Economics and Wealth

Three years ago Humanize Toronto said that Mel Lastman's goal of freezing property tax increases was an untenable measure considering the enormous budgetary shortfalls the City was facing. Three years on, and after steady increases in property taxes, our economic situation seems just as untenable. Things need to change.

The City of Toronto is responsible for providing (and therefore funding) a very wide range of services for residents and businesses. While the number of services to fund has grown (because of downloading from the Province), the ability of the City to raise the money required has not. This financial straightjacket is due mainly to the limited powers given to municipalities to raise taxes to handle their own affairs.

The City of Toronto comprises 10% of the population of Canada and produces approximately 20% - 25% of the country's total wealth. Yet we cannot pay for our constantly deteriorating services. This is no surprise when one considers that in 2002 alone the city paid out $8 billion more tax dollars to the Provincial and Federal governments than it took in. A tiny fraction of that sum would go a long way toward solving our annual budget crisis. (This year the city budget is facing a $200 million shortfall.)

Humanize Toronto would demand that the Province and Federal governments give the city more power over its economy and the ability to raise funds. But until that's done, there are things the City can do:

• Considering that the budget shortfall that is expected over the next 5 years is to be more than $1 billion, the City must implement a Participatory Budget in order to hear from everyone regarding how our tight resources are best allocated (see Neighbourhood Power - Real Democracy)


• Toronto must create a community bank that would supply small, interest-free loans to worthy community development projects. Rather than simply charging interest on the loan, the bank would get involved with the new venture to ensure its success, and then be repaid through the profits generated. Examples of interest-free banks are Citibank's Islamic Investment Bank in Bahrain, and the JAK Members' Bank in Sweden.


• Incentives should be created and benefits given to companies that establish worker-capital co-management and that reinvest profits back into the local economy.


• The City should be able to levy a tax on hotel accomodation. Among other things, these funds could go back into helping the tourism industry damaged by SARS.


• Toronto should be exempt from paying PST and GST on City purchases.


• A portion of gas tax revenues collected by the Provincial and Federal governments should be given back to Toronto in order to fund the expansion of public transit. These governments collect over $5 billion a year and contribute not one measly dime to the operation of the TTC.