Politics - Federal

Flaherty Dismisses Problem He Helped Create

By Ben Bull
Published December 03, 2007

Good column in the Toronto Star today about Federal Finance Minister Jim Flaherty's ongoing bout of flatulence.

In case anyone has forgotten, Flaherty, who has recently resorted to mocking Ontario's municipalities over their cash crisis, was part of the Mike Harris government that re-jigged the Provincial/Municipal downloaded equation ten years ago.

As Carol Goar notes:

Either Finance Minister Jim Flaherty has a very short memory or he thinks Ontarians do.

A decade ago, he was a senior minister in the Ontario government that imposed a massive restructuring plan on the province's cities. It forced municipalities to assume half the cost of welfare, disability payments and an array of social services. It downloaded the province's aging stock of public housing on local governments, with a one-time repair grant. And it cut off funding for child care and public transit.

The consequences? We know them too well:

In the late 1990s, municipalities started experiencing chronic budgetary woes. They delayed sewer, water and road maintenance to pay for basic services. Some raised property taxes, others drained their contingency reserves. Traffic congestion worsened, the homeless population swelled and the province's urban infrastructure deteriorated.

And what is Flaherty doing about it?

Flaherty, who now controls Ottawa's purse strings, accuses municipal leaders of profligacy. He lectures them about expenditure management. He mocks them for whining, sulking and being grumpy.

In other words - nothing.

Some RTH posters have suggested that the Feds are right to stay out of this debate. Municipalities make their own messes, they claim. Let them straighten it out themselves. To this Goar points out, "all the savings that sharp-pencilled municipal accountants can find won't put cities on a sound financial footing."

All the programs that penny-pinching councillors can cancel, from street festivals to tree planting, won't make up for the costly obligations that Harris downloaded on them.

Two things are clear to me on this subject:

  1. Something has to change in the current funding formula equation, and

  2. It's going to take all three levels of governments to do it.

Ben Bull lives in downtown Toronto. He's been working on a book of short stories for about 10 years now and hopes to be finished tomorrow. He also has a movie blog.


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By peter (anonymous) | Posted December 03, 2007 at 17:26:52

i don't know why but politicians hate cities. must be all the poor, homosexual lefties.

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By suzie (anonymous) | Posted December 03, 2007 at 19:37:52

Politicians are people too...but Flaherty may make me change my mind about this.

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By Genghis (anonymous) | Posted December 03, 2007 at 20:33:14

accurate but not so accurate from mzz.Goar.

Yes the Tories D/L on the municipalities.. as did many other provicial governments at that time across Canada

She forgot to mention Mr Paul Martin LIBERAL balanced his budgets on the backs of the Provinces years ago with Federal funding cuts in Equalization payments.Dont blame Harris, Charest,et al or if you do..look up.. LOOK WAY UP to the Feds,and Il call Rusty..

The shit just slides downhill is all. rightly or wrongly

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By Humanist (anonymous) | Posted December 04, 2007 at 09:04:21

Agree with Ryan. Harper's government isn't interested in a city agenda, really. Didn't he just veto a nominated candidate in Toronto because he wanted to talk about poverty? Doesn't that tell the story?

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By Tom Cooper (registered) - website | Posted December 04, 2007 at 10:06:45

I agree with many of the comments (and thanks Ben for highlighting the column - it was a good read). Couple of thoughts though:

We have to remember Harris' rationale for downloading - basically placing funding for human services onto the plates of municipal taxpayers. Ontario remains the only jurisdiction in North America that funds these types of social services from property taxes. It is a completely regressive system and leaves cities extremely vulnerable during periods of economic downturn. Despite federal cuts to provincial transfers in the 1990s - no other province followed that example.


