Archived columns and blog posts by Matt Elliott

Ford's inconsistent budget direction makes Toronto an easy target for provincial cuts

By: Matt Elliott Metro, Metro Canada Published on Wed Jun 26 2013

Pop quiz. Which of these statements more accurately describes the state of Toronto's finances?

1. The City of Toronto boasts a bloated budget, rife with lingering mismanagement and piles of waste. Toronto residents are overtaxed to prop up a bureaucracy that could be run far more efficiently.

2. The City of Toronto struggles with chronic underfunding from the provincial government. Toronto desperately needs more revenue so it can effectively provide the services its residents demand.

If you're Mayor Rob Ford, the answer, apparently, is both. But only sometimes. Mostly it's the first one. But then, when the provincial government announces they're not coming through with some funding, it suddenly — maybe temporarily — becomes the second.

Such is the inconsistency that comes with Ford finances.

When Ford cuts city revenues, for example, it's a good thing. Cutting the vehicle registration tax, by his math, saved taxpayers $200 million. Continuously squeezing the budget by increasing property tax revenue at a rate lower than inflation is also, we're told, good budgeting. And reducing the city's cash cow land transfer tax to save the average home-buyer a fraction of a percent off their purchase price? That's just straight-up financial wizardry. That's stopping the gravy train. That's respect for taxpayers.

But only when it's Rob Ford cutting city revenues. When the province comes along and tries to do the same thing — like, say, take a $150 million bite out of the city's expected revenues — that's different. Somehow.

Was the province right to cut into city funding the way they did? No. Of course not. I've looked at their numbers and, while there's a case to be made that Queen's Park will offset some of the lost revenue by uploading programs, the simple reality is that city manager Joe Pennachetti was led to believe that this money would continue to come to the city until 2018. The province has altered the deal, and seemed to do a pretty lousy job communicating with the city in the process.

But Ford can't simply play the hapless victim in this funding fight. His confused messaging on the city budget painted a giant target on the city's back. He's talked Toronto up as a city with too much revenue and miles of untapped program efficiencies while at the same time taking potshots at the provincial Liberals for their fiscal management. He's also changed the channel on what had been seven years of relentless intergovernmental negotiations by his predecessor, instead focusing most of his attention on trying to eliminate parts of the city budget that bother him. When finance minister Charles Sousa looked through his budget for savings, Toronto was bound to look like a pretty easy mark.

After all, the amounts cut are not especially huge — the revenue could be made up with a slightly higher-than-normal property tax increases over the next couple of years. That would still leave Toronto with low tax rates relative to the rest of the GTA. Or Toronto could just step up and use the special taxing powers Queen's Park handed the city with the City of Toronto Act back in 2006 — the ones Ford said we didn't need.

And what about all that waste Ford says still exists at city hall? Surely there's another $150 million in savings lying around. There's always money in the gravy stand, right?

It was no surprise earlier this week that Sousa and Premier Kathleen Wynne stuck to their guns, and refused to back away from the revenue cut. It was also no surprise that Ford took the news badly, immediately jumping to the conclusion that programs would have to be cut to make up for the lost revenue. It hardly matters. If the last couple of municipal budgets are any indication, Ford won't end up having a whole lot to do with how Toronto City Council chooses to make up for the lost provincial cash.

But I'd bet his incoherent and inconsistent messaging on city finances had something to do with why the money was pulled in the first place.

This post was originally published at on 2013-06-26T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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