Toronto a big spender and saver, according to study

Lfpress.com
May 30, 2019
Brian Lilley

A new study on municipal spending in the Greater Toronto and Hamilton Area will likely have Toronto Mayor John Tory and Premier Doug Ford each claiming it proves them right.

The study from the Fraser Institute shows Toronto spends the most per person of any municipality, by far, but also shows that spending at City Hall has been reduced over the last several years.

The two men have been battling it out over whether there are savings to be found at City Hall.

The Ford government’s budget in April imposed retroactive funding changes on municipalities across the province -- some programs faced actual cuts while other were frozen.

While Ford maintained it would be easy to find pennies on the dollar to save, Tory said it was unfair for the province to demand changes more than a quarter of the way through the fiscal year.

On Monday, Ford backed down and said he would give cities more time to find savings.

Are there savings to be had?

Probably.

Toronto spent $4,010 per person in 2016, that figure was $923 more than Vaughan, the second highest spending municipality and $924 more than Hamilton -- the third highest.

Yet between 2009 and 2016, the study concluded, Toronto reduced per person spending by 7.7%. Brampton, meanwhile, increased spending per person by 15.1% in that time period while Mississaugua was up 9.4%.

Toronto spent far more on transportation, one the city’s biggest costs, than other municipalities. In fact, while the average cost per person for GTHA municipalities was $803 per year, Toronto was sitting at $1,151 per person.

A major part of that extra cost comes from running the TTC which is used by commuters who don’t live in Toronto but do work in the city and use the service as part of their commute.

“Similarly, the Gardiner Expressway and Don Valley Parkway -- key road arteries providing access to and from Toronto’s central business district -- are used by drivers from across the region and beyond,” the report said.

Ben Eisen, senior fellow with the Fraser Institute, said that these commuting costs can add up for Toronto and are in many ways unique to the city. But he noted other unique features should help contain costs.

“Toronto should, theoretically, benefit from economies of scale being such a large municipality,” Eisen said.

The city likely would point to the fact that it has one of the lowest costs for “general government” or administrative costs. Eisen points out that Toronto has one of the highest costs for wages.

“It’s one of only three municipalities that spends more than half of its budget on wages and salaries,” Eisen said.

Toronto spends less than the GTHA average on the environment as well as planning and development and substantially more on transportation and social services.

As for revenue, Toronto gets only 1% of revenue from development fees while a fast growing suburban municipality, like King, gets 24% of its revenue from development charges.

Toronto gets less of its revenue from property taxes than the average and more than the average from transfers from other levels of government.

“What this study does is that it brings together all the information that exists about how much is being spent and in what categories, how much revenue is being collected and then it is up to taxpayers to determine if they are getting good value for money,” Eisen said.

It won’t just be the taxpayers that look to use this information; expect the mayor and premier to look for ammunition in these numbers, as well.