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University student Jonathan Matson, left, speaks with Chris Terry and his cat Isis in this June 4, 2008 file photo. Mr. Matson was one of a number of students who went door to door for animal services to inform pet owners about the city's licensing.Kevin Van Paassen/The Globe and Mail

Scrapping licences for cats and dogs, scaling back business permits and reducing by-law enforcement are the latest money-saving options served up by the consultants looking to separate the meat from the gravy at Toronto City Hall.

The cost-cutting suggestions are contained in the fifth instalment of a review of the city's core services obtained exclusively by The Globe and Mail. The latest report seizes on opportunities within Municipal Licensing and Standards Division, responsible for certifying everything from body-rub parlours to barber shops, plumbers to pawnbrokers at a $21.5-million cost to the city.

While the division is relatively small compared to the billion-dollar budgets devoted to economic development and public works, it looms large in the eyes of politicians seeking to trim red tape at City Hall - a central platform of Mayor Rob Ford's election campaign.

The latest analysis, generated by consultants at KPMG, offers something of a blueprint toward that end.

It proposes scrapping the city's cat and dog licensing program, outsourcing animal care and enforcement, reducing response time for emergency animal rescues and abandoning a pickup program for unwanted animals.

Beyond the kitty and canine realm, it suggests ditching categories of business permits that "do not clearly serve a public service." The consultants refrained from detailing all the business licences they consider to be extraneous, but the division controls a range of activities including bowling alleys, carnivals, nightclubs, tradespeople, parking lots and pet shops.

The report also suggests reducing "pro-active investigation and enforcement" of business licences, outsourcing waste diversion enforcement and replacing the current district-based licensing structure with a single city-wide system.

Taken as a whole, the proposals could drastically curb the long reach of Toronto's licensing program, exactly what Cesar Palacio, chair of the Licensing and Standards Committee, would like to see.

"What is clear in this report is that it's time to cut this city's red tape," Mr. Palacio said. "We have garbage police who are supposed to ensure recycling targets are achieved and pet detectives peeking through people's windows to see if pets have licences. Both of these things are not working. They should be reviewed and perhaps eliminated."

The report identifies few barriers to such a regulatory overhaul. Fully 100 per cent of the division's functions are termed "traditional," implying that the city has no legal obligation to deliver them.

"That really caught my attention, none of it is mandatory or essential," said Mr. Palacio. "That means we could have a lot of opportunity for reductions."

That's a stark contrast from previous components of the core service review, which identified few city departments delivering services over and above what is required by law. The consultants found, for example, that 96 per cent of programs delivered through the Public Works Committee and the Economic Development Committee are mandatory, figures that have foiled attempts to uncover widespread excess, or gravy, at City Hall.

But as politically expedient as slashing Toronto's regulatory body might be, it wouldn't come without a cost. Much of Toronto's licensing programs are money-makers. The Business Licensing and Enforcement department alone yields $6-million for city coffers.

Mr. Palacio said that he's already considering cost-cutting options not included in the review, such as improving purchasing rules and reducing back-office staff.

As for dog and cat licensing, Mr. Palacio says he's been in favour of scrapping the program, which actually nets the city $600,000 a year, due to the relatively low compliance among Toronto pet-owners. Just one-third of dogs and one-tenth of cats in the city are licensed, according to the report.

"Those numbers are extremely low," said Mr. Palacio. "It's time to look at different models used elsewhere, like micro-chipping, for example."

Approaches to animal licensing differ from city to city. Philadelphia manages its pet population through the health department. Melbourne contracts out animal management services to a humane society. Chicago and Boston maintain full shelter and emergency care units similar to Toronto, the consultant's report notes.

As well, some jurisdictions, such as Pennsylvania, have begun offering lifetime licences for pet-owners who implant microchips. Others, such as Montreal's Westmount neighbourhood, have recently increased regulations, requiring pet owners as well as dogs to carry city-issued identification cards.

Toronto will release the remaining KPMG reports over the next three days. The final report, and likely the most contentious, will come out with the Executive Committee agenda on Thursday and will focus on arm's-length agencies such as the Toronto Transit Commission and the Toronto Library.

Standing committees will debate each report over the next two weeks. They will provide suggestions to the Executive Committee, which will convene for a special meeting Sept. 19 to sift through a hefty package of proposed cuts. Their final omnibus proposal will go before council on Sept. 27 and 28.