The Anatomy of a Revenue Crisis
This is a book about how public services and public sector workers have come under attack in an officially declared era of scarcity and fiscal retrenchment. As headquarters to the largest financial institutions and banks, as the largest municipal government and as the nation’s largest employment centre, Toronto is, in a sense, at the centre of urban neoliberalism in Canada. Canadian Union of Public Employees (cupe) Local 79 is also the largest municipal union in the country. Traditionally white- and pink-collar “inside” workers, Local 79 has a membership of 18,000, although various contingent, seasonal and part-time workers push its membership close to 24,000. Approximately 70 percent of Local 79’s members are women, with some 50 percent representative of historically racialized groups. Its sister union, Local 416, is primarily made up of blue-collar “outside” workers and has approximately 6,200 members. Together, they work in areas of public health and education, child and elder care, parks, recreation, water treatment, Emergency Medical Services, as well as housing and court services, road maintenance, by-law and safety enforcement, building inspection, animal rescue, waste collection and social services administration, just to name a few. Considering that Toronto has both the largest municipal government and largest municipal union in Canada, changes to Toronto’s public administration, services provisioning and labour-management relations may reveal trends in the broader public sector, as well as illustrate the forms of resistance and strengths as well as limitations of existing union capacities.
As a former municipal worker with the City of Toronto for nearly a decade, I was a member of cupe Local 79 during the ten-day work stoppage in 2000, the sixteen-day work stoppage in 2002 and a picket captain through the thirty-nine-day strike in 2009. I held many positions during my employment with Toronto Parks, Forestry and Recreation, including skating coordinator, pre-school and summer camp counselor and coordinator, seniors programmer, cooking instructor, fitness trainer, homework tutor, after-school caregiver and youth leadership development coordinator, as well as outreach and advocacy partner with community-based organizations. In this regard I have firsthand experience with an important segment of the services the City provides, not only as a worker and trade unionist, but also as a member of the community.
My connection to the City of Toronto is also a very personal one. I benefitted greatly from my local community centres in the borough of Rexdale — bedrock of “Ford Nation” (a reference to the predominantly suburban supporters of conservative Rob Ford). Rexdale is also one of the city’s “priority neighbourhoods” characterized by low incomes and high levels of workplace precarity, migration and health insecurity. Although concrete memories are now few and far between, my first experience as a user of the city’s services came at the tender age of four when I was enrolled in a daycare program at Thistletown Community Centre. Over the years I would go on to spend many evenings and whole summers participating in swimming lessons at the Elms Community Centre, hockey at Albion Arena and Sunnydale Acres Rink, basketball at Kingsview Village Community Centre, soccer at Summerlea Park, bocce with my grandfather at Gord and Irene Risk Community Centre, as well as woodworking, cooking and arts and crafts programming at Thistletown, to name just a few examples. Through these experiences a sense of friendship and community developed as I went to school with many of the same participants, visited the mom and pop shops of the neighbourhood, occasionally got to meet city councillors and school board trustees, and went to community events and festivals. By the age of fourteen I had become a volunteer and by sixteen was working in many of the community centres mentioned above. Thanks initially to the availability of public transit and later to parents who were brave enough to let their son borrow their vehicle, I was even able to work at other community centres throughout the city such as Islington and Glen Long Community Centres, Edenbridge Seniors Centre and many other seasonal locations. With all this in mind, I have a deep sense of gratitude for the public services and employment I was able to rely on, as well as profound concern as many of the opportunities that I benefitted from are steadily being eroded for others. Unaware to me at the time, I was being exposed to just a small fraction of the services cities provide: everything from pre-school to seniors’ programming, language instruction, healthcare support services, public transit, parks and road maintenance, waste disposal, police, fire and emergency medical services, urban planning, environmental initiatives and so on. This book, then, is as much a recognition of the community relationships and city services that impacted me as it is a scholarly contribution exploring the public institutions and governance arrangements, trade union rights and freedoms and public services that are threatened by elite-driven austerity measures and government policies that imperil urban life.
