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Globe editorial: Canada’s cities need help. Ottawa, throw them a life preserver already

Canada’s cities need help. Ottawa, throw them a life preserver already @GlobeDebate

2020-06-03 4:48:00 AM

Canada’s cities need help. Ottawa , throw them a life preserver already GlobeDebate

So the real question isn’t whether Ottawa is allowed to help cities, it’s whether it wants to

Government deficits are a reasonable and necessary response to a recession, but unlike the provinces and the feds, cities aren’t allowed to run deficits. (Given their thin, property-based tax base, that’s probably a good thing.) To avoid a shortfall this year, Canada’s big cities will have to either bring in large tax increases or significantly cut services.

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Toronto appears to be the city most affected. That’s because many public services (public health, for example) have been downloaded by the province, and Toronto runs the country’s largest public transit system, whose fare-box revenues have evaporated. Mayor John Tory recently said that his best-case scenario leaves his city with $1.5-billion gap; the worst-case estimate has the city short $2.8-billion.

Unless we assume that the economy is never going to come out of recession, the budget gap faced by Canadian municipalities is temporary. As the economy recovers, emergency spending will fall, tax revenues will rebound – and people will want and need the full suite of municipal services. But without bridge funding to get from here to there, a city like Toronto faces dramatically increasing taxes in the middle of a recession (bad idea) or eviscerating services such as public transit (also a bad idea).

So why can’t the provinces deal with all of this themselves, and leave Ottawa out of it? Read more: The Globe and Mail »

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