The long-term financial well-being of Ontario’s capital city should be a default priority at Queen’s Park, not something deserving of any sort of special arrangement, condition, or concession. Yet Premier Doug Ford called the “new deal” between his government and the City of Toronto — a deal exceedingly modest in scope — “historic” and “game-changing.”
In brief, the agreement will see the province upload the Gardiner Expressway and the Don Valley Parkway and provide funding for 55 subway trains (on condition that the feds match that commitment), resulting in an estimated $7.6 billion in capital relief for the city. Over the next three years, Ontario will also provide Toronto with up to $1.2 billion in operating funding for two light-rail lines, transit operations and safety, and homeless shelters, and more. In return, the city has agreed to accept the province’s plans to acquire land at Ontario Place.
It should not qualify as big news when the government of Ontario comes to the aid of its biggest city, which happens also to be a national centre of culture and finance. But economic policies that have been in vogue among liberal and conservative governments nationwide since the 1980s have forced cities to “do more with less” and “find efficiencies” — all while taking on additional responsibilities related to housing, transit, health care, education, and infrastructure.
It is because Canadian cities are so ludicrously underfunded and so needlessly constrained in generating revenue that Toronto finds itself in its current financial mess. There’s no doubt that the pandemic helped push big-city finances over the edge — it resulted in reduced operating revenues and created greater demand for services — but the root cause of the problem has been decades in the making.
All this may seem of secondary importance given that there are very real current and projected budget deficits and that Mayor Olivia Chow might not have had many options.
Still, the jubilation that followed news of the agreement between city and province seemed out of place given the realities of the agreement as proposed. While uploading responsibility for the Gardiner and the DVP to Queen’s Park may provide $7.6 billion in capital relief for the city, the $1.2 billion Ford pledged over three years doesn’t address the $1.5 billion deficit Toronto has to deal with right now.
Remember, this isn’t $7.6 billion in new money but a reduction of anticipated deficits.
And the province insists that Toronto use whatever capital relief the uploading affords for the purposes of housing development. The homelessness crisis Toronto is experiencing will not be addressed in the near term by building new housing at some point down the line. As any social worker who works with the homeless will tell you, the root cause of the problem is not simply that people are “unhoused” but that the social-safety net that once supported them is frayed (or otherwise no longer exists).
It may be unfair to expect Chow to accomplish the impossible, but the mayor deserves to be criticized for giving up too much in return for too little. Forget the spin: this deal doesn’t shore up the city’s finances this year, and anything less than that is inadequate.
Transit analyst Steve Munro has pointed out that the financing and governance aspects of the agreement also leave a lot to be desired, in that any analysis of the city’s long-term financial viability is likely to be postponed until after both provincial and municipal elections (circa 2026) have taken place.
The province insists that the city seek out all possible and potential efficiencies, which assumes that there’s money to be saved simply by belt-tightening.
That doesn’t seem to be the case. Toronto’s financial problems aren’t being caused by lavish spending on unnecessary things but by operating revenue insufficient to cover the services residents depend on. In 2011, then-mayor Rob Ford commissioned a third-party audit of city services, convinced there was gravy to be found. As Matt Elliott writes in the Toronto Star, “The process, however, concluded not with a damning report that city hall was wasting all kinds of money, but with a report that said the city was generally delivering the level of services municipalities should deliver.” What grounds do we have to expect a different result now?
Additional cuts to already underfunded services won’t provide any new money (again, they will merely service the deficit) and could exacerbate a dire situation. The homelessness crisis is not going to be solved with less money.
It's the rigid and unworkable notion of “fiscal restraint,” backed by groups such as the Fraser Institute — which would rather see Toronto cut spending than introduce a modest sales tax to shore up its finances — that serves as the root cause of these problems.
Which brings us to the matter of Ontario Place. Several commentators have indicated that Chow was never going to win this fight anyway, so it was worth giving up in order to secure the agreement for provincial funding and support. I would agree with that if this were a much better deal, but it isn’t. As much as Chow and many of her supporters may want to play this off as a win, I suspect voters will remember how quickly she caved on a key election promise and how little the city got in return.
It isn’t Chow or the people of Toronto who got everything they wanted in the deal Ford called “really one-sided”: it’s Ford.
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