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Index for my Toronto Budget 2004 project
905 Free-Riders Are Also Complainers

Today's Toronto Star reports that (suburban Toronto) York and Peel region are protesting their support of social programs in the city:

York Region politicians are demanding the province eliminate social service pooling with Toronto, saying the $80 million a year they send to the city is needed for their own cash-strapped programs. "I really resent having to put less money into our own social housing, public health or children's services because we have to send millions down to Toronto," Councillor Joyce Frustaglio said at the region's final council meeting of the year.

Under a provincially mandated policy put in place in 1998, the cost of social housing and welfare is pooled across Greater Toronto, with most of the money controlled by Toronto for its own programs. Toronto politicians say pooling resources is fair because the city has a far larger welfare caseload and more onerous social housing pressures, some of it coming directly from the regions.

Unfortunately, 905ers are forgetting the degree to which they are actually being supported by the city.

The root of the problem lies with Mike Harris and his 1995 election strategy. He promised massive tax cuts and was supported by most of the rural and suburban areas of the province. Unfortunately, the size of his tax cuts were such that it was impossible to slash programs enough to pay for these cuts and balance the budget at the same time. So, Mr. Harris rearranged the alignment of which costs were to be handled by the province, and which by municipalities. The downloading scheme freed the province of expenses it couldn't cut, by making cities responsible for paying for them -- this was done even when common sense would suggest the opposite.

The brilliance of this plan was that it did not strike evenly. It just happened to turn out that Harris-voting rural and suburban regions reaped a benefit through this restructuring whereas the non-Harris-voting cities took a tremendous hit.

So, Harris was able to cut taxes and eliminate the deficit not (entirely) by cutting costs, but (also) by leaving urban (Liberal-voting) taxpayers holding the bag for services that could not be eliminated.

It turned out that the burden of this switch was going to be too heavy for Metro Toronto. Although it is the largest generator of wealth and growth in Canada, Toronto also has more than its fair share of people with difficulties from around the world, around the country, and around the province.

The imbalance that was created was embarrasingly bad. First, there was the risk that downloading could actually cause the City of Scarborough to go bankrupt. So, despite all expert advice suggesting it would be horribly costly, the province forced the cities of Metro Toronto to merge. The results have been miserable, and just as predicted.

Second, the effects of the downloading were still too-blatantly brutal, and so the province fairly decided to soften them by instituting social cost sharing in the Greater Toronto Area. These are the costs that York and Peel are complaining about.

In a way, they do have a point. These social costs should actually be supported provincially. Instead Queen's Park wants to take income taxes from its golden goose without giving much back.

However, the bottom line is that although things may be hard in the 905 region, they still have the upper hand in an unfair deal.



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