Thursday, December 15, 2005

Power To The City

The city of Toronto is going to be able to pick people's pockets in more places than property tax assessments and licence fees once Dalton McGuinty's new legislation goes through. Those of us who, unfortunately, live and work here, had better be ready:

Under the proposed City of Toronto Act introduced at Queen's Park yesterday, the province is preparing to hand over powers and responsibilities to the city to reflect its size and status.

That means the cash-strapped municipality can decide to create fees and surcharges to generate revenue including:

A sales tax on tobacco and alcohol. That could mean taxes on booze at liquor stores, in bars and restaurants, and even at brew-your-own facilities.

A sales tax on entertainment. Anyone going to a movie, museum, concert or sporting event could be forced to pay a surcharge.

A city land transfer tax, which means home buyers could pay an additional fee on top of the existing provincial tax.

Surcharges and fees on parking lots or vehicle licence registrations. City officials have speculated about a daily $1 fee to park at downtown lots as a way to encourage transit use.

The act would also give city hall more say on development issues, allowing it to better control density and height rules, restrict demolition of heritage buildings and have power over destruction and conversion of rental housing.

It would also have the authority to negotiate directly with the federal government on issues such as immigrant settlement and child care.

But the city is banned from levying taxes in the key areas, including income, corporate, inheritance, gas or energy and a hotel tax. These taxes are considered important because they generate much larger revenues and grow with the economy.

Given the current Toronto city council's suspicion of wealth and enterprise, it is just as well that it has not been given the power to levy direct taxes, although such would likely be found ultra vires the province. Instead, expect to be nickel-and-dimed on a whole host of expenses.

To be fair, current constitutional arrangements leave cities entirely at the grace and favour of their respective provincial governments for their powers, because of the absolute jurisdiction provinces enjoy over municipal governments.

Subsidiarity remains the best principle in government as in life--higher governments or authorities should not assume powers that can be just as or more capably exercised by lower levels.

Toronto will also have responsibility over many areas previously under provincial control including:

Road tolls, though it will require provincial government approval.

Extending bar hours and setting holiday store closings.

Banning corporate and union donations to city council campaigns.

Changing the size and makeup of council and ward boundaries.

Delegating decision-making to council committees and community councils.

Creating a local appeal board for planning decisions.

Redeveloping contaminated land through borrowing against future tax revenues.

Setting speed limits on city streets — but they cannot exceed 100 km/h.

The legislation, to be debated during public hearings next year, also outlines changes to the city council structure. It follows proposed changes already adopted in principle by council where more authority is concentrated with the mayor including the power to pick committee chairs, who then serve on an executive committee.

That committee would drive the mayor's agenda as well as propose and set a budget which council would only be able to approve or reject, with no line-by-line tinkering.

U.S. cities have been able to turn themselves around, where the political will is present, because of the greater powers in city charters and strong mayor systems. Rudolph Giuliani's example in New York is the most notable, but he couldn't have done it had the New York state government reserved as many powers to itself as Ontario has for Toronto.

But these new powers should not just be for Toronto, because it smacks of favouritism. They should be part of the Municipal Act for all municipalities to benefit from.

Otherwise, the only halfway reasonable McGuinty government proposal will just look like pandering to Toronto.

Source: Toronto Star

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