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The premier’s pledge is a good investment—for him. It buys him time so he doesn’t have to deal with the real issue, writes Randall Denley
Premier Dalton McGuinty threw Ontario municipalities a nice big, juicy bone this week, but he’s still stalling on the fundamental changes required to get your property taxes under control. Given the inability of the province’s mayors and city councillors to get the public mobilized on this issue, McGuinty can afford to stall for quite a bit longer.
The province’s towns and cities will share $1.1 billion to improve their roads, bridges and sewer pipes. The money is a one-time deal, part of a $1.7-billion surplus from the last fiscal year. Ottawa will get a $77.2-million slice.
What McGuinty should have been telling us is when his government will stop making cities pay for provincial social services. Ontario municipalities are paying about $3 billion in costs that other provinces cover with their own taxes. In Ottawa, the bill for covering the city’s share of provincial services is $257 million, or about $447 for the average home. When education is included, about one-third of your property-tax money either goes directly to the province for education or covers the costs the province forces cities to bear for things like welfare.
A year ago, McGuinty spoke to the same association of municipal politicians and said he’d fix the problem. He even made a modest down payment on doing so, taking back the costs of disability support payments and the provincial drug benefit program. That reduced the size of the downloading burden by about one-quarter, over four years. The gesture served its purpose at the time, placating municipal politicians sufficiently to keep them from pushing the issue during the provincial election.
More help was at hand, McGuinty said a year ago, but he had to wait for the report from a group of municipal and provincial politicians who were studying the details. The group has been at the task since the end of 2006, and there has still been no public report. Ottawa city councillor Peter Hume, the new president of the Association of Municipalities of Ontario, says that the province and his group are still negotiating and he expects to see an outcome by late this fall. We’ll see, but McGuinty made a point of telling the municipal politicians not to expect much.
Instead, the premier offered another distraction in the form of a pot of capital money. That $1.1 billion sounds like a lot, until you put it in the context of what cities actually need. AMO estimates that it would cost about $50 billion to repair, upgrade and expand roads, bridges, sewers and water services to the level they should be. In Ottawa, city staff say our municipal infrastructure backlog is about $1 billion. The city would require $100 million every year for a decade to correct the problem, not a one-time payment of $77 million.
In addition, the public is now demanding that the city do something about older sewers downtown that discharge sewage into the Ottawa River. The fix for that is sometimes estimated at $600 million, although the city is likely to find a cheaper solution. McGuinty urged the city to put the new money toward that problem. It’s a perfectly good idea, and clever, too. When councillors inevitably decide to spend most of the latest windfall on something else, the premier will be able to reject their future requests for Ottawa River cleanup money, saying they could have spent the most recent amount on it.
Lower-tier politicians are always torn between the desire to make friends with the people in provincial government and the need to take a tough line and stand up for the people they represent. Usually, they go along, hoping that the provincial politicians really will turn out to be their friends.
It would be fair and reasonable for the province for pay for its own services from the array of taxes it levies and leave the cities to cover their part from property taxes. Fair and reasonable doesn’t mean much in politics, though. If McGuinty does the right thing and uploads the cost of provincial services, it would cost $3 billion without providing any new service for which the province could take credit. Municipal politicians would reap all the benefits, being able to lower taxes or expand services.
The province is never going to be in a rush to fix this problem when it can spend money on things where it will get the credit. Municipal politicians seem to have failed to grasp that basic fact. They’ve let the premier stall for years on this issue. While he was doing that, program spending was shooting up. Now, the Ontario economy is in the dumps and it really will be difficult for the province to afford to do the right thing.
Contact Randall Denley at 596-3756 or by e-mail,
rdenley@thecitizen.canwest.com