Archived columns and blog posts by Matt Elliott

Toronto vs. Ontario: If the city wants more provincial cash, the numbers better add up

By: Metro Published on Mon Feb 02 2015

Things you inherit when you become mayor of Toronto: a pretty nice second-floor office, a dorky ceremonial chain of office you have to wear for official photos, an underground parking spot.

And, oh, yeah: a complicated and often contentious relationship with the Ontario government.

Mayor John Tory has had a taste of that over the past couple of weeks as he’s clashed with the province over the city’s 2015 budget. The details of this latest spat are unique. The province cut funding for housing, creating a huge budget hole for Toronto. Toronto asked Queen’s Park for help. The province offered a loan with absurd terms. The city said thanks, but no thanks.

But look past the details, and the central issue is the same as it always is when the city and the province do battle. It’s about money — who has it and who needs it.

And it’s not so easy to pick sides.

The city’s perspective is simple. In the 1990s, former premier Mike Harris forced the City of Toronto and other Ontario municipalities to assume funding responsibility for a range of social services. Harris’ government also cut off operating funding for TTC and smushed a bunch of unwilling municipalities together to form the amalgamated City of Toronto.

Almost two decades later, Toronto is still struggling to deal with costs pushed on it by the Harris years — especially when it comes to transit and housing. So, Toronto’s argument goes, Queen’s Park should fix that.

But Queen’s Park has a decent counter-position. Premier Kathleen Wynne can point out not only that provincial support has increased over the past decade, but also that Toronto, for all its complaining about being cash-poor, gets by with very low property taxes.

People bristle when they hear that, but it’s true from every angle. In percentage terms, Toronto has rates half those of places like Hamilton or Oshawa. In real dollar terms, taking into account Toronto’s higher real estate values, T.O. still comes out at the bottom, with the average annual tax bill in the big smoke coming in at $3,248 in 2014 compared to $4,494 in Caledon and $5,036 in Richmond Hill. So isn’t it fair for the provincial government to look at Toronto’s requests for funding and ask, “Hey, why should we subsidize those low tax rates?”

In recent years, Toronto hasn’t had many good answers to that question. Instead, Toronto politics has been dominated by incoherent arguments from popular politicians, who demand provincial money with one hand while promising local tax and revenue cuts with the other.

And that’s just not going to work. If Toronto wants to make progress — and put an end to the eternal Toronto versus Ontario battle — the city’s arguments have got to start adding up.

This post was originally published at on 2015-02-02T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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