Urban Renaissance Institute

Glenn Woiceshyn
National Post
December 5, 2000

Dear Editor,

It’s about time the National Post published an op-ed from the Ayn Rand Institute. People keep telling me that the Post is a pro-capitalist newspaper, but there is no greater champion of capitalism than novelist/philosopher Ayn Rand.

Robert Tracinski rightly argues that the American urban voter philosophically leans towards collectivism, whereas the rural voter leans towards individualism. Anyone familiar with Americans knows this to be true.

Lawrence Solomon argues the opposite, exhibiting flawed logic and gross evasion. The fact that many rural voters accept government handouts doesn’t necessarily mean they are philosophically oriented towards collectivism — it could mean that they are inconsistent or that they believe collectivism is responsible for creating the conditions that force them to seek government help. Likewise, the fact that entrepreneurs and high-tech companies exist in cities doesn’t mean that the urban population at large is philosophically oriented towards individualism. What a ludicrous inference!

Most urban dwellers in America (and Canada) lean philosophically towards collectivism — primarily because they have been indoctrinated with collectivism via the education system and the media. Hopefully, the Ayn Rand Institute will someday change that. After all, Ayn Rand painstakingly proved that collectivism is evil and destructive.

Glenn Woiceshyn, Calgary, Alberta

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.

Paul Mitchinson
myTO.com News
February 16, 2001

Toronto’s list of urban maladies just keeps getting longer and longer. Multi-million-dollar budget shortfall? Check. Traffic-snarled streets? Check. Growing armies of the homeless? Check. Legions of bad sushi restaurants? Check again.

To all but the last of these complaints, Lawrence Solomon, executive director of the Urban Renaissance Institute on Brunswick Street, thinks he has some solutions. Perhaps surprisingly, his solutions don’t include hiking taxes by 30 per cent, padlocking libraries and community centres, or even screaming abuse outside Mike Harris’s Queen’s Park office.

Instead Solomon offers some radical, perhaps Swiftian, proposals:

1. Transform urban thoroughfares into toll roads.
2. Sell off the TTC.
3. Privatize garbage collection, power and water utilities.
4. Stop whining about amalgamation.

Solomon is a walking contradiction, an environmentalist and anti-nuclear activist who also happens to write a regular column for the National Post’s financial pages. His ideas have been implemented by politicians on both sides of the political spectrum, from Jimmy Carter to Margaret Thatcher.

Since writing his 1980 book, Energy Shock, Solomon has been advocating market principles for the energy sector, a pursuit that has led him deep into the swamp of urban social issues. But by uniting urban activism and environmentalism with free market principles, Solomon might be as rare as a spotted owl in a Bay Street bank tower.

"Most people naturally gravitate to cities," says Solomon, speaking from his Toronto office, "Politicians seems preoccupied with dispersing the population through all kinds of mechanisms that discourage urban life-through tax policies, planning rules, development codes, and all kinds of other indirect mechanisms. Without those mechanisms, we would find that we lived in very dense cities because we wanted to." And we’d be polluting the environment less.

It’s a difficult message to appreciate on sweltering August days, when yellow haze blankets the city like a pile of dirty socks. Or when you’re parked on the 401 on a Friday afternoon, idling and swearing along with the thousands of other motorists that surround you.

"Gridlock" is just one of the many serious urban issues that Solomon is trying to solve. And the problem, as everyone knows, is getting worse. In the morning rush hour alone, according to Toronto’s transportation services department, 560,000 people crossed the city’s borders in 1998. Ten years from now, that’s expected to jump to 825,000. "Rush hour" is now 24-7.

Let the market come to the rescue, argues Solomon. "Free roads don’t provide the economic signals needed to determine what roads are needed and when," he recently wrote. "If we tolled our roads, instead of funding them through gasoline taxes, property taxes and general government revenues, we’ d have fewer but better-maintained roads, we’d have fewer two-car families and we’d tend to drive our one car far more economically."

But what about public transit? How is Toronto going to pay for the $300-400 million annual subsidies it gives the TTC to get urban commuters to work? Sell it off, argues Solomon. When the United Kingdom abolished public transit monopolies in the 1980s, ridership went up, and service vastly improved. London’s crumbling rail infrastructure, on the other hand, might suggest some natural limits to this approach.

