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Index for my Toronto Budget 2004 project
Claire Hoy is Being Obtuse

In today's National Post, Claire Hoy writes about the New Deal for Cities. He doesn't get it, but I find it hard to see why, since much of what you need to understand the mayors' point of view is right there in his article.

He writes: (No link, since I'm writing this at the airport with a paper-copy of the Post, and they don't keep their content online for long anyway.)

The justification for the mayors' attempted colossal tax grab is that the cities "create" most of the wealth in this country, and therefore deserve a much larger share of their financial creation.

Montréal Mayor Gerald Tremblay, for example, told the mayor's summit that, "My city generates 50% of the GDP for Québec. And what I'm telling them [the senior levels of government] is let's not do what we've done in the past. Recognize us as partners."

The notion that cities -- or any level of government -- "create" wealth is nonsense. Governments don't create wealth, they tax those that do.

Hoy proceeds to impersonate a clueless person for another long paragraph, in which he entirely misrepresents what is meant by the statement "cities create wealth". No one means that statement to say that "city [governments] create wealth" (as Hoy interprets it). Instead, they mean it in what I think is the obvious way: Cities are where a lot of high-value productive work takes place, and as a result, city residents and businesses pay most of the tax that keeps Ottawa and the provincial governments in business.

Claire Hoy frames the New Deal for Cities as if it is a bureaucratic battle between one group of legislators who are jealous of the fat cat status of another group of legislators at another level of government.

Instead the battle is something more like this: Since we in the cities are paying so much tax to other levels of government, and since municipal governments have so many obligations (that are difficult to fund with property tax), how about giving some of our own money back to our municipal governments so that they can pay for these needs? Or, if you won't consent to that, how about giving our municipalities the right to collect taxes in better ways than just property tax?

Hoy himself writes:

There is, as politicians love to say when they're campaigning for your votes, only one taxpayer out there -- that would be you -- whether it's federal, provincial or municipal.

No kidding. So why, then, is the biggest, wealthiest city in Canada unable to balance its budget without blood and charity?



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