What happens to Toronto when things get tough?
The city is enjoying two decades of prosperity. But that won’t continue forever and council needs to get busy preparing.

thestar.com
By Edward Keenan
Feb. 7, 2017

Toronto is a fantastically prosperous city: growing faster than almost any other place on the planet, enjoying a period of sustained economic boom, able to brag of being home to “12 key business sectors” (it is the most tax-competitive city in the world according to KPMG) that keep the city “resilient” and its population relatively wealthy.

And for all that, Toronto is a city that expects to shutter 7,500 units of social housing in the near future because it will not spend the money to keep it from falling apart. The wait list to get into social housing is seven years long. Our homeless shelter system is operating at 94 per cent capacity - meaning in practice no beds are available for some people on some nights - and the shelter division is cutting 10 staff to save money. We’ll moan about heritage buildings being torn down because of the backlog of protection applications, but we won’t be adding the staff the planning department says they need to deal with the backlog.

If those two sets of facts don’t strike you as news, you won’t be alone. It is a familiar story, by now, but it was the story retold through this year’s budget process, which moved through the mayor’s executive committee Tuesday on its way to council. The budget, as predicted, was another year of holding the line: no deep program cuts (and controversial proposed cuts to childcare and shelter services rolled back, the programs “saved”), some modest incremental service increases here and there, no dramatic property tax hikes, but some modest tax adjustments here and there. More reliance on potentially risky land transfer taxes, more reliance, yet again, on drawing from reserve funds.

“As your CFO I’m getting a little nervous,” city finance honcho Rob Rossini said at one point, of the ongoing tradition of patching with duct tape and raiding piggy banks. “How many more rabbits can we pull out?” Well, they pulled one more out this year. So who knows?

Put it on the coat of arms: Toronto, Muddling Through Our Strength.

To be clear, there’s no doomsday stuff here. As city manager Peter Wallace took pains to emphasize, the politicians engaged again in their favourite sport of demanding staff put a bunch of cuts on the table and then systematically rejecting pretty much every one of them. There’s a majority on council who like to talk a lot about how sure they are the city can eliminate lots of wasteful spending, and who get the staff we pay to run the city to go to great lengths to examine what spending can be cut. But when push comes to shove, when even small cuts are on the table - no more gathering leaves off people’s lawns in Etobicoke, for example - they react by refusing to pull the trigger. Wallace calls this a “revealed preference” of the budget committee to maintain service levels, even though their stated preference is often to get tough and trim budgets.

But if there’s no nightmare of slashing, there’s also no bold new moves to generate sustainable revenue. If you expected bold, you came to the wrong place. The mayor may have exhausted his reservoir of bold with his road toll proposal. The premier smothered that flame in a hurry. Plan B appears to be complaining about the premier’s decision.

And if the mayor and his committee aren’t bringing anything bold now, and haven’t in the past years of this term, they very likely aren’t bringing anything bold at all. Next year, when we discuss the budget, the city will be ramping up for an election campaign. That is not a time when anything controversial is going to be put forward. The year after that we can expect the traditional quickie staff-caretaker post-election budget. So what you see is very likely what you get for the next few years.

It’s not a surprise. I don’t think voters were expecting budget boldness from this mayor, or this council. But it does raise questions. Like, if our politicians are not going to ease the CFO’s discomfort with seat-of-the-pants budgeting now, when will they ever? Or, if they will not take advantage of growth and prosperity to stabilize the housing supply or the childcare spots or the shelter beds, when will they ever deal with those things? And if it’s an agonizing grind debating one or two planning staff positions and relative pennies for student nutrition programs now - when the real estate market is bringing in windfall jackpots and the economy has been mostly strong or stronger for over two decades - then what will happen when a recession hits? What does the budget look like if the real estate market collapses?

If we muddle through during times of fantastic prosperity, what will we do if things get tough? That’s not a question most of our politicians seem prepared to contemplate.