Harris' reasons for imposing local service alignment (what we've come to know and loathe as 'downloading') never made any financial sense - but then again it wasn't supposed to. Saddling property taxpayers -especially in older, high needs cities- like Hamilton and Toronto with those costs was a political decision. I don't think anybody in that government expected the exercise to be revenue neutral, but Harris knew his support base lay in outlying GTA municipalities with lower social service costs than those of the inner cities. Taxpayers in Oakville, Mississauga, Durham, York saw a net benefit (even with GTA pooling) - voters in Toronto and Hamilton who weren't voting Conservative anyway, were hammered by downloading. Harris was able to impose massive provincial income tax cuts as a result -despite the fact that it was just a shell game, with residents of high needs cities having to pay a bigger share (through increased property taxes or decreased municipal services) in the end.

Another line of thought follows: the process of downloading social services/social housing/transit/ambulance services also allowed Harris to upload education costs off the residential tax base. Harris wanted to control the education purse strings so as to more directly control the local Boards of Education. We can all remember the strife that existed within the education system during those years.

While I agree that the feds certainly didn't help matters for cities in the 1990s - and they shouldn't be let off the hook (eliminating all new federal social housing starts was one example among many other things), but downloading social services to municipalities was unique to Ontario - another failed component of the Common Sense Revolution.

I also think putting too much emphasis on federal responsibility in this matter allows the province to claim their hands are tied. They're not. Let's not forget the province has a pretty significant budget surplus too. Downloading must be rectified and it is the province's responsibility.

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By Genghis (anonymous) | Posted December 04, 2007 at 13:13:23

The Tories ( and to an extent, Liberals)have never done well in the inner cities so I think they tend to just write them off.

I could be wrong but they are mostly hard core left wing/NDP/Liberal, however,I think even the more Tony areas of Toronto vote Liberal

Dilemma for the cities and the Federal Tories.Unless they both make nice its a mexican standoff.Harper has much more to gain playing to the base and faithful.Blue Liberals and REd Tories will put him over the top if you can get that soft Liberal vote back from the 905 and Quebec.

Cities will NOT vote for them so he does not play to them.Credit where its due.At least he tells them to thier faces.Dont vote for me...Dont expect massive amounts of money.Go see Dalton hes your man.

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By Genghis (anonymous) | Posted December 04, 2007 at 17:49:11

Ryan,I am not so sure it is blantant as "they should do it because it is the right thing to do" of course it is the right thing to do, but never politically smart.But no party will do it and not be seen to be doing it, or take credit for it.

Look at Dion.First against Veiled voting.. now the Tories are against it.. so he is FOR it.Swings and roundabouts.All liars.

This whole system of giving money has Mafia Family aroma to it.Everyone takes care of his own, and does nothing unless they get cresit for it.Giving money to cities via Liberals or(insert competitor here) is wasted in the vote scheme of things.The issue then.How to get the money into the Cities hands.. and the reciprocating votes in return.Not easy.but thats Politics..

ie If the Federal Tories could give the money directly to the Cities and by pass the Provinces( where it is cut and diluted and trickles back down to the cities) I am sure this would be more than acceptable to the Tories,but this intrudes on jusrisdiction.This is Capo McGuintys back yard.He wants his "cut"

Every party does the same optics and gymnastics.The Liberals were loath to give the Harris Govt any money unless they could be seen to get it to those that vote could be persueded to vote or hold "Liberal".

I am starting to wonder if there is a need for Municipal governments at all anymore.Pehaps the "City hall" of the Provinces should be extensions of,and merged with Provincial ridings during elections.

No need for GTA transit consortiums overlapping/colliding with PRovincial/Federal jusrisdictions.

There are too many levels of government with a "Goodfellas" mentality.Every local "Don" responsble to his constituents needs his "take" of the tribute until there is nothing left.

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By jason (registered) | Posted December 04, 2007 at 23:36:21

for what it's worth, I don't think urban dwellers are "hard core left wing/NDP/Liberals". I think urban dwellers are, well, urban dwellers. They aren't going to vote for any party that so blatantly hates cities and will do nothing but steal and pillage from those cities in order to fatten their own pockets. City dwellers want to vote for a party that might actually pretend they exist. I don't think that party exists in Canada.

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