August 15, 2011
Selling the City: Rob Ford's Toronto
by Carlo Fanelli
"We don't have a revenue problem [at city hall], we have a spending problem, the City's addicted to wasteful spending."
"I will assure you that services will not be cut... guaranteed." — Rob Ford
As the immediacy of the financial crisis fades from public scrutiny in Canada, its aftershocks continue to strain public finances. The public treasury bailed-out banks and corporations by taking on their bad debts, supplying subsidies and increased spending to counter a sharp recession. Now, the economic crisis has moved into the public sector. Paradoxically, despite being the source of the costs of the crisis that now burden the public sector, the banks and capitalist classes are now demanding government austerity. In place of bloated CEO salaries and the speculative excesses of the financial sector, media and political attention is fixated on cutting public services and attacking public employees, the poor, pensioners and just about any user or producer of public services.1
Canada's cities have been particularly hard hit. From the government restructuring under neoliberalism going back to the early 1990s, services have been downloaded to cities to provide without fiscal capacities at the local level being increased. This was on top of Canadian cities already suffering from a lack of a national urban policy (possibly the only state in the world without one), a national transit plan and limited taxation capacities constitutionally and administratively. The transfer of private-sector debt into the public sector, with its inevitable reverberations down the governance structure as austerity takes hold, has made the fiscal crisis of Canadian cities move from being simply bad to an outright disaster.
In the case of Toronto, Canada's largest city in population and the largest urban space in North America in terms of geography, the fiscal catastrophe has coincided with a shift in the centre of political gravity, as the reformist Mayor David Miller leading a centre-left city Council has been replaced by a new right-wing populist mayor and a majority right-wing Council. On October 25th 2010, with just over 50 per cent of the electorate casting votes, the most right-wing Councilor in the previous term, Rob Ford, was elected the new Mayor. He was joined by a new bloc of right-wing Councilors, who all but swept suburban and core ruling class wards across the city.
Political Terrain in Toronto
Three things have become painfully clear in the Toronto political scene. First, the deepening crisis of the capitalist city is shifting into an intensified round of attacks on the poor, city workers and the social infrastructure of the city. This is one of the most important features of how the turn to austerity is being played out in Toronto and across Canada. Second, right-wing populism is increasingly gaining hold in Toronto (as elsewhere), proposing false solutions via cuts and attacks on public services for real problems of declining urban services, higher tax burdens on working class people and precarious employment. Third, the measures being taken by the Ford administration will not solve Toronto's structural fiscal woes. These problems are located in the general contradictions of capitalist urbanism (the increasing need to build urban infrastructure to sustain capitalist accumulation while constraining urban fiscal capacities), the specific crisis of urban planning and policies in Toronto, and a Left that sputters topsy-turvy between community protests but lacks a capacity to shift the political terrain of the local state.
In what follows, I discuss the context leading up to Ford's election, the role that waste disposal has played in Ford's populist agenda, confusion over how to adequately fund public transit, and the proposed cuts to Toronto's budget, most recently evidenced in the City's ‘core services review’ undertaken by KPMG (the major capitalist consulting firm on state restructuring and privatizations). In order to begin resolving the recurring fiscal problems a ‘new deal’ for cities may well be required, but it is difficult to see this emerging without an anti-capitalist political movement to shift the political topography of Toronto politics.
Introducing Toronto's 64th Mayor
Toronto, like other Canadian cities, has long had to deal with inadequate funding arrangements, lack of public reinvestment, the downloading of service provision and growing fiscal pressures amidst increasing need. Given the steady erosion of Toronto's centre-left forces to hold support and respond to the backlash against public sector workers for well over a decade, right-wing populism steadily gained ground and eventually seized the 2010 Toronto Mayoral election. Much like former Ontario Premier Mike Harris' political platform of the mid-90s that drove the provincial turn of Ontario to neoliberalism after the failures of the prior social democratic government, Rob Ford (whose father was a Member of Harris' Conservative government) took advantage of a similar political environment at the city level. Mayor Miller increasingly tacked right and embraced various 'pop' development strategies such as 'creative cities' and 'responsible finance,' and forcing a city workers' strike that shifted the blame on workers as the cause of the fiscal problems.
