Toronto trudging again through season of denial
We pretend it's not Canada, not winter, and not impossible to get everything we want, writes Edward Keenan.

thestar.com
Jan. 10, 2016
By Edward Keenan

It is a time of winter rituals in Toronto.

Every year around this time (more or less), the seasonal cold finally arrives like a shock. And when the temperatures reached -15C on Jan. 4, after a relatively tropical Christmas season, it was all anyone could talk about, as if this was some gripping twist in the plotline of the series we’ve all been binge-watching: in elevators across the city, for a time, the standard response to “Howaya?” switches to “Cold!”

And every year around this time (more or less), the city’s budget process reveals that things cost money, like a shock. Around City Hall last week, as budget committee meetings dragged on, the realization that the city is $90 million short of what it needs just to fund the same services we had last year and the ones already voted on and approved by city council was a frequent topic of conversation.

But denial is also among our longstanding winter rituals. In this Canadian city, through snow and sleet and gloom, a good many of us continue to pretend we live in Miami even as our noses and fingertips turn red with pain — most of the city’s restaurants are not equipped with coat racks, and outside bars at night you can see smokers shivering on the sidewalk in bare legs.

Meanwhile, in confronting the city budget, we try something similar, envisioning that instead of this world of dollars and cents, we live in a fairytale where chancing across some magic beans will lead us to untold treasure.

Unlike Jack, of the beanstalk story, we have no cow to trade for such beans. But this week we went through another local ritual, searching the inventory of city assets to see if there’s something we can trade for a magical solution to our budgetary problems. A question from a councillor at the budget meeting about selling off Metro Hall met with quick advice from the CFO that it would make no financial sense in the long term, since the city would have to lease back office space anyway.

Then there was a reported investigation into selling off a large minority stake in Toronto Hydro - or maybe the parking authority - in order to finance some of the massive and unfunded list of infrastructure projects.

The mayor says no such investigation of privatization is “in front of him,” and it’s probably better if it stays that way. Because the parking authority and Hydro are both profitable enterprises. The city depends on them for tens of millions of dollars every year in money to fund its other services.

Meanwhile (as we’ve seen from budget discussions of the TTC and the Gardiner Expressway) any infrastructure we build is likely going to be an ongoing source of costs for operations and maintenance. So a few years down the road, after building the new infrastructure with the money you got from selling your businesses, you need to not just recover the loss of profit to fund your other services, but you need to find new revenue to pay the ongoing costs of the new stuff you built. Rather than solving the long-term cash crunch, it things worse.

Other, perhaps more economically viable suggestions were put forward: The Canadian Centre for Policy Alternatives suggested Jan. 6 that reviving the Vehicle Registration Tax and implementing a tax on commercial parking spaces could generate $240 million per year.

The problem with those suggestions for new “revenue tools,” of course, is that people have to pay them, and no one likes paying for things. That’s why the Vehicle Registration Tax was repealed a few years ago, and that’s why the perennial option of raising property taxes is so unpopular that people start talking about “revenue tools” as an alternative.

On the other side of the ledger, councilors hunt for a beanstalk to the golden eggs by examining the departmental budgets for staff training and stationery - the annual goose chase for “efficiencies.” As they quickly find, either the yield from these is small, or the pain involved with doing without them is large. The cuts that would transform the budget will hurt, a lot. The cuts that don’t hurt (diminishing in number), amount to rounding errors in the balance sheet. Those that might qualify as transformational and relatively painless are mostly in the police budget, and there be political dragons among the uniforms that scare off our council’s Knights of the Order of the Clamshell.

Here’s the sobering truth: there are no magic beans. There is no revenue tool that raises lots of money without requiring lots of people to pay it. There are no spending cuts that do not come with a cost to the city’s quality of life, long-term finances or both.

The city manager, Peter Wallace, has repeatedly said (in various phrasings) during this budget process that councilors need to figure out what services they want to provide, and then figure out how to raise the money to pay for them. Things cost money, so we can either do without things, or pay money for the things we want: it’s as plain as the frozen, nose on your frostbitten face.

But we have our rituals. Is this the year we all buy longjohns and warm boots? The year we start paying the tab for the government we want? Or will we continue to shiver and suffer through another year of denial?