This book is grounded in a critical political economy approach that is informed by existing scholarly works, participant observation, data analysis of municipal budgets, Statistics Canada, labour and community reports, interviews and picket line conversations, as well as interactions with the users of public services and community members. This allowed me to carefully detail the social interactions and methods used by workers as they struggled to understand and respond to demands for concessions. At the heart of this book is a refutation of the City of Toronto’s fiscal crisis: I counter the argument that the City’s financial challenges stem from overgenerous wages or abuse from the users of public services. Rather, I begin with the spreading of urban neoliberalism across Ontario, and the City of Toronto in particular, demonstrating how the narrowly economistic rhetoric of fiscal crisis fails to consider the social, historical and politically motivated changes to intergovernmental financial transfers, labour-management relations and public services restructuring. The inability of Ontario municipalities to meet their revenue requirements stem not only from constitutional realities better suited to the nineteenth century than the urban realities of today, but especially from the neoliberal policies of tax cutting that have reduced fiscal capacities. In other words, the City of Toronto does not have a fiscal crisis, but a revenue crisis rooted in the constitutional constraints of municipal government and public policies of the neoliberal era.
As David Harvey (2009: 315–16) has argued: “From their inception, cities have arisen through geographical and social concentrations of a surplus product. Urbanization has always been, therefore, a class phenomenon, since surpluses are extracted from somewhere and from somebody, while the control over their disbursement typically lies in a few hands.” Pressures related to urbanization, then, extend beyond public administration and the management of urban-suburban development as these are rooted in the concrete forms of state and class power through which market-like rule is established. These pressures have undergone a swift intensification as what initially began as an unprecedented housing meltdown centred in the U.S. economy in the fall of 2007 quickly turned into a banking and financial market downturn, and later a global insolvency crisis through 2008. Due to the highly integrated nature of financial institutions and their exposure to toxic assets associated with the subprime housing market, including high levels of bank debt, what resulted over the course of 2007–08 was a series of forced bank mergers and quasi-nationalizations. These private sector bailouts by the public sector resulted in “troubled assets” being shifted onto the state sector or central banks, which also exposed other underlying problems such as financial malpractice and bank indebtedness, as well as longer-term issues related to overheated housing markets, credit-reliant consumption, stagnant real wages and wealth polarization. A worldwide credit crunch soon emerged as subprime mortgage-backed securities were discovered in the portfolios of banks and hedge funds around the world. The governments of the G8/G20 intervened with trillions in loans to guarantee inter-bank lending and the purchasing of government and commercial short-term loans (McNally 2011; Albo et al. 2010).
In an attempt to avoid a global depression, the governments of the G8/G20 met to coordinate the lowering of central bank-interest rates in order to stave off a feared turn to protectionism. Additional stimulative measures included temporary public works programs, particularly those related to infrastructure, as a means of injecting liquidity into the economy, and expanding consumption. Demonstrating their political affinity to neoliberalism, however, all G20 member governments agreed to further open their markets to capital, ensure credit availability and privatize public assets. Despite the most severe downturn since the Great Depression, public policy responses since the onset of the crisis have reinforced rather than undermined neoliberalism’s continuing ideological and policy dominance. In an unparalleled show of fiscal consolidation, policy responses have focused almost exclusively on deepening neoliberalism: service delivery restructuring, often in the form of contracting-out and public-private partnerships; further tax cuts, reducing social welfare provisions; seeking union concessions and worker layoffs; and increasing user fees backed by a massive privatization of public assets. In this regard, the toxic bank debt that triggered the crisis never went away, it was simply shifted onto governments, turning private debt into public debt. Thus the Great Recession provided a legitimating rationale for dismantling and privatizing public services and seeking worker, particularly union, concessions in what can otherwise be described as a period of permanent austerity. Although the 2008 economic uncertainty has amplified existing trends, it must also be considered over a much longer trajectory of municipal governance arrangements and pressures related to the specific socio-political and economic makeup of Toronto.
