Reworking Toronto's finances
A look at how Toronto's leading mayoral candidates would reshape the city's finances.
As Toronto's mayoral campaign heads into the home stretch, fiscal restraint has come to the forefront as a key campaign issue.
The city consistently faces a structural shortfall — every year, its expenditures outstrip revenues. Every year, the city has to dip into its reserves, increase taxes or cut services and look to unexpected surpluses from past years to the balance the books.
The Toronto Board of Trade estimates the city's structural deficit — currently estimated at $443 million — could grow to $1.19 billion by 2019 if left unaddressed.
Meanwhile, the city's vehicle registration tax and the land transfer tax have attracted controversy from critics who pan city hall for being too eager to reach into the pockets of Torontonians.
In light of this, all of the mayoral frontrunners — except for Deputy Mayor Joe Pantalone — say the city's finances are a mess and are urging restraint.
But all vary in the degree to which they would cut spending. This is a brief summary of how they hope to rework the city's finances. Their quotes are taken from appearances they made on CBC's Metro Morning in August.
Rob Ford
Ford has been a city councillor for 10 years, and a vocal critic of Mayor David Miller and his allies for seven of them. Ford says the city's way of thinking about fiscal responsibility is fundamentally broken, saying the city is addicted to spending and that citizens are overtaxed.
Key platform planks:
- Cut the number of councillors in office to 22 from 44.
- Outsource some city services, notably garbage collection.
- Find efficiencies in city spending.
- Put an end to sole-source contracts and put all city contracts out for tender.
- Eliminate the city's vehicle registration tax and the land transfer tax.
He consistently declines to use any part of his $53,100 office budget and says other councillors should take a page from his book.
The common knock against him is that he is more content to be a council gadfly than to get down to the nitty-gritty of governance and consensus-building that are essential traits for a mayor.
Key quote: "There's millions of dollars of waste as you know. So we're going to have to eliminate that," he said.
"The second thing is, we're going to have to find efficiencies."
Reality check: Ford hasn't detailed where he would find those efficiencies — a particularly important point considering Ford plans to phase out the vehicle registration tax, the land transfer tax, hire more police officers and make Toronto Transit Commission an essential service. He insists he would do all this and balance the books without cutting services. What he has left unanswered is how he could pull off that balancing act.
Joe Pantalone
Joe Pantalone, currently the deputy mayor, has been a fixture on city council for 30 years. He is positioning himself as a steady hand that would continue along the same path that David Miller has started.
But that, according to his rivals, is the last thing the city needs.
Key policy planks:
- Eliminate the vehicle registration fee "over time."
- Continue to ask the province and the federal government to help fund key services like the TTC.
- Freeze property taxes for seniors with household income less than $50,000.
Pantalone contends that the city's financial situation isn't as dire as many say — after all, Toronto delivers balanced budgets every year, as it is legally bound to do, he says. But he acknowledges that the city struggles to bridge the budget gap every year, and is calling for the provincial and federal governments to help fund important services, particularly public transit.
Key quote: "The reality is that Toronto does not have a deficit," he said.
"And also, the reality is, of all the taxes that people pay in Toronto, the City of Toronto gets eight per cent. Ninety-two per cent goes to the federal and provincial government. And the city is always struggling to make sure that the services we are supposed to be providing for Torontonians are either managed by us from that eight per cent, or we're always insisting and crying foul that the federal and provincial government are not investing in this city."
Reality check: There are no guarantees when it comes to asking other levels of government for funding. He has offered few — if any — specifics on how to eliminate the city's budget gap.
Rocco Rossi
Rossi says his experience leading major entities like Torstar Corp. and the Heart and Stroke Foundation show he's the man for the city's top job. He also frequently references his immigrant roots and talks about how he is a self-made man.
Although he was also once the director of the federal Liberal Party, his rivals have said he lacks experience in municipal politics. Rossi sees that as being in his favour.
Key policy planks:
- Institute multi-year planning for the operational budget.
- Sell Toronto Hydro in order to pay down debt and make capital investments.
- Institute a hiring freeze at all city departments except police, EMS and fire services.
- Open up garbage collection to outside bidders.
- Pursue more partnerships with the private sector to minimize costs.
Rossi says city hall needs to get its priorities in order and spend its money more prudently.
Key quote: "We need to stop the waste. It's not about downloading, it's about dumbloading. Right? We've had too much dumb decision-making, poor decision-making. And we can reconfigure things. And that's why I'm running for mayor."
Reality check: It's unclear how much cash would come from selling Toronto Hydro. In addition, a sale would also provide a one-time cash infusion. In 2009, the city received $44.9 million in interest payments and $25.2 million in dividends from Toronto Hydro. Selling the corporation would mean the city would no longer be able to bank on these annual revenues.
George Smitherman
Smitherman boasts extensive political experience as the former provincial health minister, energy minister and deputy premier. But he carries a fair bit of political baggage along with that, most notably the eHealth millstone.
Smitherman was in charge of the Ministry of Health when the much-criticized eHealth program — in which the province is attempting to transfer all medical records into electronic databases — was implemented. Critics have said someone who was unable to manage the finances of the eHealth program is unfit for Toronto's top job.
Key policy planks:
- Freeze city hiring and property tax rates for a year.
- Acting as his own budget chief, Smitherman would review the city's finances in order to find efficiencies.
- Cut $2 million from the staffing budgets for councillors and the mayor.
- Eliminate a number of councillor perks, including free language lessons.
Smitherman doesn't think the city is facing a financial crisis, but believes the city needs to exercise restraint.
Key quote: "It will always be … a big challenge to have the resources that you require," said Smitherman.
"But I think that Job 1 for me as a mayor working with city council is to restore a sense of pride in our city, in part by giving way and getting away from this annual story line where Toronto projects itself as broke and bankrupt and powerless. I think it is within Toronto's power to have a balanced budget, but restraint will be necessary to achieve that."
Reality check: Rivals have accused Smitherman of being a late convert to fiscal conservatism. His plan to conduct a systematic review of the city's budget and to freeze property taxes came months after rival candidate Sarah Thomson made similar pledges.
Sarah Thomson
Like Rossi, Thomson touts her business credentials as proof she will be able to bring order to the city's finances. She has frequently talked about the poor fiscal planning and decision making at city hall, and has called for a reduction in city staff.
Key policy planks:
- Institute road tolls to fund subway expansion.
- Eliminate land transfer tax.
- Open up city services for tender.
- Freeze councillor salaries for four years and cut office budgets to $35,000 from $53,100.
- Reduce the number of city staff.
Key quote: "I think there's a lot of problems with city management that we need to deal with. Most of the problems you look at, if it's the TTC or spending issues, come in play when you look at the management. So I think we need to get a better management in the departments at city hall where we're overspending."
Reality check: Her plan to impose road tolls on the Gardiner Expressway and the Don Valley Parkway excludes highways 400 and 401. Her plan has already attracted criticism for unfairly targeting some commuters while leaving those going in and out of the city on 400-series highways with free rides. Furthermore, highways 400 and 401 are governed by the province, not the city, so even if Thomson wanted to address this criticism, she would have to convince Queen's Park to agree to impose tolls on those highways.