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Toronto's skyline. (Fred Lum/The Globe and Mail)
Toronto's skyline. (Fred Lum/The Globe and Mail)

JACK DIAMOND

Cities need tax value, not tax cuts Add to ...

Jack Diamond is a principal of Toronto-based Diamond + Schmitt Architects.

Few politicians have the courage to raise taxes. Yet the provision of social services and investment in a well-functioning infrastructure are marks of a civil society. Even more important, these factors increase the capacity of the city to improve its economic growth and competitiveness.

Building that capacity (or “capacity building” as social scientists and economists now call it) justifies borrowing, as the private sector well knows. This seems not to be well understood by the public sector, or at least the electorate. This is particularly sad as there have seldom been times when the cost of borrowing has been so low. The lack of political and media leadership, therefore, to make this broadly understood, is deeply disappointing.

What also should also be understood is that the city often pleads with the province to finance its projects, expecting the province to use its debt capacity to fund the city, while the city uses less than half of its allowable debt limit. This is partly due to the political aversion to debt and partly due to the city manager’s fear that politicians will use the debt to finance the wrong things, such as operating costs that do not have revenue streams attached. What is needed is investment, for example, in infrastructure, education and public health – all capacity building contributors. Debt timidity is bad management, as the opportunity costs are high.

In a global economy, Canadian cities are in competition with their international counterparts. A comparison of investment in infrastructure puts into perspective the woeful inadequacy from which Canadian cities suffer:

For example, among 21 cities ranked by the Conference Board of Canada for the Toronto Board of Trade in 2011, public transit expenditure per capita puts Calgary 11th, Montreal 14th, Toronto 15th and Vancouver 16th; London spends $1,112.6 per capita per annum, Berlin $831.1, Stockholm $665.3 and Toronto $337.8.

Among other benchmarking factors, such as distances travelled by passenger rail, Toronto gets a D grade; or length of track per 100 square kilometres, the city has a C grade. Toronto, as a global city, has now dropped from fourth to eighth place in overall ranking.

There are other factors that require attention, such as the growing geographic income divide or the related inadequacy of strategically located social housing. While some of these factors are not the responsibility of the municipality, a good mayor would convene appropriate levels of government into a co-ordinated approach to the issues that ultimately affect the prosperity and well-being of the city. What is needed is a comprehensive and ranked program of the means to address these interrelated factors. What we have is the opposite – disconnected decisions based on political calculations rather than on the evidence of what is in the best interest of the city as a whole.

Notwithstanding these poor grades and regressive tendencies, Toronto’s reputation as a diverse, livable city remains intact. According to the Conference Board, it has one of the wealthiest metropolitan market areas in North America, and attracts the largest proportion of foreign-born residents of 24 metro regions measured.

However, these retained strengths are not being well utilized, and, if no improvement to social services and infrastructure investment is made, the city will fall further behind in its quality of life, and hence its economic competitiveness.

A significant and continuing symptom of this malaise is an inappropriate municipal governance structure. The city’s economic contour pays no attention to its political boundaries. This political balkanization hampers social and economic progress. Global cities’ success depends on regional integration – we have a city region, but not the governance structure to manage, organize, invest or put effective policies into practice to greatest advantage: The suburb sees inner city expenditures as depriving them of benefits, and vice versa. The reality is that both benefit from services and infrastructure improvements in any of the districts that make up the city region. And this city’s region extends from Hamilton to Oshawa.

Clearly we need to understand that we are all in this together, that the whole can – indeed must – be greater than the sum of the parts. Sorely lacking is the leadership to convey this most empowering vision of our future. Build it and the benefits will come. Canadians want proactive governments and tax value, not tax cuts.

 

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