Olivia Chow jumped into Toronto’s suddenly crowded mayoralty race sounding a bit like a Tea Party candidate. “You can’t spend what you haven’t earned,” the former New Democratic MP declared at her campaign launch, adding: “We’ve all paid more and got less and less.”
Ms. Chow’s strategists, eager to position her as a big-tent candidate, clearly feel a need to get out in front of the inevitable charges that the lifelong social activist is a tax-and-spend lefty. But how long before the real Ms. Chow re-emerges?
Still, we should be thankful that she has so far chosen to forgo the easy “tax the rich” slogan that leftist mayoralty candidates across North America have recently employed with great success, just as we should ignore Mayor Rob Ford’s lazy “saving taxpayers money” bromides.
Running North America’s fourth-largest city involves more than redistributing wealth or keeping taxes down. Indeed, the job is becoming a lot tougher, as Toronto grapples with the downsides of its successes in technology and finance. Toronto’s next mayor (please, God, let there be a “next” one) must know how to address growing social inequities without scaring off the rich.
One of the byproducts of being a magnet for the best and brightest is rising income inequality. Rising salaries in the financial and tech sectors exacerbates the gap between high- and low-income Torontonians, creating a bifurcated city whose residents evolve in parallel universes.
Wealthier neighbourhoods have better public schools, leafier parks, fancier supermarkets, healthier residents and safer streets. Poorer neighbourhoods are concrete “food deserts” with weaker schools, patchier public transit connections, more health problems and gun crime.
Toronto isn’t the only Canadian city experiencing this polarization. Vancouver and Calgary have also seen income inequality surge. Montreal has proportionally more low-income residents than any other big city, but it has also seen less of a spike in top incomes.
But it’s Toronto, as by far the biggest Canadian city and the heart of the country’s financial sector, that most embodies a trend that is transforming North America’s most vibrant cities. Like San Francisco and New York, Toronto is a victim of its success.
A 2010 paper by the University of Toronto’s Cities Centre found that income inequality had been growing much faster in Toronto than in Canada overall. Toronto’s so-called Gini coefficient (a scale in which 0 means everyone earns the same amount and 1.0 means one person holds all the wealth) rose from 0.28 in 1980 to 0.46 in 2006, compared to 0.32 nationally.
The U.S-based Brookings Institution recently tracked a similar phenomenon in American cities using a “95/20” ratio. It found that that, in 2012, a San Francisco resident in the 95th percentile (the top 5 per cent) earned 16.6 times the income of a resident in the 20th percentile. In New York, the multiple was 13.2, compared to 8.2 in Omaha, Neb., and 7.7 in Witchita, Kan.
More equality tends to mean less economic dynamism. Omaha and Witchita are nobody’s idea of booming cities. But San Francisco and New York are on fire, with rich intellectual and social fabrics, and world-class cultural infrastructures underwritten by their wealthiest citizens.
They are also the main battlegrounds in a recent explosion of American class warfare. New York’s new mayor, Bill de Blasio, swept to victory last fall with his theme of a “tale of two cities,” repudiating his predecessor Mike Bloomberg’s defence of Wall Street as the city’s economic lifeblood.
San Francisco has seen a revolt against the tech sector and its spiralling salaries, which have driven up rents and driven out the poor. “Google Buses” that pick up Silicon Valley workers at city stops have come to symbolize class divisions that some politicians are only too eager to exploit.
Can Toronto’s mayoralty race avoid a similar descent into class warfare? Toronto’s 178,000 tech workers and the 230,000 people who toil in its financial-services sector earn above-average incomes. The city’s continued economic dynamism depends on having more of them, not fewer.
Ms. Chow has demonstrated a singular lack of sensitivity to this fact by opposing the expansion of Toronto’s island airport, which is a critical advantage for the city’s businesses. The current expansion proposal isn’t perfect, but it deserves a full hearing. A downtown Toronto MP can get away with NIMBYism, but a mayor must show leadership.
Ms. Chow must decide: Will she be a de Blasio or a Bloomberg?