With structural budget problems, the City cannot solve its challenges through efficiencies alone.
The City’s 2017 budget is being debated, and thanks to a report on the equity and economic impacts we know about some of the proposed cuts and the effects they will have on city residents. Among the proposals are: close the Downsview Dell emergency shelter, eliminate homelessness-prevention services, and slash Toronto Community Housing funding.
While the budget isn’t yet finalized and many of the most draconian cuts are still hypothetical, the City has a $91-million hole to fill. Sean Meagher, executive director of Social Planning Toronto, says that until we begin to look at the City’s budget in a new light, this kind of desperate wrangling will continue to happen year after year. What’s worse, the City will be in for a bumpy ride when “sooner or later” the real estate market dips, leading to a decline in land-transfer tax dollars.
“The reality is that there will never be enough efficiency to solve the problem,” said Meagher.
A huge part of the problem, as Meagher explained it, is that the City can’t levy income and sales taxes, and the province no longer funds some of the services— such as the TTC—it used to put those taxes toward. The result is a budget stretched for cash, with councillors considering measures that would devastate Toronto residents while offering only temporary budget calm.
“What this budget does is set out in the clearest terms we could ask for what the choice is for the City of Toronto,” said Meagher. “It is either we eviscerate things that are critically important to the well-being of some people, or we make a point of avoiding making anybody else contribute enough to be able to fund the kind of city that we historically have said we want to have.”
Some signs point to evisceration. The $91-million shortfall in the budget could be covered by increasing the property tax by 3.6 per cent (above the two per cent it’s already set to increase by), but Tory is standing firm in his promise not to increase property taxes above inflation. By asking each department to shave 2.6 per cent off its budget, regardless of size, the mayor is ignoring the fact that some departments operate on shoestrings while others have ballooned to $1 billion. None of that speaks to a firm commitment to social services, and it seems to point to, at best, Council being unwilling to face the choice Meagher laid out. At worst, it would appear to imply that they have made their choice.
“I don’t think it’s fair to say that people just don’t want to do anything,” said Meagher. “I think it’s fairer to say that they need to go through the process of recognizing how critical and unavoidable these choices really are.”
But, as Meagher also noted, City Council has spent the past six years straining to find what wonks and politicians call “efficiencies”—cuts to budgets, services, and staff. In that time, even after bringing in accounting firms to scour the numbers, “we’ve never found anywhere near the amount of savings we would need to balance our budget. We’ve never even found a tenth of that.”
Unless and until Council makes a decision on whether it is in the business of providing services—which would require properly funding them, and demanding the tools to do so in a sustainable manner—or balancing budgets no matter the cost, the people of Toronto will continue to receive mixed messages. Is Council prepared to fight poverty in the city, as evidenced by its passage of the Poverty Reduction Strategy? Or does it want to balance budgets while sacrificing priorities, as evidenced by the (generously speaking) lacklustre funding for said strategy? That this debate is occurring as some shelters have been operating at nearly 100 per cent capacity and the city enters the coldest months of the year does not portend well.
The good news is that the budget has yet to be finalized, and the worst may not come to pass. The bad news is that without a dramatic shift in how Council and the mayor approach budgeting, we are all likely to revisit this drama in 12 months.