Rebuild Report Requires New Deal for Cities

by Markus O’Brien Fehr, Chief of Staff

Toronto has an enormous amount of work ahead of it to recover from the COVID-19 pandemic. Getting to where we want to be may require a total re-think about government services, who provides them, and how we pay for them.

This week Council debated a 238 page recovery report, available online in three parts (part 1 / part 2 / part 3).  It includes 83 recommendations from the City’s Office of Rebuild and Recovery that addresses topics including public health, improving City services, addressing climate change, improving equity, protecting vulnerable communities, and supporting business along with the arts & culture sector.

If that seems like a very long list – it is!  The document is filled with ideas addressing specific ways in which we can improve Toronto for everyone living here, many of them already underway.  While it is helpful to corral these objectives into a single list as we seek to “build back better,” the sheer size of the report raises several concerns.

To paraphrase a common slogan, if you have 83 priorities, then you don’t have any.  It would take decades to enact all of these recommendations.  At some point very soon, the City is going to face a much more difficult process of prioritizing these objectives in a hopefully open, and publicly transparent manner.

Most of the concerns raised here existed long before COVID-19 emerged.  While the pandemic has put many systemic inequities and issues under the microscope, they are not new.  The impediment to solving them is usually lack of funding, going back to a time pre-amalgamation when many additional responsibilities were downloaded to the City. The report seeks to go well past a pandemic rebuild to address many of these long term structural issues.

Unfortunately, the report doesn’t speak to how this funding will be sourced, other than recommending the initiation of a Federal-Provincial-Municipal Intergovernmental Table to develop a coordinated strategy.  While cooperation will be critical, all orders of government are facing similar fiscal issues.  Expecting future windfalls to completely solve our woes is wishful thinking.

To put things in context, the TTC’s unfunded state-of-good-repair needs over the next 15 years alone currently totals $23.7 billion.  If the TTC stopped operating altogether for the next decade (at $2.1 billion operational cost per year) it still wouldn’t be enough to make up that gap.

The City’s property tax also isn’t designed to adequately deal with many of these issues.  We know a 1% increase on property tax nets about $30 million.  No reasonable person would advocate for a 50% hike in the property tax bill to make up the $1.5 billion anticipated operating gap.

Even with cutbacks to non-essential services, finding efficiencies and revenue increases within the City’s power, the only way to really get Toronto back on track is by coming to a new deal with higher levels of government giving the City more autonomy over how it collects revenue, and where it collects revenue from.  Some paths forward could be revisions to the province’s City of Toronto Act, enacting a 1% municipal sales tax in the GTHA, or by establishing a City Charter, as John has called for this week with Councillor Matlow.

In the coming weeks, we’ll take a closer look at some of the creative ways cities are seeking to address budget gaps as well as what strategies Toronto is bringing to the table as we move forward.