachlin’s airport fictionRobert Borden’s translations of Goethe
Slovenian beachesAlbanian beaches
illiberal democratic backslidingliberal democratic backsliding
CNNCSPAN
bridgesferries
weekend golfweekday golf
illegal border-crossingvisa overstays
car audio systemscar video systems
book clubschoirs
Netflix and chilldinner and a movie
Jimmy Carter Gerald Ford
lacrosserugby
bike laneswalking paths
“pursuing our own good in our own way”“a manly, moral, regulated liberty”
mindfulnessprimal screams
ModiglianiBrancusi
George OrwellCyril Connolly
business cardscalling cards
contraceptionpregnancy
smoked cocktailsfood-infused cocktailsBut I’m still not ordering either.
Michael Ondaatje’s fictionMichael Ondaatje’s poetry
matchaprobably something even worse
civilisationits discontents
legislative powerexecutive power
fenceshedges
The Greek islandsThe Greek mainland
citrusfloral
PRC election interferencePRC cultural disruption
incomeinheritance
lake housesriver houses
houndstoothtartan
Georgian orange wineBulgarian pét-nat
mushroom drinksmushroom everything
genocide“genocide”
loft conversionsbarn conversions
clean linestassels and fringes
food deliveryfrozen meals
The BalkansThe Baltics
Old FashionedSazerac
hotelsstaying with friends
sobrietycelibacy
flower gardenskitchen gardens
ColombiaPeru
ginger groupsAdullamite factions
FlorenceRavenna
kalecabbage
cottagescabins
superstitionwitchcraft
knitting thatching 
Nutellapistachio cream
flavoured honey flavoured mustard
Scottish foldsBritish shorthairs
Marina AbramovicYoko Ono
grassdirt
exhibitionspermanent collections
hoodiesovershirts
New York steakhousesParis steakhouses
proseccochampagne
tweedcorduroy
Reagan DemocratsAttlee Conservatives
cacio e pepela gricia 
fusionregional
going for it on fourth downfake punts
organic farmingregenerative farming
Millennial imposter syndromeGen Alpha brash ignorance
Eastern Canadian winesWestern Canadian wines
West Coast American winesEast Coast American wines
ironyhypersentimentalism
impeachment25th Amendment
short storiesmultivolume novels
urban bee hivesurban pollinator gardens
black trufflewhite truffle
ZermattCervinia
fleeceshearling
soccerrugby
minimum wageautomation
literary fictionliterary non-fiction
plasticglass
hopsmalts
political platformspolitical principles
Taylor SwiftAmy Winehouse
latteshot chocolate
Scandinavian modernCalifornia modern
amarovermouth
Hart TrophyTed Lindsay Award
cutting post-secondary fundingcutting post-secondary enrolment
Left bankRight bank
proper Canadian spellingwrong American spelling
blaming Boomersresenting Gen-X
punctuationdashes
Formula 1bullfighting
‘80s nostalgia‘90s nostalgia
backyard chickensbackyard ducks
celebratory champagneeveryday champagne
moneytime
Jordan PetersonGeorge Grant
heritage tomatoesheritage apples
rentinglodging
tillingmulching
“defund the police”phthano-paranomic power
Cartesian scientismViconian humanism
single source chocolatesingle source honey
NBA basketballOlympic basketball
faux furreal fur
AthensJerusalem
Perry MasonSam Spade
coordinatedmismatched
prophetsmystics
weaknessstrength
buttonssnaps

And, of course, always out: George Bernard Shaw.

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