Chapter Three

Merger Mania and the Making of the Megacity, 1995–2005

The election of the Mike Harris Conservatives in 1995 signified the hard right pursuit of neoliberal policies in Ontario. The Conservative government brought down two statements in 1995: the Fiscal Overview and Spending Cuts and Fiscal and Economic Statement, which represented a radical turn to “slash and burn” neoliberalism. The measures were wide ranging in their impacts across Ontario municipalities. Among the first pieces of legislation rescinded by the Harris government was the Planning Reform Act, which sought to curb urban sprawl by linking municipal requirements to provincial planning applications, zoning by-laws and other planning-related measures. The catalogue of other measures negatively impacting the fiscal capacity and service provision of municipalities undertaken by the Harris government is lengthy. This includes a moratorium on the development of non-profit housing and cooperatives; suspension of $234 million worth of spending on public transportation, road and highway maintenance; elimination of recycling funds and environmental grants to municipalities totaling $24 million; $290 million in funding cuts to the Ontario Municipal Support Program; over $12 million in cuts to public libraries; cancellation of the conversion of private-sector childcare spaces into non-profit spaces; and reduction in transfers to school boards by $400 million (Government of Ontario 1995a, 1995b). By 1999, the Conservatives had made over ninety-nine different tax cuts (Government of Ontario 1999), significantly eroding public revenues and aggravating the revenue crisis across municipalities.

Amalgamation and the Devolution Revolution

In 1996, the Greater Toronto Area Task Force recommended merging five upper-tier governments into a single-tier Greater Toronto regional body that would be responsible for land-use and transit planning, economic development, infrastructure and highways. Lower-tier municipalities would see their powers and responsibilities strengthened to meet more locally specific needs. The Task Force reintegrated the need to treat the Greater Toronto region as a whole, integrating both long-term planning and infrastructure costs as well local services provisioning (gta Task Force 1996).

Table 1 Municipal Share of Local Services Realignment (lsr) as a Percentage of Funding Responsibility for Ontario Municipalities, 1998

Service	Pre-lsr	Post-lsr
Social Assistance	20%	20%
Administration	50%	50%
Ontario Disability Support Program (odsp)	0%	20%
Childcare Services	0%	20%
odsp & Childcare Administration	0%	50%
Ontario Drug Benefit	0%	50%
Public Health*	25%	50%
Land Ambulance**	0%	100%
Social Housing	0%	100%
Municipal Transit Costs***	67%	100%
Property Assessment	0%	100%
Sewer and Water	90%	100%
Policing	90%	100%
Farm & Conservation Lands Tax Rebates	0%	100%
Children’s Aid Societies	20%	0%

 

* Public health costs returned to pre-lsr share in 2007

** Land ambulance funding share shifted to 50-50% in 1999

*** GO Transit completely devolved to municipalities, but reassumed by Province in 2002

Source: Côté and Fenn 2014

 

That same year, a fourth inquiry in less than a decade examining provincial–municipal administration and spending arrangements was launched. The Who Does What Panel, chaired by John Sewell, recommended enhanced local coordination of regional activities, while the Province take over administration and funding responsibility for public health and long-term care as well as welfare, childcare, employment and disability supports. The panel’s report recommended the creation of a Greater Toronto Services Board (GTSB), eliminating five upper-tier governments and amalgamating smaller municipalities with larger cities, although the panel was divided over whether the six municipalities of Metropolitan Toronto should be merged into one city or divided into four.

In the end, the provincial Conservatives ignored the reports, beginning their own series of controversial municipal amalgamations that permanently reconfigured the urban and regional political economy of the province. The Harris Conservatives also intervened in the public education system, leading to one of the most violent labour confrontations in Ontario history, and reorganized school boards, eroding both residential and business property taxes, weakening trustee authority and assuming greater control over education policy. The Community Reinvestment Fund was created to support local fiscal capacities, although many municipalities still saw increased use of own-source revenues (Sancton 2000). Local Services Realignment — that is, the devolution or downloading of public services onto municipalities — resulted in urban and regional governments assuming partial or full funding responsibility for social housing, childcare, seniors’ drug benefits, disability support payments, transit, public health, ambulance, fire, police and property assessments.

