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Infrastructure funding in the Greater Toronto Area (GTA) has taken the form of a political melodrama, with newly elected politicians ripping up their predecessor’s transit plans, while multi-billion dollar decisions made in Ottawa or Queen’s Park force sudden changes in locally made plans.

Sidewalk Labs’ June 2019 proposal for a waterfront development includes terms like “optional upfront financing”. Sidewalk suggests that a revenue tool never yet seen in this part of the world, Tax Increment Financing (TIF), be used to raise money for transit and other needs – even though, if anyone was going to use TIF, it would have to be the City, since only the City has the power to tax (not Waterfront Toronto).

There are two things Torontonians ought to know about local finance. First, private financing (that is, letting a private corporation provide upfront financing for a project, at a high interest rate and with the principal debt passed on to future generations) is far more expensive than municipal borrowing. No corporation enjoys the high credit ratings historically enjoyed by Canadian municipalities. Indeed, Toronto has a significantly better credit rating than Ontario: AA or AA+ from Standard and Poor’s and Aa1 from Moody’s.

So, the City can issue municipal bonds (also called debentures) and find ready buyers, at a significantly lower interest rate than for private financing. The total City debt is quite low – around $4 billion, compared to something north of $350 billion for the province. Only 11 percent of Torontonians’ tax bill goes to service the debt, which is very good as governments go (have a look at the US government debt, if you want to feel superior).

If cities including Toronto issue bonds to finance transit, which would be the prudent method, they still need to ensure that 30 or 40 years from now, when the bonds mature, and when the real estate market may have finished its long boom, the revenue will be there to repay the debt. Which leads to the second point: the revenues needed to repay debts and keep the lights on.

The three main Canadian experts in municipal finance, Enid Slack, Richard Bird and Harry Kitchen, have said for years that municipalities in the GTA and cities all through Canada rely far too much on property tax for revenue. They are mainstream economists, not socialists, but have long argued for municipal user fees and new taxes, such as a sales tax, taxes on hotel stays and fuel taxes.

The main new user fees that other large cities have implemented are road tolls and congestion charges – user fees with the desirable side-effect of reducing congestion and pollution. Even John Tory came around, once, to supporting some road tolls; the Wynne government, in a desperate electoral ploy, refused permission. Now, one would think Doug Ford (whose own government’s credit rating is in trouble) might perhaps support this as a measure toward municipal financial autonomy. (Even if he insists on stickers telling people it’s city hall that’s collecting the tolls).

The expert papers on the website of the University of Toronto’s Institute for Municipal Finance and Governance show that Toronto has plenty of room both to borrow more money and to implement new sources of revenue (as do other GTA municipalities). The current political scene is not favourable: John Tory and most councillors insist on keeping Toronto property taxes lower than in neighbouring municipalities, and treat novel fees or taxes as plagues. But the political atmosphere may be changing along with the physical atmosphere. The neoliberal notion that private financing is somehow better for citizens (long supported by the Wynne provincial government) has been shown to be as false as trickle-down economics. New York City has imposed a corporate income tax – a corporate income tax going to city needs, imagine! That is legally out of reach for Toronto; but we’ve got to find ways to finance our infrastructure needs in a way that is fair and that maintains control in the hands of our public authorities.

If we collectively realize that cities are in better financial shape than senior levels of government, we may feel more empowered. We can actually decide to finance, own, and control our infrastructure. And if we finance and control our transit and utilities, we’ll be able to collectively decide how to better distribute the burden – by lowering TTC ticket prices, for example, and instituting a congestion charge for private cars (including Ubers) that can go towards transit.

In 1946, Torontonians voted in a referendum to assume new municipal debt in order to finance public housing. In 2019, would we vote to assume some debt in order to get more and better transit, in a way that retains all the control locally and in public hands? I would.