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Ontario Premier Doug Ford’s promise to hand the mayors of Toronto and Ottawa more powers could be a dangerous gateway to higher taxes and runaway government spending.

Hardworking taxpayers wouldn’t trust one person selected by someone else to unilaterally manage their household expenses and retirement savings, and yet that’s essentially what Ford might have up his sleeve for the residents of Toronto and Ottawa when it comes to the cities’ finances.

Ford has yet to officially outline all of the “strong mayor” powers he intends to give to the mayors of Toronto and Ottawa, but unilateral taxation and spending powers and mayoral vetoes appear to be on the table.

Giving mayors the power to tax and spend is courting disaster by gambling on who is in the mayor’s chair.

Take yourself back to 2009. The Pittsburgh Penguins won the Stanley Cup, General Motors was still making Pontiacs and David Miller was the mayor of Toronto.

Toronto taxpayers are still scarred by the historic property tax hike Miller forced on homeowners that year. Miller managed to convince members of Toronto’s city council to impose a 10 per cent hike in property taxes.

If Miller had the power to set tax rates and spending levels unilaterally, a 10 per cent property tax hike could have ballooned even further. Toronto taxpayers could have been staring down a 15 per cent or 20 per cent hike to finance Miller’s costly government spending schemes.

Some may argue that a fiscally responsible mayor could use unilateral taxation and spending powers to keep taxes low and government spending in check.

But for every fiscally responsible mayor, there’s a David Miller. That reality means handing mayors unilateral taxation and spending powers is a terrible idea. Without city council to keep a mayor in check, there’s no telling how high taxes could be raised or how much wasteful spending could be approved.

Mayoral vetoes would raise similar concerns. Ford has said publicly that part of his “strong mayor” proposal would include a mayoral veto, which could be overridden by two-thirds of city council.

Once again, whether these new powers would be good or bad for taxpayers depends on who is in the mayor’s chair.

A fiscally responsible mayor might veto wasteful government spending proposed by council. But a mayor willing to engage in reckless spending could also veto a fiscally responsible budget plan.

There’s also another risk: mayoral candidates could sell themselves as sound managers of taxpayer dollars, but embrace runaway taxes and government spending once in office.

Toronto Mayor John Tory is a perfect example. When he ran for mayor in 2014, Tory pledged to restrict the growth of property taxes to the level of inflation. But Tory has since embraced higher property taxes. This past January, Tory threw his support behind a proposal to raise property taxes by 4.4 per cent.

Even if voters think they’re electing a mayor who will responsibly manage the city’s finances, there’s no telling how much a candidate will change after being sworn into office.

The bottom line is that handing mayors new powers to get around the check-and-balance role of council is a dangerous gamble. Depending on who is in the mayor’s chair, taxpayers could benefit or get soaked with higher taxes and reckless government spending. The risks simply aren’t worth the potential gains.

Ford should shelve his plan to give new powers to the mayors of Toronto and Ottawa. Instead, he should focus on reforms that could bring real relief to taxpayers through more responsible city budgeting.

Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

There are a lot of alarm bells sounding across the country in relation to the housing market, as prices have skyrocketed in the past few months, pricing a generation of first-time homebuyers out of the market. This past week, the mayors of the largest cities in the country met virtually in their annual meeting to discuss their issues, and predictably, there were renewed demands that the federal government to something about housing, while they paid particular attention to things like housing for urban Indigenous populations as part of their commitments to tackling homelessness. But in the communiqués the mayors put out, there was a massive lack of basic self-awareness on display, which is that the federal government has very few levers in the housing space.

First of all, we need to raise the point that some of this price acceleration is likely temporary. As Tiff Macklem, Governor of the Bank of Canada pointed out two weeks ago in his speech on the Financial Systems Review, the pandemic created a surge in demand for single-family housing in suburban and outlying areas of major cities, combined with the fact that households were saving more because they couldn’t spend on things like travel. Not unexpectedly, supply has not been able to keep pace with demand, creating the spike in prices, and this is very much a problem of supply. But we also have to recognize that there has been a supply crunch going back years, exacerbated by the fact that immigration levels have grown higher than earlier projections.

“Even without a shock, some of the factors that caused prices to rise fast could reverse later, and that could leave some households with less equity in their homes,” Macklem warned. “And interest rates are unusually low. Borrowers and lenders both have roles in ensuring that households can still afford to service their debt at higher rates. Counting on ever higher house prices to build home equity that can be used to refinance mortgages in the future is a bad idea.”

In recent weeks, the Office of the Superintendent of Financial Institutions (OSFI) increased the qualifying rate for uninsured mortgages, and the federal government also introduced some new mortgage rules designed to help cool demand, along with measures like the foreign buyers’ tax in the federal budget, but these are only among the very few policy levers available at the federal level.

Yes, the federal government can supply funding to municipalities for housing projects – which they have been – along with other rental subsidies to individuals once they come to bilateral agreements with provinces, which helps with affordability issues for renters, but even federal dollars have a limited impact. As much as those dollars have been allocated toward building new affordable housing units and repairing existing ones, there have been lags in the construction because of bottlenecks at the municipal level, particularly around things like issuing permits.

When Trudeau met with the mayors this week, he did make this point ­– that the federal government alone can’t cool housing costs, as policy levers exist at all levels of government, such as zoning rules and consumer protection regimes. And he’s absolutely right – there are so many problems at the municipal level with fights around zoning, basic NIMBYism, and people fighting over the “character” of neighbourhoods, including parking lots that they refuse to see developed. There is a desperate need for density and infill developments, rather than simply building new single-family housing subdivisions by paving over more farmland, however that’s part of the problem – in many cities, councillors are beholden to developers committed to sprawl. It makes it very difficult to force through the kinds of developments that these cities need, which doesn’t help the problem of supply.

And this is where the provinces need to come in. Housing is a provincial responsibility (though, as stated, the federal government has reclaimed a funding role in this space by means of bilateral agreements), and cities are creatures of provincial legislation. Provinces have the ability to do things like setting minimum standards on zoning, or using municipal orders that can help break logjams, going over the cities’ heads to use carrots and sticks more effectively because they have the most policy levers at their disposal. But in Ontario, there is the added problem of externalities – as soon as one municipality starts to solve its supply problems with housing, people flood into the region and drive the prices back up again. This makes it all the more important for there to be broad-approaches in this province to help slow down that migration effect at least, because there is a monster of a problem centred around Toronto, and it’s going to take a regional solution to deal with it.

With all of this in mind, the fact that the FCM’s communiqué was focused solely on chirping at the federal government rather than any admission that the hard work falls on their own shoulders when it comes to dealing with affordability – the bulk of which is to massively increase housing supply – was rather telling. While appealing to the federal government has long been the policy tool of choice in this country, it has become exacerbated over the course of this pandemic, to the point where you might not think that we have a division of powers in this country’s constitution. There has been no problem for which the federal government hasn’t been called on to solve, regardless of whether or not they have the actual levers to do so (and they mostly don’t, in spite of kludging together a few temporary solutions).

There aren’t any easy solutions to this housing crisis, but the most important thing is that the people who have the levers actually need to use them, and that means the provinces and the municipalities. They can’t simply expect more federal dollars to solve this problem – they need to actually show leadership and do the hard work of zoning and permits – damn the NIMBYs, and full speed ahead.

Photo Credit: The Canadian Press

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.