How Toronto Has Fared as One Big City

Commentary, Frontier Centre, Local Government, Role of Government, Taxation, Worth A Look

Ten years ago, six municipalities were merged to create today’s Toronto. There are those who still believe amalgamation damaged the city, while others say it will take more time before the benefits are realized.

The late urban guru Jane Jacobs always seemed to have the soothsayer’s knack for predicting when public policy would ruin a city.

On Feb. 3, 1997, she warned an all-party committee at Queen’s Park against folding together the six cities that today make up Toronto.

“Respect for difference in neighbourhoods is essential,” she said. “Megacity bureaucracies cannot respond with this kind of pinpoint accuracy. It defies common sense to inflict on the citizens and businesses a government that is less responsive than what they have now.”

Was Ms. Jacobs right? Did amalgamation wreck Toronto and the former municipalities of East York, Etobicoke, North York, Scarborough and York?

Jan. 1 is the 10th anniversary of amalgamation. And while it’s clear the amalgamated government is not an unqualified disaster, it is also not the lean, efficient polity of which its supporters dreamed. The megacity has not lived up to the hype.

Promised savings of $300-million per year never materialized. Staff is up, not down. The city employs 4,015 more people today than it did in 1998.

The people of modern Toronto have not gelled. The former suburbs and their poorer residents are increasingly shut out of the bounty downtown, according to a University of Toronto study released this month.

“All the attention and all the money, it seems to be focused more on downtown Toronto,” says Toronto City Councillor Frances Nunziata, who was the last mayor of York. “Unfortunately, in the suburbs like York and Etobicoke, the revitalization is not happening.”

Even the city’s top bureaucrat, Shirley Hoy, readily admits Torontonians feel cut off from the megacity’s council and the colossal bureaucracy that buttresses it.

“I know that citizens feel disconnected from their government,” Ms. Hoy, the city manager, says. “I think there is a sense that easy access to city government, as well as meaningful engagement of citizens in issues like planning … they feel we don’t have the effective structures in place yet.”

Mayor David Miller, the megacity’s second boss, sees problems, too.

“Amalgamation was rushed. It was based on the wrong idea that there were going to be massive savings,” he said. “It was done against the will of people. Oh, and there was downloading at the same time and a tax freeze. You add those things all up, it was a recipe for chaos and that’s what ensued.”

He also sees the positive side of amalgamation. Toronto can enact sweeping policies and make city-wide planning decisions that would never have made it through six governments.

Its government is larger than that of many provinces. It is the fifth-largest city in North America, behind only Mexico City, New York, Los Angeles and Chicago. That makes it more influential economically and on the world stage.

“I think we’ve now turned the corner,” Mr. Miller says. “The kind of voice I have on the national stage wouldn’t have happened pre-amalgamation.”

Amalgamation has also helped some of the poorer pockets of the modern city.

Even Ms. Nunziata, who complains that downtown is soaking the suburbs, concedes the former city of York could never have afforded the new $25-million community centre that is supposed to open at Eglinton Avenue West and Black Creek Drive in 2009. Taxes from the wealthier parts of the city will help pay for that.

When Mike Harris’s Conservative government first pitched the one-city vision at the end of 1996, Toronto already had a long history of amalgamations.

In 1953, the province created the Metro level of government, although politicians were not directly elected to it. Thirteen municipalities thrived under its umbrella: the City of Toronto; the townships of York, Etobicoke, Scarborough, North York and East York; the towns of Weston, Mimico, New Toronto, Lea-side; and the villages of Forest Hill, Swansea and Long Branch.

In 1967, the 13 municipalities were consolidated into the six cities that preceded the megacity. Councillors were directly elected to sit on Metro council.

Al Leach, the former Conservative municipal affairs minister who created the megacity, argues this history lesson is important to understanding the provincial government’s decision to create a single city.

“The amalgamation was just a step in the evolutionary process,” Mr. Leach said in a phone interview from Florida.

Still, that was hardly the only reason the Conservatives backed amalgamation. The merger was supposed to end duplication, cut waste, save money and reduce staff.

The fire, parks and transportation departments, for example, would be reduced from six or seven to one. The number of elected politicians would be reduced from 106 to 58, then to 45.

A study by the accounting firm KPMG in late 1996 foretold hefty savings from amalgamating Metro and the six cities. It predicted the move would save $865-million in the first three years, after transition costs, then $300-million every year after that, largely by eliminating thousands of jobs and finding efficiencies.

”I tell you that was totally fallacious,” says Alan Tonks, the last chairman of Metro council and head of the transition team that melded the seven governments together.

“We always challenged that in the first place because we tried to indicate to the province that the savings had actually been extracted over the 50-odd years of Metropolitan council.”

Mr. Tonks, now a Liberal MP, was right. Amalgamation did not save nearly as much as forecast.

A status report looking at the first three years of amalgamation — the last report of its kind the city produced — found savings of $136.2-million on tax-supported programs, or $305-million in total savings from 1998 to the end of 2000, could be directly attributed to amalgamation.

The new city had cut 1,935 jobs or 8.8% of its workforce by the end of 2000, but it was not long before the savings evaporated and the workforce expanded. Today, Toronto has 4,015 more staff positions than it did a decade ago, the vast majority for the TTC, police and social programs, whose costs the city shares with the province. Staff positions are still down in administration and basic municipal services by about 10%.

Mr. Tonks and others say there were major flaws in KPMG’s forecast: It didn’t take into account that most big-ticket items like Toronto police and the TTC were already under the auspices of Metro. With only 27% of programs actually merging, there were few places to squeeze for efficiencies.

The study also failed to anticipate a spike in wages, Mr. Tonks says.

Amalgamation reduced from 56 to six the number of collective agreements in the city. Organized labour demanded, and usually won, the highest wages and choicest benefits packages of the six municipalities.

The case of the fire departments illustrates why amalgamation did not save as much money as expected.

Megacity supporters threw the example around often in 1997: Dropping from six fire chiefs and six fire bureaucracies to one would save cash, they said. But when the city set out to harmonize wages, an arbitrator in 2001 forced the city to pay the top-shelf wage of the most generous municipality. So although there are seven fewer staff overall in the fire department today, its budget, which is comprised almost entirely of salaries, has increased $122-million or 55% since 1997.

It is hard to pinpoint who or what is to blame for amalgamation’s shortcomings.

The truth is complicated by the realignment of responsibility for programs paid for by the province and the city, which the province executed at the same time; Mr. Leach concedes now that his government should not have tried to force amalgamation at the same time it downloaded the costs of social services to cities and uploaded the costs of education.

Councillor Doug Holyday, the last mayor of Etobicoke, says the first megacity council and its successors bungled the opportunity to save more money.

“[Amalgamation] hasn’t worked the way I thought it would or should have worked,” he said. “The province is partly to blame because they didn’t put enough controls in place to make sure it would run right. And certainly, the councillors elected, they had no concept of fiscal responsibility, in my opinion.”

Mr. Leach also says the city squandered the opportunities amalgamation provided, largely because local politicians were too busy blaming Mike Harris for their problems.

“They had this built-in scapegoat where they could do whatever they pleased and just dump the blame back on somebody else,” Mr. Leach says. “But as time goes on, as the years go on, the amalgamation will be forgotten and it will be one city.”