Brampton layoffs signal a move Canadian cities should follow

TheGlobeAndMail.com
Sept. 7, 2016
Marcus Gee

Brampton’s decision to lay off 25 managers is a bracing example for Canada’s cities.

City halls across the country are struggling with the staggering cost of delivering services to their residents and fixing aged roads, bridges and sewer systems. They have been pleading with the provincial and federal governments for more money and agonizing about whether to impose higher taxes on their residents. Brampton is actually doing something.

Faced with an auditor’s report that warned about the city’s deteriorating finances, it brought in a new chief administrator, Harry Schlange, to act as a “change agent.” After holding consultations, he announced a dramatic step on Tuesday: the city would lay off 25 people, including many senior officials. The city argues that the big shakeup will reduce duplication, quicken decision-making and save $2-million a year.

Mayor Linda Jeffrey said that with 300,000 new residents expected to arrive in coming years, taking the city’s population to 900,000, Brampton is aiming to be more business-like, more competitive and more innovative. “I know change is very difficult,” she told CBC Radio, but “I think we’ve turned a corner.”

We’ll see about that. Lopping off a tier of senior managers will not alone turn Brampton’s sprawling bureaucracy into a marvel of efficiency. Severance will mean $3.5-million to $4-million in up-front costs. All the same, the headline-grabbing decision sends a message that should echo across the country: cities must change how they run themselves, or strangle on their own growth.

Canadian cities have a common problem. They must provide water works, parks, policing, ambulances and a host of other expensive services to growing numbers of demanding residents. Stuck with unionized work forces and hidebound organizations such as the police, they struggle to raise their efficiency. Most cities rely on a highly visible form of taxation, the property tax, that is hard to increase without facing a political revolt. Decades of deferred maintenance means their infrastructure will break down without billions in repairs. Mass immigration to edge cities such as Brampton, just northwest of Toronto, means an ever-increasing call for new sidewalks, bus routes and community centres.

Brampton has seen its population more than double over the past couple of decades. It now boasts of being Canada’s ninth largest city. Newcomers, many of them from South Asia, have flooded into sprawling new subdivisions. More than a third of residents speak a language other than English or French at home.

All that growth is a good thing. Brampton is thriving. Drive up its spine, the 410 highway and the evidence of its success is all around: new cinemas, new temples, new warehouses and factories.

But managing that success is tough. In a cautionary report last year, auditor Jim McCarter found that while the city’s property-tax revenue had more than doubled over the previous decade because of soaring growth, just about all of that new money had gone to meet the city’s ballooning payroll. More planners, more accountants, more parks workers – it all costs money. “With two-thirds of every operating-expense dollar being spent on the city’s payroll and almost 75 per cent of city staff being unionized, it will be a challenge to slow the historical rate of growth in operating expenses that has occurred over the last decade,” Mr. McCarter wrote.

Even with property-tax increases averaging a healthy 3.9 per cent a year in the five years leading up to his report, with the proceeds of a recent infrastructure levy thrown in, city hall is fighting to make ends meet. The balances in its reserve funds were declining despite all that new property-tax money, Mr. McCarter warned. Unless Brampton learned to live within its means, it would be burdening future generations with heavy obligations.

It’s much the same in Toronto itself, where city manager Peter Wallace has read the riot act to city councillors over and over, telling them that the city has billions in pressing needs and no firm plan to cover the cost.

What is refreshing about Brampton is that, under Ms. Jeffery and Mr. Schlange, it seems to have leadership that sees the challenge clearly and is willing to face it without blinking.