Toronto Nearing Bankruptcy

Toronto Nearing Bankruptcy

Friday April 20, 2007
"What costs $7.8 billion, will raise your taxes above inflation and still won't be enough to pay for everything?
Welcome to the upside down world of Toronto's budget, where every solution presents another problem.
And if you think things are bad now, just wait.
The financial experts at City Hall are warning Toronto could be forced to declare bankruptcy next year, leading to a host of service cuts bound to anger taxpayers.
Councillors began debating this year's fiscal package on Friday and what's in the document shows their method isn't sustainable.
They've dipped into the emergency reserve piggy bank to the tune of $384 million to cover ever rising costs.
And they've done it so often since Mayor David Miller was first elected in 2003, that there's not much left in the kitty.
That means they may not be able to pay for important services you depend on by 2008 - and that's not counting what might happen if we run into an unexpected emergency like the SARS crisis.
What could it mean to you if T.O. went broke?
You may not get the same snow removal services, leaf and grass collecting could be cut, road repairs could be lessened, ambulance and firefighting staff could be reduced, parks might not be maintained, litter wouldn't be cleaned up and even overall garbage collection could be affected.
And there's no telling how much a ride on the TTC would cost or how much more intermittent service might be. At least 51 percent of this year's budget is going to keep the Red Rocket running.
The dire prediction could leave Toronto the Good looking a lot more like Toronto the Shabby.
"The light at the end of the tunnel may be a train coming towards us and creating a terrific wreck," warns Councillor Case Ootes, who's not one of Miller's biggest fans. "I think the city is on the verge of bankruptcy. This council is bankrupt when it comes to managing the affairs of this city."
What can be done to stop the accounting apocalypse?
Raising taxes won't work. They're already expected to be going up by nearly four percent this year. And while taxpayers would likely rebel at the idea of yet another increase, property taxes alone can't fix all the problems.
That leads to an equally scary scenario - that the recently enacted City of Toronto Act could tempt money hungry councillors to impose everything from road tolls to entertainment taxes. (To see what may be in the pipeline, click here (external - login to view).)
Experts insist unless Queen's Park and the feds come to the rescue, the city that you know today won't look anything like the place that's coming next year.
"Ottawa and Queen's Park swim in money," complains Councillor Adam Vaughan. "This city has hit a wall and the well is now dry, and we're going to have to either find new sources of revenue or massively change the way we provide service in this city."
"The provincial government is cowardly in not mending its own house in making sure it has enough revenue to generate the funds for their own programs," contends Councillor Kyle Rae. "They are skimming money off the city of Toronto to fund their provincial programs. That's wrong. If we can get a government in Queen's Park that will do right thing for municipalities, then we'll have a healthier Ontario."
The province has faced these kinds of allegation before. They claim they've done all they can for Toronto and that local politicians have to learn to control their own expenses.
And as for the Conservatives on Parliament Hill? They gave the city their answer - and the cold shoulder - in last month's federal budget.
"It's time, quite frankly, that municipal officials look at what their responsibilities are and how they spend their money," Finance Minister Jim Flaherty made clear back then.
So to paraphrase the vernacular, if it's going broke, make sure you fix it.
Because while you're supposed to save for a rainy day, it now appears there may be a lot of clouds in the fiscal forecast.
And City Hall can't afford the umbrellas to cover us all."

And who is it you think is going to end up paying for this?!?
It's time for Toronto to exercise its taxing powers and make people pay the cost of what they get. It's also time for the city to make sure all municipally levied fines are collected and all back taxes and overdue balances are marched to to the till. There have been horror stories surrounding the competence of the city in this regard.
L Gilbert

Hey, they could ask for bailout dough like Bombardier, Air Canada, etc.
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