The release of the 2009 Toronto budget points out once again the precarious state of the city’s finances.
This budget is balanced only by dipping into reserve funds and borrowing almost $300 million from the provincial government. Even with a four per cent increase in property taxes the city seems to be in financial trouble.
And although total expenditure comes to $8.7 billion for the year, it is not as though the city is meeting the needs of the people who live here. It includes no funds for new transit lines and none for affordable family housing. There was a hope the federal stimulus package would put money into these needs, but those hopes were once again dashed.
We need a new budget strategy, one that relies on our own strengths rather than hoping another government will solve our problems.
If Toronto could levy its own Goods and Services Tax — tacked on to the federal GST and provincial sales tax — the city could raise the revenue it needs itself, and pretty painlessly. An extra one per cent on GST in Toronto, raising it to six per cent, would provide the city an extra $600 million a year and I’ll bet few of us would notice the loss of small change.
That kind of extra money would permit the city to fund its own affordable housing program, improve recreation programs for youth, and offer better transit service.
Local politicians are reluctant to ask for the power to levy a citywide GST because they would then be on the hook for raising taxes. They feel better asking other politicians to raise those taxes and then whine when they don’t.
We need to grow up and take responsibility. City council should request the legislative power to levy its own GST in Toronto and achieve the financial muscle and independence to make a good city.