In contrast, Ford stuck to easily absorbable talking points – tax cuts, less government, public sector reform and enhanced business investment, and rode to power deriding the alleged waste and inefficiency that prevailed at City Hall. In the mindless rhetoric that characterized the campaign, Ford vowed to put an end to the ‘Gravy Train.’ The 2009 civic workers' strike remained fresh in the minds of the electorate as Ford continuously contended that Toronto had become a fiefdom for powerful, monopolistic and uncompetitive unions – themes that the stance of the Miller-led council fed into. Throughout his campaign Ford pledged that he would stand up to Toronto's unions, privatize assets, contract-out services and reduce the financial burden for Torontonians by showing “Respect for the Taxpayer.” These themes, not the bailout of the bankers, tax cuts for the wealthy, and the reckless downloading of services, dominated election coverage. Dubbing his supporters the "Ford Nation," Ford pledged to:
Given Ford's drive to squeeze more and more out of workers, working conditions as well as the quality and viability of city services are rapidly deteriorating. But the crisis and the drive to austerity are hardening neoliberalism. Ford continues on with his mission to privatize as much as possible using the rationale that the budgetary crisis – formed in good part by the freezing of taxes and the declining in fiscal transfers – is caused by a ‘spending problem.’ Toronto has become accustomed to the yearly spectacle of City Hall crunching numbers, unexpected surpluses and shifting out of funds (and emergency injections from the provincial government, from an implicit rejection that the download of services has been an administrative failure). In 2006 the shortfall was $646-million, and in 2010 $821-million. Each ‘crisis’ was resolved without any serious cuts, as various city funds were deployed and the province kicked in emergency funds. In financing his first year in support of a ‘balanced’ operating budget for 2011, Ford used $330-million of the surplus left over by former Mayor Miller, in addition to introducing $23-million in new user fees for 2011. The budget for 2012 is, in a sense, no different, in suffering a structural fiscal shortage due to revenue constraints. Although hard numbers are hard to come by, it is estimated that the actual deficit is closer to $443-million (especially when some of the existing cuts and user fees are incorporated). Ford and his allies, however, have stuck to generating hysteria over what they identify as a $774-million shortfall.
What is certain is that Ford's promise of neither increasing taxes nor cutting services was an utter electoral fantasy. Clearly, urban needs will go unmet and the quality of services will decline, as the contradictions embedded in capitalist urbanization in Toronto deepen. In failing to address the roots of Toronto's fiscal woes, Ford's budgetary hopes are based on radical budgetary cuts, and one-time fiscal injections that seek to turn public assets and services into profitable outlets for private sector capitalists. The purpose of these neoliberal budgetary policies is to transform the nature of government, bolster capitalist profits and disorganize workers. Ford's plan for Toronto's waste collection is particularly revealing.
Privatizing Garbage Collection
It has become fairly common for the business press and right-wing Council members to complain of workers ‘holding the city hostage’ during labour disputes. As Councilor for Etobicoke, Ford used these terms to describe both the 2007 TTC workers strike and the 2009 civic workers strike. Mayor Ford made no secret of the fact that everything was on the table when it came to privatization. His first major stab at privatizing Toronto's public services easily passed when Council voted 32 to 13 on May 17, 2011 to contract out a portion of garbage collection in District 2 (Yonge St. to Etobicoke border), potentially laying off upwards of 300 CUPE Local 416 ‘temporary workers.’
As the Globe and Mail put it:
"During his mayoral bid, Mr. Ford tapped into the wellspring of resentment over that strike to propel himself to victory, and he and other supporters of privatization raised the spectre of it several times... While the day brought some compromise, the Mayor worked from the onset to draw a sharp ideological line among Council members, characterizing his critics as ‘tax-and-spend socialists.’ ‘We are going to divide ourselves up into two groups,’ he said. 'This is going to be very simple for the taxpayers to see.'"3In addition to outsourcing garbage collection, the plan also seeks to increase the number of Litter Vac Operations conducted by private contractors from 12 to 29, contract-out Litter Bin collection within City parks, and supplement curbside residential waste collection by private contractors on a call-out basis.
Sue Ann Levy, the unofficial Toronto Sun mouthpiece for Mayor Ford, sounded the trumpets for ‘class war from above’ when she wrote: “Do they [Rob Ford and city Council] have the intestinal fortitude to take on the union or don't they... competition, I believe, is the only way to give the entitled CUPE unions a good swift kick in the butt and break them out of lethargy.”4 Writing of CUPE's "virtual union monopoly on city trash collection," Levy's hyperbole has done much to make the case for contracting-out and privatization. She is not alone. Matt Gurney from the National Post added: “The excuses must end, the constantly climbing salaries for public sector unions must stop... there is no choice but to rein in public sector wages.”5 The right-wing populism of the Ford Nation, and the reactionary neoliberalism of the business press, has tried to suggest that the City's problems stem from workers' wages and union job controls, with garbage collection being the foremost example.
