The Source Of The Problem

So, I’m catching up on my magazine subscriptions and I come across this interesting article, toomanymagazinesCanada’s Infrastructure Gap: Funds missing to repair our deteriorating public utilities, in the June 2013 issue of the Canadian Centre for Policy Alternative’s Monitor. That’s right. June 2013. I’m a little behind. Stop me if you’ve read all this before.

Not to come across the fatalist here but it’s hard to read this report and see how all the plans and platforms we’re hearing during this campaign from mayoral and city council candidates for making Toronto a better place to live are going to make a lick of difference.

You see, there’s one reason, and one reason only this city, along with every other city in the country, is facing the kind of fiscal crunch they’re facing in terms of increased congestion, affordable housing, crumbling, aging and crumbling infrastructure: the near absence of the federal government. crumblinginfrastructure3Ottawa’s where the money is and they’re not rushing to hand much of it over.

And it’s not just a Harper government thing either. For decades now, Ottawa has backed away from its traditional commitments to contributing to municipal capital projects. Liberal red or Tory blue, both have stepped away from the funding table, offering up little more than what is politically beneficial to them.

Here’s the situation, summed up in one paragraph:

In 1955, the federal government accounted for 34% of capital investment. By 2003, it had declined to 13%, the provincial share remained constant at 39%, and the municipal share increased from 27% to 48%.

Even with the bump up of federal infrastructure spending in the face of the 2008 economic crisis, it remains below the necessary level, as a percentage of the GDP, to even help maintain a state of good repair. crumblinginfrastructureThat shortfall has almost exclusively fallen onto the shoulders of cities to deal with as the provinces haven’t really picked up any of the slack left by federal neglect.

While the majority of our tax dollars are bundled up and sent to Ottawa and (in the case of Ontario) Queen’s Park, the level of government with the least ability to generate the revenue now has the most responsibility to pay for the needed infrastructure. Bit by bit, things get put off, ignored, upgrades and expansion are delayed until the work has to be done or even more drastic measures taken. Sell off public housing stock to help pay for upkeep on the rest anyone?

For many people, they make little distinction between the jurisdictional powers of our 3 levels of government. crumblinginfrastructure1For them, they pay all these taxes and watch as things get worse around them. The roads suck. The city’s a little grubbier, more garbage on the streets. Their basement’s flood when it rains. Where’s all our money going? they demand.

And the ground is made fertile for the likes of Rob Ford and his merry band of anti-government tax-haters.

The city doesn’t have a revenue problem. The city has a spending problem.

Truthfully, there’s every reason to think Rob Ford doesn’t make the distinction between levels of government, and who taxes what and where that money goes. He has proven himself to be grossly uninformed about the job he’s been elected to do for nearly 14 years now. crumblinginfrastructure2Don’t rule out the possibility that when he asks the province and Ottawa for more money to fund things like his Scarborough subway pet project, he still adamantly believes the city doesn’t have a revenue problem.

Those damn councillors’ office budgets! $12 000 for umbrellas?!

Unfortunately, cutting all those nice-to-haves won’t build all the need-to-haves to put this city back together again.

We end up fighting amongst ourselves over dollars made scarce by successive absent federal governments. We can’t afford that. And people die, homeless on the street. That’s the federal government’s job. crowdedbusAnd parents are forced to put their kids in unlicensed day-care centres. We need to find efficiencies. And people are crammed tightly together on buses and streetcars.

The fact is, even with the modest types of revenue tools Toronto was given back in 2006 — the ones many of us still rail against — the city alone cannot plug the holes that need plugging, never mind build and expand the things we need to build and expand. Even the province can’t play the white knight and slay the infrastructure deficit dragon we face although, they could be a whole lot more helpful. The federal government needs to re-assume the level of investment in cities it did 50 years or so ago. crisiswhatcrisisProbably even more so, given the level of neglect it’s allowed to happen.

Easier said than done, obviously.

Municipalities remain at the mercy of the provincial governments. Ottawa is in another stratosphere entirely. Where’s the leverage cities have to start making demands of the federal government?

But a good first step might be to recognize our commonalities rather than emphasize our differences. The problems all cities have right now in coming up with the funding to build better, stronger communities and neighbourhoods, to bring our infrastructure from somewhere back in the mid-20th century, notmyproblemstems from one source and one source only. The negligent disregard with which we are treated by our federal elected representatives.