Surprisingly, however, there has been little written about the Great Recession’s urban and localized impacts, particularly in relation to labour struggles in the Canadian context. In conjunction with earlier eras of austerity and retrenchment federally and across the provinces, while the initial shock of the recession may have dissipated, it continues to have grave implications for the delivery and accessibility of social services, the working conditions of municipal employees and the social dimensions of urban and rural life more generally. Fears of a return to recession and lingering deficits continue to serve as a political pretext, justifying and intensifying the neoliberal reconfiguration of municipalities, in the process undermining free collective bargaining and increasing the scope of precarious work as a means of deceptive cost savings. This continues the assault against what vestiges remain of public services and quality employment that balances work-life conflicts and enhances community standards of living.
In his 1898 book, Toronto the Good: A Social Study, C.S. Clark (1898: 1–3) wrote of Toronto:
One of the finest cities on the continent in point of beauty, wealth and intelligence … In point of morality the people of Toronto compare … with any other city quite favourably, and if the dark side of life is to be seen here, one may also witness the best … To a certain extent the people are liberal in matters of opinion, and as a rule men do not seek to influence the opinions of others except so far as they are privileged to do so.
Some fifty years later, the Baltimore Afro-American (Low 1948) wrote of “no restrictive covenants, segregation is practically unknown.” Whereas Toronto was once much lauded for its inclusiveness and sense of social justice, today the moniker Toronto the Good is used disparagingly to reflect a less than genuine sentiment. Indeed, Toronto, like Ontario and Canada more broadly, is experiencing wealth and income inequality of unprecedented magnitudes in the context of persisting race- and gender-based labour market segmentation (pepso 2014; Access Alliance 2013; Tjepkema, Wilkins and Long 2014). Following long-term trends, Canadian cities are today more socially stratified than ever before (Myles, Picot and Piper 2000; Walks 2013). In Canada’s three largest cities the bottom 90 percent of income-earners made less in 2013 than they did in 1983. In Ontario, the richest 1 percent of wealthy individuals earned sixteen times more than the average Ontarian, while the wealthiest 1 percent of Torontonians earned twenty-three times the average Toronto resident. Youth unemployment in Toronto as of 2014 is in excess of 20 percent, while racialized youth, immigrants and women are at an even greater disadvantage (Root et al. 2014; Roy et al. 2014; Wellesley Institute 2014). It is in this context that Toronto municipal workers have been under pressure to forfeit concessions at the expense of market discipline.
Chapter 2 provides a brief overview of the making and remaking of municipal governance in Ontario over the post-war period. It begins with a theoretical analysis of neoliberalism at the urban and regional scale, drawing attention to workplace precarity in the context of intersecting axes of oppression (for example, race, class and gender). Toronto proper as it exists today is a product of the late 1990s. However, from 1954 to 1998 the municipality of metropolitan Toronto served as a senior regional level of government together with six lower-tier constituencies. Because municipalities were never regarded as sovereign political entities, this chapter briefly summarizes intergovernmental administration within the context of federal and provincial devolution. Over this period, municipalities became critical nodal points as territorial and institutional arrangements evolved within historically and locally specific contexts. As a result of decreasing transfers to municipalities, a number of government-initiated reports explored the expansion of local revenue-raising capacities at the local level. However, in the absence of extending new revenue tools, municipalities remained dependent on senior levels of administration. By the early 1990s, Ontario’s political economic climate had changed dramatically as the context of recession and austerity proved fatal to the provincial New Democratic government. This in part set the stage for the election of the Progressive Conservatives, which advanced the neoliberal agenda to new heights as regional governments, townships and cities were unilaterally amalgamated and restructured.