Two separate studies examining the viability of contracting out waste collection found the City Staff's report recommending garbage privatization to be deficient. For instance, the Toronto Environmental Alliance (TEA) found: “Significant evidence exists that waste diversion has been jeopardized by private waste collectors... City staff have seriously over-estimated the potential savings from privatizing waste collection west of Yonge St. because they have under-estimated monitoring costs.”6 The private contract, worth roughly $250-million over seven years, not only inflates savings by at least $4-million per year, but failed to incorporate in their analysis the danger of ‘put or pay’ provisions. For example, the City of Ottawa signed a 20 year contract with Orgaworld to collect 80,000 tonnes of waste per year at $100 per tonne. However, in 2010 Orgaworld only collected 53,000 tonnes, which meant that the city of Ottawa paid nearly $2.5-million for waste that was uncollected. Should such a clause be implemented in Toronto's case, this could have particularly expensive consequences given Toronto's goal of 70 per cent waste diversion from landfills.
While the Staff report estimated savings in the range of 15-20 per cent or $6 to 8-million annually, the costs associated with monitoring private collection nearly wipes the gains out. As the TEA study showed, the average cost of monitoring contracts for municipalities across North America are about 20 per cent of the total contract value. In the case of Toronto's Public Works and Infrastructure Committee, they have only budgeted for 4.2 per cent of the contract value, despite a 2007 City Auditor report that made a case for enhanced oversight measures to ensure compliance with city policy and procedures.7 In fact, as recently as 2009 two private collectors, Orgaworld and Halton Recycling, violated Toronto's standards when they dumped recyclables and organic materials in a landfill to cut costs. In 2006, after nearly a decade, Toronto voted to bring privatized waste collection in the former city of York back in-house, which saved the city of Toronto nearly $4-million annually, precisely because of some of these monitoring costs and overruns.
Forensic accountants Rosen & Associates also found the Staff report inadequate. They suggested that the $6 to 8-million estimated annual savings rely on two factors: cheaper labour costs and cheaper per tonnage waste collection. They warned:
"In our opinion, the financial analysis that has apparently been relied upon to date, and the decision-making process for the proposed contracting out of waste collection, is seriously flawed and grossly inadequate... Simply stated, the Staff's cost efficiencies of contracting out would have to be labeled ‘fictional.’ Available facts do not support Staff's claims. Claims of cost savings could easily become additional costs for contracting out."9
For instance, the City Staff report assumes that the lower labour costs for the private contractor (in the area of 15-20 per cent) would automatically translate into savings for the City. What City Staff failed to incorporate was the extra costs associated with equipment, overhead, and most importantly, profit margins. This still leaves out the potential costs of monitoring and ‘put or pay provisions.’ When considering profit margins alone, the Rosen & Associates analysis shows that the average profitability of waste management services is in the range of 13-18 per cent. The costs of ensuring profits alone (which the Staff report inadequately considers), wipes out a majority of any prospective savings! A profit-adjusted analysis yields a much different result than that prepared by city staff.9
Moreover, the City Staff report misleadingly compares collection costs in District 1 (Etobicoke) with District 2 (Yonge St. to Etobicoke). Differing demographics, such as the mix of residential properties, population density, on-street parking, narrower streets and traffic patterns, among other concerns, makes such a comparison inappropriate. “The building types (primarily single-detached homes) in District 4 (Scarborough city-employee collection) are more comparable to District 1, and the collection costs are likewise similar for Districts 1 and 4.”10 Likewise, there is also the question of what would happen to the excess fleet. In one scenario, the report argues that should excess fleet go to auction and be bought by the company responsible for the newly privatized waste pickup. This should be counted as a financial subsidy as the private operator would have paid a fraction of their original worth. To conclude, Rosen & Associates found the “Staff's analysis superficial, incomplete and unrealistic. More data, and conceptually-sound comparisons, are required.”11
Killing Transit City
The Organization for Economic Co-operation and Development (OECD) recently estimated that Toronto loses upwards of $3.3-billion annually due to traffic congestion, while the average 80 minute daily work commute fared second worst among 20 international cities.12 Repairing and expanding Toronto's faltering public transit system has been long postponed. Despite a TTC budget facing a $2.3-billion shortfall over the next 10 years (needed to replace aging fleet, undertake repairs and improve access13), Ford's ad hoc plans for public transit are deeply flawed, without any serious concern for long-term transit and land-use planning, and appealing to the worst prejudices of suburban car owners. The focus on scrapping a number of LRT lines in favour of a few subway lines (using the same $8-billion in capital funds from other governments) was meant to symbolize an end to the ‘war on the car,’ as well as express frustration with ever-lengthening commute times.