When Harris came into office there were 815 municipalities in Ontario. The Fewer Municipal Politicians Act of 1996 reduced that number to 447 by 2001. At the same time, the number of municipal councillors was reduced from 4,586 to 2,804, while the number of school board trustees fell from 1,900 to 700 (Sancton 2000; Boudreau, Keil and Young 2009). As of 2013 Ontario had 444 municipalities of varying structures (Found 2012; Slack and Bird 2013).

The largest and most extensive amalgamation occurred under the provisions of the 1997 City of Toronto Act where six cities and seven governments were merged, creating the new single-tier City of Toronto — one of the world’s few megacities created specifically for neoliberal purposes (Carson and Siemiatycki 2014; Kozolanka 2007). For Keil (1998), the amalgamation of the City of Toronto was an ill-conceived “solution” by the provincial Conservatives to strengthen their suburban base at the expense of the urban core. Restructuring of Ontario municipalities involved a massive devolution of program spending and responsibilities onto municipalities, including social services, public school services, non-profit housing, roads, public infrastructure, long-term healthcare, childcare, shelters, children’s aid societies, ambulance, fire and police services and waste collection, as well as public health and transportation. Like related devolutionary measures from federal to provincial governments, downloaded responsibilities onto municipalities by the Harris government occurred without an equivalent transfer of funding or matching fiscal supports for the new responsibilities. Amalgamation was overwhelmingly rejected by urban social movements, trade unionists, municipal politicians and the general public across Ontario because it was seen as homogenizing local specificity and being less locally responsive than the structure it was replacing (Boudreau 2000; Kipfer 1998). But this did little to deter the Conservatives from amalgamating communities. The Conservatives argued that amalgamation was in the interest of all Ontarians. The political promise was that it would lower costs, remove barriers to investment, enable private sector job creation and increase the political coherence and economic efficiency of municipalities, particularly of “global cities” like Toronto.

Table 2 Municipal Structure in Ontario, 2013

Type of Tier	Number of Municipalities
Single Tiers
Southern Ontario	29
Northern Ontario	144
Total Single Tiers	173
Lower Tiers
Within a Region	43
Within a County	198
Total Lower Tiers	241
Upper Tiers
Region	8
County	22
Total Upper Tiers	30
Total Number of Municipalities	444

 

The Conservatives argued, as a now thoroughly discredited report by the accounting firm kpmg alleged at the time, that Toronto could realize through amalgamation upwards of $865 million in savings over the first three years (kpmg 1996). But this was later contradicted by a report from Deloitte and Touche (1997) that criticized kpmg’s flawed report and showed that savings would be next to nothing. In fact, just one year into amalgamation, Toronto found itself short of $164 million in tax revenues as a result of downloading, making a mockery of Harris’s (and kpmg’s) projected cost-savings.

The municipalities of Ottawa, Hamilton, Sudbury, Kingston and Chatham-Kent were also amalgamated as part of the 2001 Municipal Act, which consolidated dozens of municipal statutes and entrenched neoliberal administrative reforms. In what was to become a recurring saga, rather than address the structural deficit of Ontario municipalities, the provincial government proceeded to provide one-time fiscal injections and short-term loans. As a result of this structurally created shortfall (downloading and the erosion of public revenue through tax cuts), Ontario municipalities have sought to deal with these fiscal challenges by seeking concessions from workers, contracting-out, privatization and raising user fees. By 2003 the so-called Progressive Conservatives had eliminated more than $650 million from municipal transfers.

The movement away from shared-cost provincial–municipal funding shifted the onus of revenue generation from provincial income and corporate tax revenues to the narrower, less responsive and progressive base of municipal property taxes. Amalgamation of cities did little to reduce the costs of public administration; rather it led to wide-ranging cuts to social services provisioning, demands for concessions from labour and a structural deficit at the municipal level. The Conservative tenure at Queen’s Park from 1995 to 2003 radically extended neoliberal policies into the overall architecture of public administration and services provisioning (Sancton 2000; Boudreau 2000). For municipalities, territorial boundaries were remade and responsibility for delivering services increased despite the absence of an equivalent transfer of governance autonomy or administrative powers to raise revenues.

Similar retrenchment was occurring at the federal scale during this period. The 1995 federal budget terminated the Canada Assistance Plan and Established Programs Financing, replacing them with a block fund called the Canada Health and Social Transfer (chst). The chst represented a significant reduction of provincial transfers for social assistance, post-secondary education and healthcare funding. The new block funding removed the previous 50/50 cost-sharing arrangement and replaced it with a combination of cash and tax point transfers that were frozen at the 1995 level for the next five years, significantly eroding the real level of funding due to inflation and population growth. This unilateral devolution of social welfare responsibility not only cut and decentralized federal funding, it also led to an erosion of national enforcement standards and a reduction in the quality and scope of public services, along with a consequent downloading onto provincial, metropolitan and regional governments.

