Lawrence Solomon
National Post
February 13, 2001

Mel Lastman, get off your knees! You’re begging the province for help. You’re begging the federal government for help. Your budget chief, bereft, warns that Toronto faces bankruptcy. With a budget shortfall of $300-million and growing, there’s talk of a 32% tax increase, 77% over five years. You’re considering closing two dozen community and recreation centres. You’re considering shutting down one-third of library branches. You’re considering scrapping bus service on Sundays and raising fares every other day of the week.

Mr. Lastman, I liked you more last year when you weren’t pleading poverty, when you promoted Toronto as the engine of the country’s economy. You dreamed of Toronto as a city-state with new constitutional powers. You touted Toronto as one of the Great Cities of the world, able to compete against the world’s best to host the 2008 Olympics, able to provide its citizens with an incomparable quality of life.

Yes, you can legitimately claim to have been shortchanged by Mike Harris when the province took over some responsibilities and downloaded others on to you. From a bean counter’s perspective, he got the better of the bargain. But when Mr. Harris downloaded assets for you to look after — billions of dollars worth of assets — he really gave you billions of dollars in revenue-producing potential, and the responsibility to make those assets work for Toronto. You now hold a more powerful and more lucrative power utility, transit company, water system and other assets that – – in able hands — can serve the citizens of Toronto well.

Pleading poverty convincingly can extract concessions, but this is a game you don’t want to win. Welfare from the province would create a loser mentality, destroying the city’s soul. Play the hand you’ve been dealt — it is a winning hand.

To dispose of your $300-million budget deficit, don’t start by scrapping the libraries and Sunday bus service — part of a package of proposed cuts that would save the city over $100-million a year. Instead, start by contracting out your water and sewage services: a French water company’s subsidiary promises to save you that much each year, and British or American water companies might save you even more. To save the $200-million balance, simply sell Metro Hall, a building that Toronto’s amalgamation made redundant. The city will save its libraries and community services and lose nothing that its citizens value.

That gets you through this year. Future years can look even better. Instead of raising transit fares and gutting transit service, sell the Toronto Transit Commission’s many routes to several private companies, as London has. Fares won’t rise wildly, as Toronto’s have in the past, and ridership will climb as competing companies provide passengers with choices, with excellent service and with added amenities, especially for the elderly and disabled. A public transit sale would not only reinvigorate public transit — for decades, politicians have denied the TTC the investment capital Torontonians have deserved — it would eliminate an annual burden on the city of some $300-million to $400-million, allowing for a hefty tax cut. But don’t cut taxes across the board. Use that windfall to especially spare Toronto’s apartment dwellers, who have been bearing a hidden tax burden four to five times that levied on homeowners and condominium dwellers.

Selling the transit authority would fetch a small fortune — perhaps $2-billion or more, depending on the conditions the new owners would face. That money, held in trust and invested prudently, would spin off enough annual revenue to overcome the city’s obligations to meet social needs that the province has downloaded. With reforms in public transit and water services alone, Torontonians — especially those least well off — will see improved services instead of loss of services, and taxes that are lowered instead of raised to unconscionable levels.

Great cities don’t close their libraries and garage their buses on Sundays. Great cities don’t fear private services or foreign investment capital. Toronto rose to prominence a century ago through the foresight of city fathers who welcomed private water companies, private transit companies, private gas companies, private power companies, and the foreign investors who financed most of them. Toronto declined when it punished entrepreneurs who could do a better job at a lower price.

Leaders of great cities do not think small by keeping out foreign suppliers, or private suppliers, who can provide superior public services. London and Paris both rely on private drinking water services and their citizens enjoy superior water quality standards — the Economist reports that London water tasters now prefer the taste of tap water to that of bottled mineral water. Sydney and Barcelona, whom you envy for having hosted recent Olympics, also rely on private water providers.

Mr. Lastman, rise above your grievances with the province. Take the taste test. Keep the buses rolling. Cut the taxes. Make Toronto work. Make Toronto great.