Lawrence Solomon
The Next City
December 1, 1996

What’s the right size for a city? Toronto’s elites have been feverishly debating the merits of amalgamation for a full year now, and to hear either side, calamity may come if a befuddled Mike Harris government — which seemingly changes its mind fortnightly on the subject — ultimately settles on the wrong decision.

Amalgamationists believe that residents who live within the boundaries of Metropolitan Toronto are overgoverned, with seven sets of squabbling politicians and bureaucracies building fiefdoms at seven city halls. Amalgamationists also claim the moral high ground. Some municipalities within Metro provide better services than others. With one unified city, all Metro citizens would achieve universality and equity in the delivery of services.

Non-amalgamationists, pointing to experiences in Halifax, where costs rose after a recent amalgamation, claim the metropolitan bureaucracy would burgeon. These defenders of the status quo make moral claims, too, saying that local government is close to the people and better able to understand the stuff of community life: what hours to open the local hockey rink, how to allocate parking on neighborhood streets.

Like all complex questions in life, the arguments for and against amalgamation can’t easily be labelled left or right. Big centralized government is often viewed with suspicion by conservatives, yet its proponents include the Progressive Conservative Party of Ontario and David Crombie, a former mayor and federal PC cabinet member; while its opponents include Toronto’s left-leaning city council and John Sewell, a former reform mayor of Toronto and central planning czar for the province’s previous NDP government.

Conservative thought on local government stems from public choice theory, a Nobel Prize-winning doctrine which argues the merits of many small governments. With cities competing to attract businesses and residents alike, they will be inclined to keep taxes low and services high. Many small cities also provide a hothouse of experimentation, leading to successes in one jurisdiction that will be copied elsewhere, to the betterment of all.

Yet city governments aren’t ordinary corporations competing with one another, staying close to their customers by giving them the satisfaction they deserve. City governments have the power to create or enforce local monopolies, and local monopolies — whether public or private — neither compete much nor learn much from one another. No better example of this exists than right under the noses of all these Toronto-area combatants in this highbrow debate over amalgamation.

In the large Toronto suburb of Mississauga, Hydro Mississauga bears the financial burden of rapid expansion and the disadvantage of servicing a sprawling suburban territory. By all rights, Hydro Mississauga should be charging its customers much more for power distribution than does Toronto Hydro, with its many customers and compact service territory. Instead, Toronto Hydro’s costs are two-and-a-half times those of Hydro Mississauga. Innovation, rather than blossoming in a municipal hothouse of experimentation, has been embrittled in a deep freeze.

Municipally owned or regulated enterprises do not experiment, they stagnate; such local backwaters prevail in virtually all municipal spheres. A Metropolitan Toronto cab dropping someone off in Mississauga is forbidden — by monopoly law — to pick up a Mississauga resident travelling back to Metropolitan Toronto. Public transit vehicles, too, must stop at the Mississauga border, senselessly shuttling commuters off and onto buses, erecting a customs border at city limits to thwart the normal comings and goings of the citizenry. In contrast to this Kafkaesque world that our local governments construct, the real world of citizens ignores city boundaries: The majority of us who can afford private automobiles go about our work and play in a seamless city.

The costliness of the border crossings — in needless travelling time for commuters, in inefficient public transit routes and in perversely determining urban development for businesses and homeowners who take the borders into account when they consider changing jobs or homes — cries out for change. The moribund local municipalities did nothing to solve this local problem for decades, leading to pressure for amalgamation. With the province coming to the rescue by wiping out the borders, services can finally be coordinated.

In public transit, one large monopoly, if intelligently run, will always be preferable to many small monopolies. If unintelligently run, one large monopoly spells doom, as it did for Toronto’s Transit Commission after a previous amalgamation: Its densely populated, highly profitable City of Toronto routes were plundered to service unprofitable suburban routes, leading to the entire system’s virtual collapse.