Chapter 3 begins with the hard-right shift of the Ontario political economy. Before the end of the decade, the Progressive Conservatives would enact ninety-nine different tax cuts, eroding more than $1 billion in transfers to Ontario municipalities and significantly increasing local fiscal pressures. When the Harris Government came into office there were 815 municipalities and 1,900 school board trustees. By the end of the Conservatives’ term, this number had been reduced to 447 municipalities and 700 school board trustees. This included a massive devolution of program spending and responsibilities onto municipalities without matching fiscal supports. Similar retrenchment was occurring federally over this period as the elimination of the Canada Assistance Plan, reductions to federal-provincial transfers and the unilateral devolution of social welfare responsibility not only cut and decentralized federal funding, but also eroded national enforcement standards. Despite some modest investments in municipal funding during the briefly Paul Martin-led federal government, both provincial and federal transfers to municipalities over this period remained ad hoc and uncoordinated. At the municipal scale, Toronto Mayor Mel Lastman (1998–2003) used the reduction in federal and provincial transfer funds to municipalities as a political rationale to increase workplace precarity amid attempts to privatize city services and assets. This set the stage for competitive austerity in Toronto: the quest to make labour more “flexible,” strengthen workplace discipline, reduce public services and enhance competitiveness in the “global city.”
Chapter 4 begins with an assessment of three new governing administrations: the Harper Conservatives federally, McGuinty Liberals provincially and Miller Administration at Toronto City Hall. Consistent with the long-term retreat of federal involvement in municipal issues, the federal Conservatives showed limited interest in moving beyond piecemeal injections of municipal funds, further devolving itself of municipal responsibility. In a similar vein, although the provincial Liberals took steps toward rectifying some of the significant cuts to municipal transfers undertaken throughout the Harris era, re-engagement still failed to counteract some three decades of declining investments. Instead of addressing the structural deficit at the root of Ontario municipalities’ fiscal woes, the Liberals continued the aggressive austerity initiatives that had been a hallmark of the Harris government.
During what would become the longest strike of the post-amalgamation era in Toronto, rather than depart from the neoliberal project of the Lastman era, Mayor David Miller (2003–2010) essentially conceded to the neoliberal agenda using the 2008 global economic downturn to justify concessionary demands, pitting the availability of municipal services upon wage restraint by city workers. Given the strategic location of Toronto as the centre of financial capital in Canada and home to Canada’s largest municipal union, the 2009 round of bargaining served as a litmus test or blueprint of sorts as the state sought to privatize public services at the behest of capital. Although the 2009 civic workers’ strike managed to achieve some minor increases in economic compensation, it was a significant political failure in its inability to draw connections between the attacks against public services and workers to tax shifting for competitiveness and chronic underfunding. Few connections were made between the defence of public sector workers and services and their relationship to the users of those services. These concerns could have been framed as a clear political message arguing in favour of decent working conditions for all. Moreover, Local 79 was unprepared to respond to the City’s demands for concessions along with limited community support and solidarity
While some of Local 79’s weaknesses stem from organizational failings, they are also related to larger questions of rank-and-file engagement in relation to executive-led mandates, as well as Toronto’s historically fragmented labour and community movements. Little was done to facilitate membership educational initiatives, build independent organizational capacities or foster a sense of collective unity. In the absence of an oppositional political program, Local 79 and its sister union, Local 416, were incapable of countering the drumbeats of austerity and retrenchment. As such, the 2009 strike was both a leadership and an organizational failure. It also formed part of the backdrop leading to the election of a conservative mayor, Rob Ford (2010–2014), and a council that vowed to strip the city’s unions of their benefits, privatize services and assets and increase worker discipline. Despite the significance of 2009, Local 79 was unprepared for future negotiations.