Alongside the cuts to transfers, the federal Liberals launched a series of uncoordinated programs targeted at urban issues. One was the 1998 Urban Aboriginal Strategy, which provided $25 million over three years to cities in order to build organizational capacities within urban Aboriginal communities and develop partnerships with provincial and municipal governments. The fund also sought to coordinate federal government resources with provincial and municipal departments in order to address the disparity between urban Aboriginal and non-Aboriginal groups (aandc 2005). A year later, the federal government launched the National Homelessness Initiative as a way of channelling funds to municipalities in order to deal with poverty across the provinces and territories. In 2000, the Infrastructure Canada Program was launched, distributing $2 billion over the next decade for local infrastructure projects, as was the Green Municipal Fund, which was to be managed by the Federation of Canadian Municipalities. This provided $125 million for local environmental initiatives. In 2001, the Green Municipal Fund was doubled and an additional $680 million was allocated to cities under the Affordable Housing Program. Another $2 billion was directed to municipalities in the form of the Canadian Strategic Infrastructure Fund, along with $600 million for the Border Infrastructure Fund.

A year later, the federal government combined various infrastructure and grant programs under Infrastructure Canada, which included a notional effort to fund a New Deal for Cities and Communities (Bradford 2007). The intent was to address both municipal fiscal pressures, particularly those related to infrastructure, as well as public policy concerns. The 2004 and 2005 federal budgets included a full goods and services tax rebate (worth some $7 billion over ten years), five cents per litre of the federal gas tax allocated on a per capita basis (worth approximately $9 billion over five years) and $800 million for public transit distributed on the basis of transit ridership, which recognized the particular needs of large cities. In addition to new municipal revenue transfers, new intergovernmental consultative bodies were created, which brought together urban development experts and community groups. Federal–municipal re-engagement, however, proved short lived.

Toronto: Setting the Stage for Competitive Austerity

In Toronto, while the three decades following WWII emphasized the retooling of war-time industries and large-scale infrastructure investments, the period since then can be understood as a continuous process of internationalizing the local economy through competitive austerity. Greg Albo (1994) defines competitive austerity as making labour more flexible, enhancing managerial prerogatives, reducing government services that act as a drain on competition, shedding public assets and weakening labour laws and employment standards, aiming to turn the state into a series of internally competitive markets. As a result of both external and local pressures, economic development in the city moved away from manufacturing and goods-producing sectors toward a neoliberal model premised on exporting services related to finance, insurance and real estate. The effort to create a different kind of local state was part of a broader strategy of enhancing competitiveness within the city and vis-à-vis other territories (Lemon 1985; Todd 1998; Caulfield 1994).

As the centre of financial capital in Canada, Toronto is headquarters to six of Canada’s largest insurers and Canada’s five largest banks, and is the nation’s largest employment centre, responsible for one-sixth of all Canadian jobs. More than 300,000 workers are concentrated in the financial services industry, which is expected to overtake London as a hub for financial services by 2020 (Heinrich 2012). Indeed, a Toronto Life (Livesey 2012: 70) article boasted that one-third of the city’s lawyers and accountants work for the financial sector in some form. Uncritically advocating for a finance-led future, Toronto Life went on to argue: “In the new economy, Ontario doesn’t make stuff anymore. We let other places do that; our new job is to lend, invest, and manage people’s money.” Since 2000, financial sector stocks have had a 5.7 percent higher annual return than non-financial stocks. Today the financial sector controls an estimated 20 to 30 percent of the capitalization on the Toronto Stock exchange, growing at twice the rate of the rest of the economy and almost doubling since the 1980s. As a result, the financial industry is now nearing 8 percent of the total share of the economy — similar to the share of the U.S. financial sector right before it crashed (Sanger 2011b).

