September 19, 2011

Does the city of Ottawa's new broom sweep clean?

The City of Ottawa is seeing some changes. Jim Watson's mayoralty has been quite a shift in style from the days of Larry O'Brien, whom he defeated. And the comparison is not just to O'Brien.

Typically, the city’s budget process has been a marathon, with all kinds of civil society and other interest groups mobilizing forces, attending hearings, and buttonholing councillors.  Those days, it appears, are past. Watson quietly got Council to put through a budget with a 2.45% property tax hike.  Watson likes to play things close to the vest and to operate informally to get his way.  He is very good at it, both with Council and with various segments of the community.

Some of what he has accomplished is positive. In May, Council approved $14 million for housing and poverty reduction.  Of that amount, $4 million is to expand the supply of social housing.  The rest is for such things as payment of rental and heating arrears to prevent loss of housing, assisting the homeless to obtain accommodations, and repairing run-down social housing.  Is that good enough?

While the results may be an improvement over O’Brien’s performance, all is not rosy.  The low and moderate income citizen group ACORN approached Council with a proposal to have the City require that all businesses contracting with the City provide a living wage of $13.50 an hour minimum.  The ACORN proposal has been adopted in New Westminster and Esquimault.  Since most people on low incomes get their incomes from working, this move would be a small but positive way to fight poverty.  Watson is not on board with this proposal.

During the last election campaign, Watson, in line with his approach to governing by schmoozing, charged that O’Brien was trying to introduce political parties into city politics.  Well, parties could be a healthy addition, if they are based on policy rather than on personalities.  After all, not all mayors are going to be great schmoozers. Someone once remarked that the business of municipal politics boils down to who makes how much off of what piece of property.  Schmoozing perpetuates the kind of horse trading politics where that definition gets its wings.  Municipal political parties could provide a broader focus.  

Taxation policy is another area where Watson falls short.  He campaigned on a promise to limit the increase in property taxes, a promise which he has kept so far.  Unfortunately, property taxes are the major source of municipal revenue in Ontario.  There are also provincial grants in amounts determined by Queen’s Park.  These and other miscellaneous sources fall short of meeting the real needs of cities.  Currently Toronto is engaged in a budget-balancing exercise that could see major service cuts, including libraries.

An alternative form of taxation, the income tax, would avoid many of the serious problems with the property tax.  It would be based on ability to pay and would not threaten the elderly who are house-rich and money-poor with loss of their homes.  Unfortunately, Ontario does not permit municipalities to levy an income tax, a form of taxation common in the United States and Europe.  Watson opposes the municipal income tax.  He is apparently satisfied with property taxes.  In the meantime, Ottawa struggles to deal with problems with infrastructure and with maintenance and enhancing soft services such as community centres and recreation programs. 

Councillor Peter Hume moved in Council to have the City do a study to determine if a .municipal income tax would be to Ottawa’s advantage.  Were it found to be desirable, then Ottawa could lobby Queen’s Park to permit municipalities to levy such a tax and could send copies of the results to all Ontario municipalities.  He withdrew his motion when Councillor Marianne Wilkinson moved a substitute motion, that Ottawa ask the Association of Municipalities of Ontario (AMO) to undertake such a study.  Her motion passed.

In a strange twist, Hume has failed to respond to requests that he have the motion shared with all Ontario municipalities.  Any action by the Ontario government on this issue will require broad pressure.  Hume’s failure to act is especially puzzling because he is president of AMO.