But some very successful experiments in privatized public transportation have already taken place in Ontario. The most celebrated was Allo Stop Carpooling, the Montreal-based company. And what happened to Allo Stop?

Last year, the Ontario Highway Transport Board forced it to cease its activities in Ontario, after protests from bus companies who didn’t like competition. Proving, once more, that government is often not part of the solution, but part of the problem.

Part two: Financial follies

Paul Mitchinson
myTO.com News
February 20, 2001

Is there a way out of Toronto’s financial mess? Many city politicians, Mayor Mel Lastman being the most vocal, have suggested that the costs from amalgamation leave them with little choice but to raise taxes, cut services, freeze wages, and throw entire fleets of limousine drivers on to the unemployment rolls.

This has led to angry denunciations from both sides, with accusations of betrayal, lying, and looking like a monkey.

But it doesn’t have to be that way, argues environmentalist and urban activist Lawrence Solomon. Downloading has been a huge financial burden, he agrees, but it also "represents an enormous transfer of wealth to the city — the city has, for example, acquired clear title to Toronto Hydro, which is worth $1-billion, and perhaps as much as $2-billion.

And then the are the additional roads that Toronto now owns. Roads that have to be salted, plowed, patched, and repaved-all of which has to be paid for by the city. But why not transform them into "wealth generators asks Solomon, or collection systems, making drivers pay for their upkeep.

"There are enormous opportunities the city has if it turned its attention to capitalizing on its assets. Instead its focus is on pleading with federal and provincial governments for help, pointing fingers everywhere. Now there’s some validity to that, but it’s just not productive.

Productive, no, but entirely predictable.

Governments, especially city governments, have a lamentable record for protecting the genuine interests of their constituents. Solomon points out that the proposed Spadina Expressway was championed by all seven Metropolitan Toronto governments in the 1970s. It was only the determined opposition of local residents, assisted by the provincial government, finally killed what would have been an urban atrocity.

Even the perennial problem of homelessness, he argues, has been aided and abetted by urban policies. Homelessness is not, as the right would have it, a problem of mental illness. And it is not, as the left would have it, an issue about greedy developers and the failure of the market.

Rather, argues Solomon, "a lot of homelessness was created simply because the stock of low-quality inexpensive housing that used to exist in cities was destroyed. And with the destruction of hundreds of thousands of living units – all at the bottom end – people were simply forced off and into streets.

Government continues to exacerbate the problem. Mississauga outlaws inexpensive basement flats. And poor people are often unable to collect welfare if they try to cut costs by moving in with friends or family members.

There are signs that Toronto’s financial crisis might actually push politicians to champion some of Solomon’s ideas – more out of necessity than conviction. The Toronto Star recently came out in favour of contracting out garbage services. Water utilities are also up for consideration. And even Toronto Hydro might end up privatized.

But Lawrence Solomon isn’t holding his breath. He loves cities. He just hates what politicians do to them.

Part One: TO’s woes

Lawrence Solomon
National Post
March 27, 2001

Toronto has a magic bullet at its disposal able to stem urban sprawl, solve the city’s budget crisis, reduce traffic congestion, attract businesses back into the city, reduce air pollution, and provide the city with a revenue source so powerful that it would eliminate the city’s financial dependence on provincial and federal levels of government.

The magic bullet comes from the heavens but it doesn’t require prayer, divine intervention or any major new taxing powers – such as the right to levy a municipal income tax or gas tax – that Toronto has repeatedly, but unsuccessfully, sought.

The magic bullet is satellite tolling of vehicles that use Toronto’s roads, beginning with trucks and other commercial vehicles.

Road building and maintenance is one of the city’s biggest expenses, directly accounting for over $400-million of its $6-billion budget, and indirectly costing hundreds of millions more in other road-related expenses such as the policing of roads and environmental costs. Even with these enormous expenditures, the city’s roads are poorly maintained, leading to needless wear and tear on private vehicles, costly delays to businesses and individuals, accidents and pollution.

Although all vehicles erode pavement, the overwhelming cause of road damage comes from commercial vehicles, especially heavy trucks – a 10-tonne axle on a big truck does 160,000 times as much pavement damage as an automobile axle; a semi-trailer truck, 29,000 times as much damage as an automobile. Because trucks cause the greatest proportion of damage to city roads, their owners should pay the city a proportionate share.