Federal deregulatory changes enacted in 1987 that allowed chartered banks to buy and own brokerage firms, something that they had previously been forbidden to do, furthered efforts to attract increasingly mobile global capital investment. Banks increasingly sought to solidify their power through new mergers, acquisitions, speculative investments and share buybacks. In 2010, bonuses paid to Canada’s six largest banks reached a record $8.9 billion before setting a new all-time high in 2011 with $9.5 billion. Seemingly immune to the recessionary pressures of governments, corporate directors’ compensation jumped 33 percent between 2008 and 2010 (Livesey 2012: 19). The city has a significant contingent of producer and media services, as well as a whole range of low-wage service and hospitality industries, especially professional services tied to housing-related demand for credit, renovations and legal services. Like other “global cities,” this has made Toronto highly dependent upon the internationalization of capital — both to the world market and the rest of Canada (Sassen 2005). While taxation, financial transfers, intergovernmental jurisdictions and Toronto’s unique position in the global political economy have undergone major changes, Toronto’s labour market also underwent significant demographic shifts. In the 1960s manufacturing accounted for roughly 30 percent of the city’s labour force, but by 2007 this had fallen to less than 15 percent. And since 2002, nearly one in five jobs in manufacturing have disappeared. In its place has arisen one of Toronto’s largest segments of the labour force: employment related to the burgeoning financial, insurance and real estate industries.

Since the 1980s both the federal and provincial governments, when faced with their own budgetary dilemmas, sought to “solve” their revenue shortfalls by eliminating social programs, seeking concessions from their workforces and downloading responsibility without power onto other tiers of government. From Prime Ministers Mulroney and Chretien, who drastically reduced transfer payments to the provinces, to Ontario Premiers Rae and Harris, who froze public sector wages and unilaterally amalgamated cities thereby devolving funding responsibilities without matching fiscal supports, urban and regional governments have long been subject to “top down” neoliberalism, while remaining active embodiments in their own right (Friskin 1993; Kipfer and Petrunia 2009). In the run-up to amalgamation, commentators increasingly drew attention to two divergent paths to urbanization, illustrated by the neighbouring cities of “old” downtown Toronto and North York. Old Toronto sought to deal with growth pressures by increasing density requirements, expanding public transit and using the property tax base to fund a range of social services. North York, on the other hand, where fiscal conservatism ruled, was characterized by automobile-dependent urban sprawl and the provision of services through the private market. Increasingly, Old Toronto came to represent the decaying Keynesian order, while North York embodied municipalities’ neoliberal future.

Neoliberalism tied its agenda to a re-engineering of the local state, but refused to transfer administrative and fiscal powers, which in the process intensified inter-local competition between Toronto and its surrounding municipalities (in effect exacerbating pre-existing disparities in wealth and income and also creating them anew). Moreover, because Toronto was envisaged as the strategic terrain through which Ontario and Canada were linked to the global economy, neoliberal reforms sought to give the local government and businesses the “flexibility” to promote Toronto as a competitive “global city” (Kipfer and Keil 2002; Keil 1998, 2002). The 1998 mayoral election pitted the Old Toronto and North York versions of urban governance against each other with the latter model emerging as the blueprint for future developments. For Todd (1998), the institutional and administrative redesign of local government, embodied by the electoral victory of Mel Lastman as mayor of Toronto in 1998 (he had served as mayor of North York for nearly a quarter century), represented the victory of a neoliberalized urban political regime more than twenty-five years in the making.

As a “stand in” for the provincial Conservatives, the megacity’s first mayor promised to freeze property taxes for ten years, bring down civic workers’ pay and privatize city services and assets (Boudreau et al. 2009). This was done in the context of overlapping pay scales among civic workers, planning frameworks, rates of taxation, breadth of services provided and assets held by the six former local governments that now comprised the new single-tier City of Toronto. Mayor Lastman and City Council’s policies immediately made themselves felt on municipal workers as demands for workplace concessions become the new norm.