Here then, is the essence of the amalgamation choice. Should citizens prefer the steady decline of services under the status quo, or risk something much worse in the unlikely event they will get something better? Faced with these imponderables, is it any wonder that Metropolitan Toronto’s residents are as confused as the politicians. Yet citizens need not choose between two evils, because there is a common-sense, proven alternative to both large and small monopolies.

Ten years ago, faced with a public transit industry in severe decline, the United Kingdom abolished public transit monopolies in most of the country, leading to wide-open competition for public transit passengers, regardless of municipal territory. With the local governments out of the way, experimentation, for the first time, thrived. It started slowly, a few bus companies daring to replace their large buses, which provided infrequent service, with modern minibuses — everything from 20-seat Ford Transits to 33-seat Mercedes-Benzes — that ran two or three times as often. To attract customers, particularly the elderly and others who were less mobile, the companies adopted new practices, like hail and ride, which enabled customers to board buses between stops. To find still more customers, the companies began venturing into the estates, the large public housing complexes that house the poor. Routes and schedules changed, too, to reflect the times and places people really wanted to travel.

The innovations turned the industry around. Passengers began coming back. Ridership is up; automobile use down. The costs of running a vehicle dropped 40 per cent. Without municipal borders putting the brakes to public transit vehicles, buses log 25 per cent more kilometres, in 85 per cent of the cases without any subsidies.

Without public transit monopolies, without the hydro and other artificially sustained municipal monopolies, the raison d’être for amalgamation — coordinating these large monopoly functions — disappears.

But cities — themselves the product of past amalgamations — have themselves often grown too large. Well-functioning cities are comprised of neighborhoods, often very cohesive ones, that organize themselves into ratepayer and business associations. At the neighborhood level, where people voluntarily come together out of shared concerns, can be found the natural levels for many city governance functions, such as the maintenance of parks and other public spaces and regulation of neighborhood standards. Neighborhoods have been demanding, and getting, increasing powers over the years, forming a quasi-level of government. And, in the final analysis, despite rhetoric about city governments being close to the people, only neighborhood democracy can be counted on to respond to community needs.

In the great tests of local democracy, local governments — when defined as city governments — rarely get passing grades. Urban renewal — the euphemism for the levelling of entire districts that city fathers deemed unworthy — was city driven, with municipal taxation perversely enlisted to coerce landlords to convert old buildings into parking lots. Urban expressways, perhaps the single-most destructive force promoting urban decline, were also local government driven — another conspiracy of city councillors against neighborhoods they viewed as expendable. In Canada’s greatest showdown over expressways — the successful battle to stop the Spadina Expressway from gutting some of the City of Toronto’s proudest districts — the neighborhoods fought all seven Metropolitan Toronto governments, including their own City of Toronto government. The neighborhoods’ salvation came when the provincial government, on the local residents’ behalf, stepped in to fight city hall.

Governments don’t set city borders, they set city limits — the territory that a city may monopolize. The real city’s boundaries are set by its citizens, who often settle just outside the city limits to escape the clutches of some of the city’s monopolies.

These new suburbanites want the city’s amenities without paying the monopoly prices. In so doing, they threaten to bring the city down by inadvertently creating a vicious cycle: Bit by bit, taxes go up for city residents to pay for the suburbanites’ uses, leading more people to choose suburbs over the city, leading city taxes to go up until the city collapses. To prevent this scenario, amalgamationists want to expand the monopoly franchise to capture new communities.

But amalgamation only creates a new city limit to draw future suburbanites, leading to new amalgamation battles down the road; it fails to come to grips with the heart of the problem — the monopolies that inevitably lead to unsustainable cities.

To stop suburban sprawl and to save the cities, amalgamationists and non-amalgamationists need not fight one another, they need only lay down their monopoly powers. The price of city services will then plummet below those of the suburbs because cities are inherently more efficient, setting off an urban migration that repopulates city centres and revitalizes city businesses — a virtuous circle that lowers further the cost of city services while restoring the tax bases of cities. A virtuous circle that creates stable, sustainable cities.