While appearing as a radical attack on Miller's Transit City, it also reflected the fact that Transit City itself emerged from the radical compromise that Miller and his centre-left Council had made to fiscal constraints, downloading of public transit funding to the city, and abandonment of land-use and transit planning to the developers. LRTs were the best that could be afforded in the circumstances, and fifty years of transit plans for building the necessary subways to carry growing numbers of commuters in planned dense corridors had to be abandoned in the process. In a sense, one neoliberal transit plan was succeeded by another. As a result, traffic congestion in Toronto can be expected to continue to be the worst in North America, and public transit quality, capacity and ticket prices can be expected to continue to fall behind the world's leading networks.
Highly partisan research defending the shriveled public ambitions of Transit City from the Pembina Institute and the Toronto Environmental Alliance/TTC Riders, suggest that in particular circumstances (essentially where low-density populations exists and there is no plans to use land-use planning to increase them), LRTs are likely to be more cost-effective, frequent, reliable, and rapid.14 The costs of the Ford plan are considerable:
If killing Transit City has been the most visible of Ford's restructuring of city services, it was not his most comprehensive. In Spring 2011, Ford and a $3-million team of “gravy sniffing” consultants undertook a six month “Core Services Review” that could radically revamp the contours of public services.15 In addition to in-person and online consultations, the review panel sought to determine where the axe should fall in severing city services and assets. The City will also undertake a “service efficiency study” to find where improvements in economic performance can be made, as well as a user-fee review exploring whether the city could raise the more than 1,000 different fees it collects to the tune of $1.4-billion.16 Across his entire political career, Ford has argued for turning public goods and services into profitable investments for the private sector, under the veil of greater innovation and efficiency.
In the Core Services Review undertaken by KPMG (all eight of the core services reports can be found here), a catalogue of suggestions for cuts to the City of Toronto budget were put forward:
It should be stressed that the KPMG reports rely on presumed savings: in other words, ‘assumptions’ based on contradictory and selective evidence. The KPMG reports do not uncover any real ‘savings,’ in the sense of efficiencies in delivering the same level of services. All the ‘savings’ come at the cost of service levels, redistribution, access or quality.
This has been a recurrent consequence of the neoliberal public administration that KPMG advocates (and in which they gain by first advocating the cuts and then coming in to help administer the services just cut and privatized!).
Still, the City of Toronto recently announced it was offering some 50,000 workers a buyout. Writing in the Globe and Mail, columnist Andrew Steele presented one potential scenario from such a blanket, unthinking administrative measure: “Imagine if the vast majority of the dynamic IT staff at the city decided to take packages and move to offers in the financial services industry. In a couple months, the city would see increased problems with websites, system reliability and telephony. More expensive consultants could fill the gap until permanent staff were lured to join with incentivized pay packages and bonusing. Not only are the original cuts growing back, but they are higher-cost people in the same job. Quickly, the cure becomes more expensive than the disease. Haphazard cutting never lasts.” This has been a recurrent consequence of the neoliberal public administration that KPMG advocates (and in which they gain by first advocating the cuts and then coming in to help administer the services just cut and privatized!).
A range of commentators have made similar observations, with even cracks appearing in the right-wing media that has backed Ford and the austerity agenda. As one put it, Rob Ford's fiscal agenda has been exposed as a “canard, a massive con job.” Another finds KPMG's report offering “lots of bone and almost no fat.” Even the National Post, a refuge for all things neoliberal, was forced to admit that Ford's campaign mantra is running out of gas, even conceding that Ford's declaration of “$50-million to $100-million” in savings as a result of KPMG's report was “mythical” from the beginning. As Christopher Hume has written: “Throw in enough charts, footnotes, acronyms and, best of all, 'a core continuum,' and the whole thing starts to feel more like a formal economic exercise than an ideological intervention, pure and simple.” Indeed, the KPMG report completely underplays its own results that found that 60 per cent of the 13,000 respondents to a city core review online survey said they would be willing to pay a 5 per cent increase in property tax to maintain current service levels, especially in light of the fact that Toronto enjoys the lowest property tax rates in the Greater Toronto Area.
Much headway has been made in the commercialization and privatization of City services apart from the Core Services Review. Toronto Council, for instance, passed a new initiative that would sell advertising space on the city's transit system, including naming rights for subway lines and stations, for $324-million over 12-years. They've also moved to eliminate police station cleaners with CUPE Local 79 and 416. This latest move was particularly backhanded, as Ford at the same time awarded the Toronto Police Association a significant 11.5 per cent wage increase over four years adding as much as $80 million to the city's bottom line.18 Taking into consideration the ballooning costs of Toronto's police services, and despite already being the highest paid officers in the country, such an act clearly demonstrates the law and order agenda that has been integral to Ford's populism, even at the expense of his own alleged fiscal prudence. Just as at other levels of government delivering austerity, urban neoliberalism under Ford does not necessarily mean less state, but a particular kind of local state.