Chapter 5 departs from this context. As austerity measures continued federally and provincially, the Ford administration at Toronto City Hall redoubled its efforts to privatize public services and extract wage and benefit concessions. Unlike the 2009 round of bargaining that ended in debacle for both Locals 79 and 416 and the City, the 2012 round of collective bargaining did not result in a strike. It did, however, result in a catalogue of concessions, including the strengthening of managerial prerogatives over shifts and scheduling, the removal of protections against technological displacement and contracting-out, and the elimination of health, dental and post-retirement benefits. Although variegated, the shared political agenda from Lastman to Miller and Ford shows that, once in power, each of these administrations sought to further discipline workers to the imperatives of capital amidst a hardening of neoliberalism and the state. This suggests that if unions are to reappear as a movement and not simply hang on as a relic of the past, they will need to move beyond the limited defence of their own members’ interests and to those of labour and community activists as a whole.
With this in mind, Chapter 6 starts with the premise that a new municipal and regional agenda infused with social justice values is necessary. In order to implement such a program, it is necessary to overcome the prevailing myth of fiscal crisis. Alternative approaches to public policy must be rooted in alternative political visions that challenge the continued reliance on tax cuts as a cure for nearly all of society’s social ills and municipal governance that rejects the market-based remaking of urban life. This will require both new federal and provincial investments in municipalities, as well as new local revenue-raising capacities and governance powers. The current municipal reliance on property taxes as the major source of revenue is unsustainable in the long run and merely shifts the burden of social and physical infrastructure away from capital and onto labour, as well as onto future generations.
Of course, geography matters, so conferring new powers to municipal councils still requires forming new urban planning arrangements with other levels of government and community actors. Local governance, it seems, is at a standstill, caught between the dead-end of neoliberal urbanism and struggles to envision a local political economy rooted in workplace democracy and social justice. In this sense, the old is dying as the new struggles to be born. But how to advance such a political program?
It is not, of course, just a matter of more union density but a question of reinvention and overcoming the limits of sectionalism. Unions in any form are alone capable of resisting the coordinated push for austerity and hardening of neoliberalism. Doing so requires having feet both inside and outside the trade union movement rooted in an organizational form explicitly intent on creating a broader working-class movement across its many cleavages. This requires working to build the capacities of the entire union to fight back against concessionary demands, developing a movement inside the union that pushes for enhanced democratic participation and control, a radically feminist, anti-racist, class struggle-oriented politics that engages with the struggles of the broader community, and educational efforts intent on building a cadre of workers and activists that embodies both intellectual understanding and engagement. In other words, there needs to be a class-infused alternative — left of social democracy — that is critical of neoliberal capitalism and informed by socialist and other radical ideas and values. In light of mounting demands for concessions, it is becoming increasingly clear that unions and oppressed persons generally can no longer, if they ever could, put their faith in the courts, laws or governments to enforce what vestiges remain of the post-war class compromise. For some three decades, labour and community activists have been unable to stop, let alone reverse, the progressive dismantlement of social programs and public services amidst an increasingly militant and recalcitrant state and capitalist class offensive. The attacks against the collective bargaining rights of municipal workers, then, should unmistakably be understood as acts of class war. The initiatives undertaken by civic workers in future rounds of bargaining will determine to what extent the union is able to withstand demands for concessions, what new forms of grassroots and community involvement will look like and in what sense rank-and-file workers will press for greater accountability and involvement. If the offensive is to be fundamentally countered, a revived working-class politics must rekindle the struggle for realizing an alternative vision of sub/urban and rural life rooted in enhancing democratic capacities and social inclusion.
This book is intended for scholars and researchers concerned with new theoretical and empirical contributions to urban public policy, labour-management relations, the legal and constitutional contexts of city governments relative to other levels of government and the policy instruments used to address budget challenges. It is also written for undergraduate and graduate students in sociology, labour studies, politics, urban and regional studies and geography, as well as policymakers, think-tank, labour and community researchers interested in federal and provincial policy at the municipal sphere, collective bargaining, social services restructuring and attempts to fashion a different kind of city.