Early Confrontations: In the Shadow of Third Way Urbanism

In an attempt to remake the local state in the image of its provincial Conservative counterpart, Mayor Lastman and Council attempted to deal with Toronto’s fiscal challenges by implementing its own set of “slash and burn” policies. These revolved around extracting concessions from workers and freeing up new profit-making opportunities in public services for private corporations. The equalization of wages was also a central issue, as there remained a range of pay scales across the city’s former municipalities. Local 79 sought to match wage scales with the old City of Toronto contract, while the City sought to harmonize them downwards with the former City of Etobicoke, where some workers had not seen a wage increase since 1989 (Ray 2000). Local 79 negotiators proposed to the City that the issues of harmonization, job security, benefits and seniority rights be decided by a provincial arbitrator, but the City refused to do so unless it could first define how the 2,800 different jobs at City Hall would be classified. The result was a ten-day strike in 2000 by eighteen thousand cupe Local 79 workers over the City’s attempts to lower wages and weaken job security provisions. The strike was the first by Local 79 in the newly amalgamated City of Toronto and took place within the backdrop of mounting labour-capital conflicts in the province amid a strengthening of anti-worker legislation by the Mike Harris Conservatives. The then-largest city strike in Canadian history ended ten days later in a stalemate of sorts as a three-year agreement saw the issue of wage harmonization unresolved, although civic workers did receive a 2 percent increase in 1999, 2.17 percent in 2000 and 3.2 percent in 2001, along with a lump sum payment of $400. But this was just the beginning of labour–management conflicts in a new era of amalgamation.

In 2002, cupe Local 79 once again struck over renewed efforts to contract-out, lower wages and remove job security protections. However, this time Local 79 was joined by the 5,500-member cupe Local 416. Mayor Mel Lastman spoke of city workers “holding the city hostage” in their quest for “jobs for life” (cbc 2000). He vowed to bring municipal wages across Toronto’s districts in line with the lower pay scales of Etobicoke, in addition to outsourcing waste collection and increasing the use of seasonal and temporary employment. Sixteen days into the strike, with over one million visitors expected for World Youth Day and a visit by the Pope, Conservative Premier Ernie Eves (who had become premier upon Harris stepping down) legislated strikers back to work. In seeking to move the strike from the streets and into the courtrooms, the provincial Conservatives, with the support of Lastman and City Council, removed the right to strike using the rationale that the economic benefits of World Youth Day and the Pope’s visit outweighed workers’ right to strike. After four months, the provincial conciliator assigned to the labour dispute ruled in a way that limited rollbacks of job security and workplace provisions. The new three-year agreement saw 3 percent increases in each year of the contract, and 5 percent for paramedics. The issue of wage harmonization across the city’s districts, however, remained unresolved as the conciliator requested more time. It would stay unresolved for nearly a decade longer.

After the 2002 strike, activist union members in Local 79 raised the need to be prepared well in advance of a possible strike in terms of planning coordination, mobilization and trying to develop new strategies to garner public support. This included suggestions for political and workplace education in order to mobilize more and new members, efforts to create tighter bonds with community organizations and initiatives to build confidence within the rank and file to take on managerial orders. Illustrative of the complex social interactions among union members following the strike, some were openly critical of Local 79’s leadership, while others were more hesitant for fear of weakening solidarity or out of the hope that they could change the leadership’s policy from within. However, despite occasionally raising these concerns at membership meetings, there were few sustained efforts to regenerate union involvement or to democratize the union and prepare for a future strike.

After three decades as Mayor, first of North York and later the new megacity, Mel Lastman indicated that he would not be running for re-election. As a former New Democratic Party candidate, mayoral contender David Miller had forged close alliances with many labour and community activists and sought to present himself as the “progressive” alternative, implicitly rejecting the singular business-driven, neoliberal model of development at all costs. In late 2003, David Miller was elected mayor. Mayor Miller and his executive came from the “progressive wing” of Council — a loose alliance between social democrats, Liberals and a few independents. The electoral basis for this “Third Way” coalition had drawn extensive backing from public sector unions, the Toronto and York Region Labour Council and progressive urban social movements. While in power Miller governed with the support of these movements in a kind of informal cooperation. As the 2005 round of collective bargaining approached, city officials noted that the Province had signalled its preference for wage settlements of around 2 percent. They also noted that federal settlements with its unionized public sector workers averaged annual increments of between 2.25 and 2.5 percent over three to four years. It initially looked as though a repeat of 2000 and 2002 was on order when the City refused to allow cupe to deliver some services that had been previously outsourced. After 103 days of negotiations with Local 416 a second strike deadline of June 22 was averted at the eleventh hour with a promise to allow its workers to deliver some of those services. The agreement was essentially rolled over to Local 79 and the City, who managed to come to an agreement without the threat of a strike. Wage settlements saw increases of 2.75 percent in 2005, 3 percent in 2006 and 3.25 percent in 2007 and 2008. Mayor Miller and Council’s progressive city alternative had largely been defined by notions of building Toronto as a “green economy,” a “creative city,” a “diverse city” and one with “living wages” (Desfor et al. 2006; Kipfer 2007; Kipfer and Petrunia 2009). These notions, while having some merits, also demonstrated profound political limitations. Notably, none of them really got at the urban revenue crisis that Toronto and other municipalities faced in light of decade after decade of underfunding.