It’s time we started to use our numbers to make our demands better heard in Ottawa. The fact of the matter is, as goes Toronto (or Montreal or Winnipeg or Calgary or Vancouver), so goes Vancouver (or Calgary or Winnipeg or Montreal or Toronto). As go our cities, so goes the country.

unitedly submitted by Cityslikr

Trash Talk

Let’s talk some trash. Trash collection, that is. And that’ll be the last recycled pun (except for that one) we’ll use on the issue.As we hurdle toward the westward-ho garbage privatization debate set for city council next week, wouldn’t it be nice to have some solid facts and figures on the table in order for those who will ultimately make the decision to do so logically and with well grounded reasons for proceeding. Councillor Josh Matlow attempted to accomplish such a task on Tuesday night hosting a town hall meeting moderated by the ever moderate Steve Paikin of TVO fame. On one side was pro-privatization advocate and Public Works and Infrastructure Committee Chair Denzil Minnan-Wong. Hugh MacKenzie, economist and research associate at the Canadian Centre for Policy Alternatives, represented the anti-side of the equation.

Reading through accounts of the evening, it’s clear that no real consensus emerged. “Last night’s trash talk offered no clear answer on the garbage privatization debate, but one very popular moderator,” Carly Conway of the Torontoist tweeted yesterday. Hey. Maybe if we contract out trash collection to Steve Paikin, everyone might be happy! “It answered some questions for me and, frankly, left me with more questions than I came in here with,” Councillor Matlow told the Torontoist after the town hall.

It seems inconceivable to me that such an important issue that deals with not only a lot of money but peoples’ livelihoods couldn’t be a little more clear cut. Evidence must exist out there from towns and cities that have unloaded trash collection onto the private sector. Case studies, analysis, comparisons of before (privatization) and after, of places that have maintained public service. Metaviews, I guess, is what I’m thinking.

If I were an actual journalist or one of those people who aggregate and research such things, perhaps it might all become obvious which way to go. I’m not but I’m perfectly willing to read the work of someone who has done it. So far, however, such documents are few and far between, lost in a sea of studies all that can be easily shrugged off by opponents as tainted by self-interest or ideology. Unions will weigh in against privatization but they’re just looking after their own jobs, right? Try reading this instead from the National Solid Wastes Management Association, a ‘trade association that represents the private sector solid waste and recycling industry.’ Yeah, so they have no dog in this particular hunt, do they.

The field is awash in solid anecdotal evidence, frankly. For every Etobicoke that loves its privatized trash collection, there’s an Ottawa that has brought at least some of it back in-house after a brief private dalliance. (Interestingly, if I understand correctly, Ottawa re-publicked collection in the older downtown area of the city which is more analogous to the core of Toronto than Etobicoke is.) Like Tuesday’s townhall, neither side is able to deliver the knock-out blow that will sway a crowd to fully embracing its position.

Running with that boxing analogy, shouldn’t the advocates for garbage privatization have to win decisively like any challenger seeking to dislodge the established champion? If we’re going to take a leap of change purely for the possibility of saving money and improved service, the case for it needs to be nearly irrefutable. Yes, we’re going to save this much money. Yes, you’re going to be happier with the service. Guaranteed, to use the mayor’s TV pitchmen promise.

As the privatization pointman, Councillor Minnan-Wong has done nothing of the sort. His constant referencing to Etobicoke as an example for why the rest of the city should privatize is both unconvincing and, possibly, inapplicable. He assured the audience at Tuesday’s town hall that Etobicoke receives no more complaints about trash collection than the unprivatized parts of Toronto. No more complaints, Councillor? Shouldn’t we be aiming for fewer? He was unable to answer some important questions from the audience including gender equity hiring by private firms. When all else failed, the councillor claimed his job was not about social engineering.

Moreover, the savings he (and the rest of the pro-privatization crowd) talks about Etobicoke receiving may not work out in the rest of the city that is laid out in a far less orderly pattern. As we’ve discovered over and over again here in post-amalgamated Toronto, what’s good for Etobicoke may not be good for East York. Money saved in one former city may not be possible in another.

And the ever changing amount of savings should also serve as a yellow flag of caution. All throughout last year’s municipal campaign, pro-privatization candidates trumpeted the $49 million Toronto would save going private with their garbage collection as reported by the C.D. Howe Institute. Under closer scrutiny, that report’s methodology was called into question. Now we’re hearing $8 million/year west of Yonge. Or maybe $6 million. $2 million isn’t being ruled out. What’s next? Well actually, we’re not going to save any money doing this…

And frankly, if the likes of Councillor Doug Ford can blow off $7.8 million or the city pays to police officers for paid duty overseeing construction sites and the like (“Keep in mind [paid-duty costs represent] one-half of 1 per cent of the construction projects that we have to pay for,” the councillor said), where’s the reasoning for undertaking such a massive change of operation in collecting our garbage? What will his response be at next week’s council meeting when a fellow councillor points out that an $8 million saved privatizing garbage collection amounts to about 1% of the near $800 million shortfall the city’s facing? Blustery dismissiveness, I’m guessing.