Against the Ford Cuts
The problems of Toronto's current budgetary impasse are not unique to the Ford administration. But Ford's own contribution to its making is not without important political implications. For instance, the budget could have been immediately offset if Council reversed some of the revenue streams Ford cut in coming into office; raised property taxes, say, for households worth over $500,000; and similarly raised graduated levy's on major corporations and other businesses operating in the city. More substantive funding arrangements would require larger fiscal measures to address the city's revenue problem. Former Mayor Miller tried to do some of that in establishing an Independent Fiscal Review Panel some years ago. The key difference between Miller's Fiscal Review Panel and Ford's Core Services Review is that while the former acknowledged decades of provincial and federal downloading without matching fiscal supports, the latter has only sought to cut services and increase use of private sector delivery. Unlike the analytical rubbish underpinning the KPMG reports, the Fiscal Review Panel refuted the myth that City workers were over-compensated with a median salary of just over $40,000.
The Fiscal Review Panel addressed the structural problems of funding Canadian cities. They argued that Canada needed a ‘new deal’ to improve funding for cities, particularly the large urban centres like Toronto. With 40 per cent of federal investments in cities set to expire in 2014 (due to the end of infrastructure funds), Toronto and other cities need to secure higher levels of funding and cost-shared arrangements for social services and public infrastructure from provincial and federal governments. There is a need to establish a national cities policy, particularly for infrastructure, water, waste, sewage, transit systems, and extending to childcare and urban parks and recreation. With an Ontario provincial election a few months away, Toronto's fiscal woes (like other municipalities in Ontario) need to be turned into a central issue.
The embrace of the austerity agenda by Ford and the other levels of government in Canada make such a ‘new deal’ politically remote. Indeed, whatever is the economic crisis of neoliberalism, the policy framework of neoliberalism is being remade to worsen the worst features of Toronto's fiscal and urban crisis. For example, the Ford administration is seeking to undermine public sector unionism in Toronto, precisely because Toronto has been – and remains – one of the centres of North American unionism and class struggle. This is why Ford is being so aggressive with respect to layoffs, cuts in services, selling off assets and so forth. He has the support of Toronto and Canada's ruling classes. Mayor Ford and his political and corporate allies are preparing to do battle with CUPE Toronto's ‘Big 6’ unions, whose contracts set to expire December 31, 2011. These contract negotiations, as much as the Core Services Review, will be the test of the Ford agenda and whether the right-wing can consolidate their hold over Council. There are some important union-community initiatives happening in Toronto. The most notable of these are the ones located in the union movement: the CUPE Local 79 and 416 campaigns for public services, Toronto Hydro workers fight against privatization, Toronto and York Region Labour Council support campaign, and the Good Jobs For All Coalition. There are also community and other initiatives such as One Toronto, Ontario Coalition Against Poverty, Stop the Cuts, the TEA led efforts around waste privatization and TTC cuts, and the Greater Toronto Workers' Assembly efforts around transit and public sector union support.
There needs to be more thinking about anti-capitalist – that is, socialist – urban alternatives unencumbered by the structural limitations and market imperatives imposed by capitalism.
But these important efforts have yet to capture the public imagination and gain widespread traction. They offer little – and in most cases nothing – in the way of mass educative and communicative capacities to overturn the drumbeats of right-wing populism. Thus Ford continues to have high approval ratings,19 even if recent missteps are dulling his shine.20 The political vacuum in the local state created by the vacation of the centre-left Miller Council has yet to be filled. It is not clear that the moral outrages at the cuts that have been the dominant political response of various communities will lead organizationally to anything more.
In any case, any short-term resolution to Toronto's fiscal problems cannot overcome the contradictions of the capitalist city. A long period of stagnation will heighten the urban crisis, and poorly-funded central cities like Toronto will continue their social polarization and decline. The political coalitions that have been thrown up in Toronto to fight cuts over the last two decades have done nothing to reverse these processes. There needs to be more thinking about anti-capitalist – that is, socialist – urban alternatives unencumbered by the structural limitations and market imperatives imposed by capitalism. Some important initiatives such as the Right to the City21 are opening up such questions. But only new organizational capacities will make such ideas viable. Toronto workers have a tough few years ahead.
Carlo Fanelli is a PhD candidate at Carleton University and member of CUPE 4600.
Reprinted with permission of the author from The Bullet.
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