As noted by Cote and Fenn (2014), outside of provincial and federal transfers, Ontario municipalities derive some 62 percent of their own-source revenue from property taxes and from this they must provide for their public utilities, public works, parks and recreational facilities, waste management, transit services, public housing and other services. Transfers from other governments as a whole represent some 20 percent of local government revenues, which go towards covering the costs of benefit programs administered locally. Social assistance comprises over 40 percent of such operating transfers alone. Hence, a majority of provincial transfers are conditional, meaning they must go toward expenditures mandated by the donor government. By 2011, they represented 94 percent of transfers to municipalities. This differs from conditional grants, which are matching grants that require equal contribution from recipient governments. Ontario municipalities’ singular dependence on property taxes is problematic for a number of reasons. First, unlike income taxes, which are withheld at the source, and sales taxes, which are paid in small amounts with each purchase, property taxes generally have to be paid directly in the form of periodic lump sum payments; hence they are a very visible tax. Because the ability to make these payments requires advanced savings or increases in debt, the saliency of property taxes disproportionately impacts low-income households and seniors, many of whom may be asset rich but income poor. Second, unlike income, corporate and sales taxes, property taxes do not grow with the economy. This inelasticity results in an improvised and politically driven process whereby annual increases are usually necessary in order to maintain the existing property tax base.

The political and economic limitations of Miller’s progressivism soon became evident in the subsequent round of bargaining as the twin perils of already-existing fiscal constraint and economic recession coincided. In order to meet its fiscal challenges — challenges generated by neoliberal policies and successive rounds of downloading from federal and provincial governments — City Council looked to extract wage and benefit concessions from its unionized workforce using the rationale that Toronto’s budgetary challenges arise from overgenerous public services and civic workers’ compensation. What made the 2009 round of collective bargaining between the City of Toronto and cupe Local 79 (and 416) workers so intense was that Toronto’s so-called “fiscal crisis” had merged with unprecedented national and provincial deficits (themselves the result of successive decades of tax cuts and revenue generation erosion).

How these structural fiscal problems have been addressed by the City of Toronto, with similar attempts in municipalities elsewhere, underlies an ongoing municipal services and infrastructure investment deficit. Other levels of government have partly recognized the urban fiscal impasse but have done very little to address it in a structural way. This is in spite of the fact that, since amalgamation but particularly in periods of “economic crisis,” local spending pressures increase as the demand for public amenities rises as a result of people being unable to access “market-determined” services, in addition to marked periods of poverty, food and housing insecurity. In other words, demands for local services are growing because of the social dislocations of neoliberalism, population growth and the need for greater revenue capacities to meet those needs. And yet, mainstream public policy responses seek to further individualize social services responsibility by extending forms of marketization as part of sweeping “cost-containment” measures.

Second, corresponding city councils have, on the one hand, expanded user fees and consumption-based taxes on residents while, on the other hand, shifting away from commercial property taxes, undervaluing business land assessments and providing grants and financial incentives for major developers and large corporations. Although the City of Toronto Act, 2006, extended some revenue powers to the City, the expanded powers under the Act have not been fully utilized. In 2007, the City published estimates for a range of revenue tools that were newly available, including billboard taxes, vehicle registration taxes, land transfer taxes, sales taxes on alcoholic beverages, tobacco and entertainment, parking taxes, road tolls and congestion fees. It was estimated that these new measures could bring in as much as $750 million annually (City of Toronto 2007). Mayor David Miller and his council utilized two of these in the form of the Municipal Land Transfer Tax and the Personal Vehicle Ownership Tax. At the same time, however, city councillors also “approved generous property tax breaks to attract high-paying, knowledge-economy jobs to strategic areas of the city, although the business community is already urging the city to further sweeten the pot” (Hanes 2008; Inside Toronto 2008). These incentives include “Brownfield remediation” (city subsidies, tax incentives and/or deferrals for major capital investments in properties requiring environmental clean-ups or in underdeveloped areas of the city), as well as Tax Increment Equivalent Grants (tiegs) that include payments in lieu of taxes and subsidies/rebates for commercial developers. tiegs are a form of publically funded tax incentives equal to all or a portion of the municipal property tax increase (increment) following the completion of a project that has resulted in an increase in the assessed value of a property. As the “progressive coalition” at City Hall insisted on wage concessions from its workers amid reductions to services, one of the few exceptions in speaking out against service-level and staff cuts had been radical sections of the anti-poverty movement (Clarke 2008; Bradford 2007). And for good reason: the poor have seen a continued deterioration of urban services and marked increases in unmet healthcare needs, shelter and food bank usage from Mayor Lastman to Mayor Miller, despite new incentives for business-related development. Those hardest hit include women, Indigenous peoples, immigrants, historically racialized communities and persons with disabilities (Stapleton et al. 2012; cspct 2009).

