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John Tory says Olivia Chow isn’t a ‘fiscal conservative,’ so let's check his evidence

At a campaign rally this past weekend, mayoral candidate Olivia Chow cast herself as something close to a “fiscal conservative” — whatever that means — asking voters this question: “Who do you trust with the public purse?”

Opponent John Tory was not a fan of any of this. His campaign quickly put out a release accusing Chow of having a history of reckless spending and being a “career politician living on the public purse.” It’s not clear why the city’s operating budget always has to be compared to a purse.

But anyway.

As proof of Chow’s fiscal recklessness, the Tory team pointed to two things. First, they made the claim that Chow’s commitment to returning to the Scarborough LRT is not a fiscally prudent move, writing, “the reality is ripping up this agreement will not only cost Toronto taxpayers MILLIONS, it will greatly damage our relationships with both levels of government” Putting the word “millions” in all caps may help to sell the message, but it’s hard to square this purported reality with actual reality.

The subway plan put the city on the hook for at least an extra $910 million in capital costs. That’s indisputable. Residents are already receiving property tax bills with a special levy designed to raise that money. And there's yet to be a reason to fret about cancellation costs that could theoretically result from switching the plan back to LRT. The city and province have yet to amend the Master Agreement giving the green light to the original LRT plan, and the TTC has said they’re holding off on design work until after the election.

The second part of the Tory release cites a series of news articles from the halcyon days of the 1990s. Let’s go through these claims one by one:

In 1993, City Councillor Olivia Chow was the top spender at City Hall. (Toronto Star, February 1994) Five years later, in 1998, she was the second highest spender. When confronted with her excess, Ms. Chow responded, “These things come out and people just raise a fuss. It just diverts us from our work in some ways.” (Toronto Star, March 18, 1999)

Both claims here are true, though they leave out some context. These numbers refer only to Chow’s councillor office expenses. In 1993, Chow spent $19,299.15. At the time, council used a formula that gave councillors a base $10,000 budget, plus 25 cents for every household in the ward. Since Chow represented the city’s most populous ward at the time, she got the biggest budget.

In 1998, after amalgamation changed the way office budgets work, Chow spent $69,336, second to Coun. Giorgio Mammoliti. The budget was $70,000. The Tory release leaves out the first part of her Toronto Star quote: “If there is real abuse, that has to be reported. But I don't think there's a lot of abuse. Every dollar is accounted for. You can't get paid without your receipts.”

In 1996, when the TTC needed to increase its fares by 10%, Olivia Chow suggested an additional tax increase to protect social programs, and blamed the Provincial government for the City’s woes. (Toronto Star, November 26, 1996) Is Ms. Chow’s plan as Toronto’s Mayor to blame the Provincial government every time she needs money for a “social agenda”?

This is an odd one. The article in question is actually from November 26, 1998, and the proposed TTC fare increase was 10 cents. At the same time, Mayor Mel Lastman was trying to achieve a residential property tax freeze, which effectively means a cut to city revenues. This was happening just after amalgamation, at a time when provincial cuts driven by Premier Mike Harris had put the city on the hook for millions in additional costs.

Here’s the full quote from the Toronto Star: “Councillor Olivia Chow (Downtown) also said she’d consider a tax increase before cuts to services such as day care, and she blamed the province fur the city’s financial woes.”

Aside from day care for kids, nothing else resembling a “social agenda” is really mentioned.

In 1998, Toronto’s debt had reached $1 billion. But instead of finding ways to cut spending, Chow fought to borrow up to $500 million more. (Toronto Star, December 19, 1998)

This also comes from an article about the state of the city’s finances post-amalgamation. At the time, budget chair Tom Jakobek was arguing against increasing the amount of debt-financing used to cover capital needs. Chow disagreed, pointing to figures showing that the amalgamated city’s debt was only 7.5 per cent of annual revenues, whereas the previous Metro Government had a debt-to-spending ratio of 12.5 per cent.

In 1999, Olivia believed the City should “borrow to the limit.” Even after the Province gave the City an additional $75 million, Olivia Chow fought to see Toronto borrow to the limit to expand social programs – which would have added an additional $100 million to the City’s debt – before interest payments. (Toronto Star, March 24, 1999)

Here’s the deal here: Harris’ government had offered Toronto special loans up to $100 million a year to deal with amalgamation-related costs, but then later announced $75 million in additional funding for health and homelessness programs in Toronto as part of a pre-election spending blitz.

Again the Tory campaign suggests Chow wanted to fund mysterious “social programs,” but the article was more specific. Here’s the full quote from the March 24, 1999 edition of the Toronto Star: “She said the city should borrow to the limit, in addition to using the new $75 million, to provide services such as children's dental work and garbage collection for downtown businesses.”

Chow was also concerned about whether the new provincial money would come with caveats. From the article: “Chow said she has seen too many provincial announcements that extend money with one hand while removing it with another.”

Later that year in 1999, Councillor Chow took the position that the City not honour the repayment of the received Provincial loans, despite having voted just months before to receive them on that basis. (National Post, April 23, 1999) When you borrow money you pay it back. Does Olivia Chow believe government should not be held to the same standard?

In this National Post article, the issue was again whether to raise TTC fares by 10 cents. Chow worked with a bunch of other councillors to reject the fare hike and send the issue back to budget committee, with a plan to use money made available partly because of the city's provincial loans to avoid the increase. Chow was indeed adamant throughout much of 1998 and 1999 that the city likely wouldn't have to repay the loans.

Here’s the quote: “Ms. Chow, a city councillor, said there's more than $200 million available from a number of sources that are now intended for new capital projects and debt reduction. They include a provincial loan of $100 million that, she maintained, the city will probably never repay since the money was intended to help Toronto deal with the Tory government's downloading of services onto the municipal tax base.”

The Tory campaign is of course correct when they say that borrowed money generally has to be paid back, but this was a unique circumstance. And it turns out Chow was right: the province never came to collect its post-amalgamation loans. They formally forgave the city of all money owed last year.

This post was originally published at on 2014-06-25T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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