Issue in Depth: Budget Debate

This has gone on every year since David Miller was elected mayor. First a panic is declared which justifies significant budget cuts, then more money is found and finally it is declared that with a lot of effort the 3% target has been met. The politicians present themselves as heroes because it appears that once again they have slain the budget dragon but is the crisis real?

The reality is that Toronto property taxes are lower than other municipalities in the GTA. This is a comparison of property taxes on homes in GTA municipalities for 2005, published in the Toronto Star on February 25, 2006.

Are Toronto property taxes out of control? We don’t think so. This is not to say that there is not a fiscal imbalance in this country. The federal government has strong taxing powers and is now running surpluses. The provinces and municipalities, who deliver most of the services and programs citizens need in their daily lives, do not have sufficient money. Clearly there needs to be a reordering of the way taxes are raised and distributed between the three levels of government. There also should be a decrease in the reliance on property taxes because it is inherently unfair. (See our paper on “Taxation.”) But these are different issues than the budget crisis that Toronto faces every year.

This crisis is of our own making. Nothing stirs the blood of the public more than a tax increase. In elections almost all municipal politicians promise no tax increases. The public loves it. No one likes to pay taxes and everyone believes their taxes are too high. But the reality is that municipal taxes are among the best value that citizens receive.

What if we raised taxes by 10%? This would be about $300 per family per year, less than one dollar a day. Imagine what the city could do with another $770 million dollars to spend. Clean and safe streets, meaningful youth programs, nutritious lunches for every school child, good co-op housing projects, stable investments in the arts, efficient and safe public transit that encourages people to get out of their cars, the rebuilding of our infrastructure, proactive programs to reduce air and water pollution, the list goes on.

There is no free lunch. If we want to build a livable city we have to pay for it, and the best way to do that is not through volunteer programs, as essential as they may be, it is through a fair and equitable tax system that provides the funds the municipality needs to create the great city of our dreams.