Third, there remain pressures to increase the contracting-out of city services and employment and the privatization of some capital assets as a means of temporarily relieving structural budgetary deficits. City Council and administrators continue to discuss, and the Toronto Board of Trade and other business associations continue to lobby for, privatizing Toronto Hydro and the Toronto Parking Authority, which together have earned the City more than $2 billion since amalgamation (Dale 2011c). This includes additional attempts to outsource waste collection, childcare, recreation and other services, as well as privatizing Regent Park, Toronto’s most well-known public housing project (Kipfer and Petrunia 2009). But the actual evidence regarding contracting-out and privatization suggests that the privatization of public-sector jobs, and the experiences of private-sector building projects on urban transport and infrastructure projects, has correlated with more expensive and less efficient goods and services, reduced public oversight and a lower quality of services provisioning (Loxley 2010). A major report undertaken by the Ontario auditor-general (2014), Bonnie Lysyk, found that of the seventy-four completed public-private partnership projects between 2003 and 2014, Ontario could have saved up to $8 billion through traditional public procurement. The report also went on to criticize the provincial Liberals’ continuing practice of “high risk” loans, particularly the $308 million loan to the research incubator Medical and Related Sciences as part of a failed real estate deal. The report also chided the government for not acting on recommendations left over from the Walkerton water tragedy, weak childcare oversight and lack of services for people with developmental disabilities. Citing a lack of empirical data to substantiate the provincial government’s assumption that public-private partnerships are preferable to publically procured and developed projects, Lysyk found that private partnerships are more expensive because companies pay about fourteen times what the government does for financing and receive a premium from taxpayers in exchange for taking on the project. This report parallels research undertaken by Siemiatycki and Farooqi (2012), which found twenty-eight public-private partnerships undertaken in Ontario between 2007 and 2010 to be 16 percent more expensive than traditional public procurement. While the sale of assets and contracting-out may provide one-time fiscal injections, they will not solve the underlying structural revenue crisis facing Ontario municipalities. Rather than generating cost savings, then, the empirical evidence suggests that public-private partnerships end up costing more money than had they been publically procured (tea 2011; Furlong 2007; Vining and Boardman 2008; Krawchencko and Stoney 2011; Sanger 2011).

Fourth, the City continues to seek wage freezes and concessions from its city workers with the idea that in reducing its direct wage bill the fiscal problems of Toronto could be eased. Yet Toronto’s fiscal challenges do not reside with the wages of city workers. They emerge from the distributional and tax policies that the City has adopted, and particularly the failure of federal and provincial governments to properly fund social services while using ever more of municipal budgets to fund the policing and security apparatuses of the state, and the incessant campaigns at “branding” the city to subsidize business. As Jim Stanford, who sat as part of the City’s 2007 Independent Fiscal Review Panel, has argued, despite being well run at the operational level and comparatively efficient, Toronto’s fiscal challenges are a result of an ongoing structural deficit: “In reviewing financial data on the city’s compensation costs, our report debunked the stereotype that the city’s employees are ‘fat cats’ … average [annual] compensation for unionized workers (including overtime) was less than $40,000 in 2007” (Stanford 2008; City of Toronto 2008). There is scant evidence to suggest that the City’s fiscal challenges are tied to overgenerous social services or excessive public sector compensation. As will be discussed in the chapter that follows, the City of Toronto used the 2009 round of collective bargaining to make the case that continued public services were dependent on union wage restraint. This zero-sum rationale resulted in a contentious thirty-nine-day strike in 2009 by cupe Locals 79 and 416 as the City sought to shift the costs of the crisis onto the public sector by seeking wage and benefit concessions and reducing access to public services.