Retiring Toronto Councillor Offers Words of Wisdom for Vancouver

Retiring Toronto City Councillor Kyle Rae is sick and tired of the hopeless fiscal situation of municipalities.

Retiring Toronto City Councillor Kyle Rae is sick and tired of the hopeless fiscal situation of municipalities.

The political retirement of veteran Toronto City Councillor Kyle Rae is not particularly significant for us here on the west coast as a stand alone story. Rae was Toronto’s first openly gay politician, and spent 18 years as the representative for Toronto Centre-Rosedale.

What is significant from the perspective of Vancouver, and indeed all BC municipalities however, is his reasoning for doing so.

In fact, in light of Vancouver’s current budget crunch, local Councillors and critics alike would be wise to use his experience as an indicator of what could be our future.

 

The most glaring message that I take from Rae’s words (read ahead) is a warning that municipalities are financially handcuffed by their provincial masters, and that without fiscal responsibility and tough decision making at the civic level, all hope for effective local governance is lost.

Allow me to contextualize.

Most politicians leave office claiming success with their work and a legacy of positive change. The straight-shooting Rae does not fall into this group, as evidenced by this excerpt from an email to supporters:

“I wish I could say that I have left the City in a better state than I found it.”

In fact, Rae’s prognostications about Toronto are very bleak:

“This is my 19th year and I don’t see a very healthy future in the city’s fiscal situation and I’ve spent 18 years trying to improve it.”

Why does Rae feel this way? Well, it has to do with the unbearable costs that have been shifted to Ontario’s municipalities over the past 15 years:

“I arrived before the Harrisite amalgamation and download. Queen’s Park has hobbled the City’s ability to deliver municipal services. Downloading provincial programs and services onto the municipal taxpayer has wrecked havoc on our parks, recreation centres, libraries, community services and culture. The federal and provincial aversion for responsible tax policy and appropriate tax increases has resulted in more than 15 years of cowardly downloading onto the City.”

I am presenting these quotes in order to frame the current budget cutting process that Vancouver City Council is spending ridiculous working hours trying to complete in these final weeks of 2009.

According to a 2007 pre-budget submission made by the Association of Municipalities of Ontario (AMO):

“Canada is the world champion of reliance on property taxation as revenue. At the local level, on national average, property taxes accounted for 40.4% of total revenues in 2004/05. This share has remained stable during the last 15 years, peaking at 43.4% in 1997/98.”

As I have mentioned in many previous posts, municipalities do not exist except by the will of the provinces. They are not constitutionally recognized in this country, and as any civic politician in this country will tell you, the quest for such recognition is solely motivated by the increasing demands upon municipal fiscal resources (or lack thereof).

The Constitution Act, 1867 established the parameters of current federal and provincial relationships with municipalities. Section 92 of the Act sets out the exclusive powers of provincial legislatures in 16 areas, with section 92(8) giving the legislature of each province exclusive responsibility for making laws relating to that province’s municipal institutions.

Unlike their provincial and federal counterparts, municipalities can’t run annual deficits. As mentioned above, property taxes tend to comprise the majority of their revenues, forcing options like using debt financing to fund major capital projects.

Now while the Mike Harris binge of municipal amalgamation and the associated downloading of responsibilities has hit Ontario the hardest out of all the Canadian provinces, British Columbia’s municipalities have not escaped the cowardice of their provincial government.

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