Crisis Averted, For Now
We need permanent solutions for cash-starved municipalities
By
Margaret Hancock
Executive Director, Family Service Association of Toronto
Margaret Hancock
I love this city. As a life-long Torontonian, I have watched the city's communities evolve and its population grow; I have cherished our robust cultural offerings, stood beside my neighbours to celebrate sports victories and enjoyed our abundant green spaces. My belief in Toronto as a wonderful place to live is, in part, what attracted me to the Executive Director position at Family Service Association, where I have been thrilled to join my new colleagues in making this city a more just and supportive place for all of its residents.
Even with all of its wonderful qualities, our city faces some dire realities. One in every three children in Toronto lives in poverty. More than three-quarters of youth ages 13 to 17 live in high-poverty neighbourhoods—25 per cent of which do not have any facilities for youth within a kilometre.
The gap between rich and poor has reached a three-decade high and is now on par with the kind of disparity seen in underdeveloped nations. And in the GTA, there are 71,000 people on waiting lists for affordable housing.
Community service agencies like FSA Toronto are reminded of these statistics every day as we serve individuals and families who seek our support to deal with these challenges. In our 2006 research report entitled On the Front Lines of the Community Service Sector we noted that the community sector is facing a crisis of growing demand, low wages and persistent underfunding.
One of our important funding partners, the City of Toronto, also faces a fiscal crisis. In October, Toronto's city council made a landmark decision to adopt two new taxes that would begin to address the $475 million financial shortfall facing the city. The decision was hotly debated both in and out of council and was undoubtedly a difficult one to make. But it was the right choice for a city that strives to be a great place to live and is a leading example of a functioning, intensely diverse city.
Without the new taxes, critical programs such as home care for the sick and elderly, shelter for the homeless and victims of abuse, training and other employment supports for the jobless and a wide range of services would have been in jeopardy. In approving the new taxes, which apply to those who can afford it when they can afford it, council has signaled its support for a city that serves all fairly, including its most vulnerable.
But this is no permanent solution for Toronto. And municipalities across the province face similar challenges. Over the years, Federal governments have downloaded financial responsibility for services to provinces and, in turn, the Ontario government has downloaded to municipalities.
When the provincial government handed over the delivery of hundreds of millions of dollars of social services in the 1990s without providing corresponding funding, it all but paved the way for the situation we face today.
Municipalities can no longer fund the costs of these services from their own budgets. Toronto—unique among Ontario municipalities due to its size, demographics and demand on services—is particularly bound by a fiscal straightjacket that only the province can untie.
Toronto's main source of revenue is property taxes, which represent 42 per cent of the city’s total revenue. Compare that to an average of only 18 per cent for U.S. counterparts. And unlike other major cities around the world, Toronto does not and cannot have revenues sources that grow with the economy. As the need for community services grows, the City's pool of funding does not. And no doubt the tolerance for more tax increases in the future is low.
In recent years, the province has begun to take back the cost of some social services, but hundreds of millions of dollars in downloaded costs remain. The federal government has been running a surplus for an unprecedented 10 years and the provincial government is also in a surplus position. It is unacceptable that more than $30 billion in surplus funds are located within the two senior governments while municipalities struggle to pay for services.
Toronto is the financial engine of Canada. All three levels of government have a stake in Toronto's success and its viability as a city. A downturn in our city's economy would rapidly increase the costs associated with social services and leave a bill for the government least able to afford it.
Organizations that provide essential social services need access to stable, government funding. Only about 10 per cent of all philanthropic giving in Canada goes toward social services. We cannot survive on donor generosity alone.
Everyone benefits when people in our communities live in safety and comfort, when each of us has the opportunity to earn a fair wage, to be productive contributing members of our society, and when the social supports are available to help us through difficult transitions. By building strong communities, our services support everyone in the community – even those who never walk through an agency's doors.
The hard work is not done for our City councillors. It is imperative that Toronto continue to push the provincial and federal governments for fair and sustainable funding solutions—and that the two senior governments open their purse strings to municipalities if they truly want to build a strong Canada.
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