Under the current system, the owners don’t. Toronto residents and businesses pay to maintain the roads through their property taxes, without regard to the damage – or lack of it – that individual businesses or individual families cause. To compound the mismatch, every morning some 110,000 commercial vehicles enter Toronto and every afternoon and evening a comparable number leave. Most of these commercial vehicles contribute nothing toward Toronto’s maintenance of its roads. In fact, many of them are owned by companies that primarily serve the Toronto marketplace, but from outside its municipal boundary, to avoid Toronto’s extraordinarily high business taxes.

With satellite technology, it is now feasible to track all vehicles, and toll them on the basis of their road usage. Michigan and eight other U.S. states are considering a satellite-based "odometer tax" – a tax from outer space, critics call it – that would replace the gas tax and toll booths by charging vehicles a flat fee per mile travelled to finance transportation needs. But an odometer tax on the private automobile that was unrelated to the damage caused by driving would only draw fire from a public wary of an indiscriminate tax grab – and of Big Brother spying on its activities. Much better to toll based on the costs that driving incurs, and to start with trucks and other commercial vehicles, whose day-to-day operations are already regulated, and whose movements are already tracked – most large truck fleets and many taxi services, including some in Toronto and other North American cities, are either already dispatched by satellite or are planning to be.

Tolling commercial vehicles on the basis of the damage that they do, by varying the toll by truck and by a road’s capability to support it, would discourage the use of very heavy trucks – the fastest growing part of the road system, by far – by encouraging shippers to use lighter trucks or different routes, and to avoid sensitive roads. The entire Toronto region would benefit from fewer potholes and other causes of road-related congestion, which cost the greater Toronto area an estimated $2-billion a year in delays in moving goods alone.

Because commercial vehicles contribute to Toronto’s gridlock, a Toronto councillor recently suggested a complete daytime ban on all delivery vehicles in large swaths of the city, and Toronto Mayor Mel Lastman envisages the need to ban both commercial vehicles and passenger vehicles within a decade. Rather than banning commercial vehicles, Toronto should simply toll them.

While commercial vehicles are less numerous than private automobiles, and while most commercial vehicles already arrange their schedules to avoid rush hour and congested areas – their owners understand better than most that time is money – trucks nevertheless worsen congestion out of all proportion to their number: They’re slow to accelerate, they often have trouble negotiating turns, they squeeze other vehicles by taking up a large proportion of road space and they disrupt traffic when they unload in older areas that weren’t designed for large vehicles.

By tolling commercial vehicles for the costs they foist on others, many shippers and their customers would find new ways to avoid road damage and congestion costs: Suppliers might locate closer to their customers, for example, and businesses might extend their hours to receive goods after hours. The city, meanwhile, would have found a new way to raise hundreds of millions of dollars in road user fees. The revenues raised from out-of-towners could then help meet Toronto’s crippling budget deficit – and allow for road improvements, rather than the cuts now envisaged – while the road revenues from Toronto businesses could be entirely used to lower the crushing property taxes paid by businesses. The result? City businesses that imposed great demands on the road system would face new costs if they couldn’t adapt, while those with modest needs for road services would realize savings. On the whole, Toronto businesses would thrive – they would no longer face crippling competition from businesses located just outside the city boundary, which were paying low suburban taxes and nothing for the use of Toronto roads.

Once commercial vehicles are efficiently tolled, travel distances would contract and congestion would ease, helping Toronto’s economy run more smoothly. With the satellite infrastructure in place, the tolling of private automobiles can then be tried on some of the expressways already touted for tolling – government bodies have long-standing plans to toll the Gardiner Expressway, a major east-west route, and earlier this month, a councillor suggested a $2 toll on the Don Valley Parkway, a major north-south expressway. Tolling these routes could test solutions to the public’s privacy concerns – pre-paid toll cards, similar to pre-paid long-distance cards, for example, could guarantee anonymity.

Inefficient road systems are the single greatest problem facing city economies and city life around the world. Electronic toll roads – also called free-flowing roads, because proper management can ensure they are never congested – will inevitably be called upon to solve this city conundrum. A constellation of factors – Toronto faces twin budget and congestion crises within the greater Toronto area, North America’s fastest growing region – point to satellites high above the skies of Toronto.