With no firm or substantive savings to tout and the only improved customer service to point to is the assurance that privatization will mean no more garbage strikes like we saw in the summer of 2009, it’s hard to see this as anything but ideological. According to the Toronto Star’s David Rider, at Tuesday’s town hall meeting “Minnan-Wong said the contract would have ‘continuation of service’ provisions to ensure that, even if the contractors’ workers went on strike, the trash would get picked up in the privatized district.” In other words, in contracting out garbage collection, the city would insist that the winning bid include a provision that would bring in scabs to cross a picket line in the case of a strike, thereby rendering the power of collective bargaining null and void.

Huzzah! Questions linger about what if any savings taxpayers will see. We can’t say for sure if they’ll notice any difference in how their trash is collected. As continued innovation in recycling? Like Councillor Minnan-Wong has said, social engineering isn’t really our job. But we do know one thing. Privatization is going to stick it to the union. Guaranteed.Spite based policy making. In tough times, is there anything more satisfying?

stinkily submitted by Cityslikr

Fun With Numbers

With all the talk of Toronto’s looming economic apocalypse, I decided to submerse myself in a little policy wonking. I hunkered down with both the Toronto Board of Trade’s early February report, The Growing Chasm: An Analysis and Forecast of the City of Toronto’s Finances and a CUPE commissioned paper from economist Hugh Mackenzie entitled, Reality Check: Toronto’s Budget Crunch in Perspective. Two opposing points of view; two tales of two cities.

Now, I am no economic whiz. Numbers, pie charts, graphs and stats tend to make me break out into a cold sweat. Like most of us, I can be baffle-gabbed and hoodwinked when set upon by numerical waves. So in no way should this be taken as a valid economic assessment of these reports. Rather, what blinks before you is a general overview of my impression of them.

Firstly and not surprisingly, the conclusions drawn in both papers reflect the opinions and standpoints held by those who contracted, as it were, the reports. As to be expected, I guess. Still it feels a little, how shall I say, unscientific. But that just may be the nature of the beast when it comes to the field of economics as a whole.

In the Board of Trade’s The Growing Chasm, there is no mistaking whatsoever how we must not tackle the city’s dire financial situation and burgeoning structural operating budget deficit. Of their report’s 34 pages, two (#s 21 & 22) are delivered in dark highlighted boxes. Within those boxes is an impassioned plea against commercial property tax increases. According to this study done by Canada’s largest chamber of commerce, businesses in the 416 area code already bear an unfair tax burden and cannot be expected to carry anymore of the load. If future city councils were to try this than businesses would have no choice but to pick up their stakes and move to more tax friendly locations in the GTA.

To the Board of Trade the actual culprit for City Hall’s runaway spending and growing structural deficit are the wages and benefits that are doled out to municipal employees. Of course in his report done at the behest of the Toronto Civic Employees Union Local 416 of CUPE, Hugh Mackenzie strongly disagrees with that notion. His numbers suggest that employee wages and benefits are perfectly reasonable and that, in fact, Toronto’s recent increase in operating expenditures is 4% lower than the increases in municipal expenditures throughout the rest of Ontario.

Again, I can’t decipher the numbers thrown around in these reports well enough to be able to ascertain who’s massaging what figures or who’s cherry picking what data but I am confident enough to say that the Board of Trade’s report contains a methodological blemish that makes me, at least, suspicious about the veracity of their report. Early on in the Growing Chasm it is suggested that the city’s structural operating budget deficit has been around “since at least the start of the decade”. Sounds a little vague. Surely something this important, this ominous structural operating budget deficit, can be traced back a little more accurately than simply “Since at least the start of the decade”?

No matter. The report then bases all its assertions on the numbers gleaned from the 2002-2008 period. The end number, 2008, is reasonable as it is the last year for which the statistics are available. But why start at 2002? Why not begin right at amalgamation with the birth of the megacity before the structural operating budget deficit reared its ugly head in order to give us a full and complete view of the city’s finances from day one? 2002 seems an arbitrary snapshot as if the Board of Trade needed just that time frame to prove their point. It’s analogous to someone trying to establish the fact that the ancient Romans were poor builders of edifices by pointing out the shoddy condition of the structures from, say, 1945 to the present day.

Or maybe I’m just missing something. Clearly everyone in the mainstream press and the front running candidates for mayor have hopped on (the Toronto) board of Trade. There is a Growing Chasm. City Hall has taken part in an unsustainable spending spree! Cuts must be made! Assets sold! Taxes frozen!! Anything less and we will be going to hell in a hand basket while businesses flee the downtown core to the more amenable environs of 905.

No question. No doubt. And no paying attention to that man over there, Hugh Mackenzie, telling you otherwise.

studiously submitted by Acaphlegmic