Friday, 16 September 2011

Responding to Ford-KPMG Talking Points

The upcoming Executive Committee meeting on the recommended KPMG service cuts will be well-attended and watched. Questions remain as to whether it will be as dramatic and eventful as the 'Citizen's Filibuster' in July and whether councillors like Jaye Robinson and Michelle Berardinetti will defect and vote against the report. One thing that we do know is the type of arguments Team Ford will employ to further their agenda. In the spirit of CodeBlueTO's  excellent Spacing article on arguments against Waterfront Toronto I've compiled the KPMG list below to provide my own humble bit. Reading some of Matt Elliott's old posts was a great help in this, so a hat tip to Ford for Toronto

1) "Toronto has a massive $774 million deficit. This needs to be solved".
This is an oft-repeated refrain that has been cited by most media sources and officials. 

Toronto does have a deficit, and its starting point was indeed $774 million. As happens each year, Toronto starts with a very high deficit and whittles it down, which Edward Keenan explains nicely at The Grid. The idea that this particular starting point is a 'tsunami' is misleading as it tracks with previous years pretty closely. Matt Elliott, writer of the superlative blog Ford For Toronto put together the nifty chart below:
In fact, $774 million isn't really the number we should be talking about as Elliott explains in that excellent post. Instead, we should conservatively be talking about a $530 million deficit. Other people have pegged the number much lower, such as left-wing councillor Gord Perks and Rob Ford's former Chief of Staff Nick Kouvalis (August 28 on The City) have pointed to a number closer to $300-$450 million (Kouvalis later recanted this on Twitter, oddly claiming he meant this in addition to the starting point). 

$530 million is conservatively the more accurate number we're dealing with at this time and using the $774 million is an effort to increase political leverage to make unpopular cuts. 

2) "We've inherited this mess from the out-of-control Miller regime. We're the only ones willing to talk about the problems we face". 
For all of the promise of accountability and responsibility coming from Team Ford, this is a frequent line. 

As suggested in the chart above, Toronto has endured large annual structural deficits since amalgamation. During the mayoral campaign Ford frequently pointed this out and criticized the Miller administration for only thinking of the year at hand. 

Yet in the first budget for Team Ford, Frances Nunziata- presumably on orders from the mayor's office- refused to allow mention of the 2012 budget. As Sean Meagher pointed out in his Citizen's Filibuster deputation, if Team Ford had planned ahead for the 2012 budget in the previous budget it would have had the lowest deficit starting point in almost a decade. 

But council was forbidden from talking about or planning for this year's budget-that-must-not-be-named. Now that it's here, The Voldemort Budget is-surprise- scary. All of that money from keeping the Vehicle Registration Tax and having an inflation-based property tax increase (which would just maintain levels, as this Spacing article explains) would be enough to pay for all of the KPMG recommended cuts. Even the Christmas bureau. 

David Miller left a $350 million surplus. By refusing to plan for 2012, Team Ford owns this budget and has turned what could have been a very manageable budget-that-must-not-be-named into a Voldemort Budget of heartless cuts.    

3) "Either we do these cuts or we face a 35% property tax increase. Some downtown NDP councillors want to do this, but I don't".
Rob Ford mentioned a few variations of this line of attack in his interview with Jerry Agar

The 35% property tax increase number comes from the Toronto Taxpayers Coalition (tacitly endorsed by Doug Ford, Sue-Ann Levy and Michael Coren, oh my!). The TTC that's not really the TTC based this number on the $22 million generated for every 1% increase in property taxes. Using the faulty $774 million number covered in number one here, you get 35%.

This is a completely unreasonable number. The number excludes any further funding sources for the city (land transfer tax, user fees, dividends from assets etc...), surplus money left over from the previous budget ($88 million) and actual honest-to-goodness efficiencies that departments can find to cut their budget. The number is also politically unfeasible and acts only as a scare tactic. 

Furthermore, no councillor has supported raising property taxes by this amount and I haven't seen any activist, journalist or deputant support it either. 

Saying 'either we make these cuts or raise property taxes 35%' is a disingenuous false dichotomy that uses a false number for cynical politics.

4) "We're being taxed to death in Toronto. This has got to stop". 
Rob Ford has essentially ruled out any property tax increase greater than 2.5% (he wants 2%) and feels taxpayers are unduly burdened. 

Toronto has significantly lower property taxes than comparable Ontario cities. While Toronto has a 0.79% property tax rate, Mississauga's is 0.96%, Ottawa's is 1.25% and Hamilton's is 1.48%. 

Additionally, Toronto offers more services than these cities and pretty efficiently as the KPMG report indicated. Within the KPMG report the lowest ranked policy priority from citizens was 'affordable taxes' (page four), so the idea that this is being demanded by citizens is contradicted by the report the mayor is relying on. 

Lastly, there's a secondary concern in having very low taxes. When the city goes to arbitration- as it soon will with the TTC in a very expensive process- the city will argue that it doesn't have the financial capacity to extend salaries in the manner the union wants. The arbitrator will then say, 'but you have extremely low property taxes compared to your comparables and recently cancelled a tax just granted to you by the province. You clearly have more capacity, and should pay accordingly'.

Toronto is not being taxed to death- far from it. This isn't to say taxes should be at Hamilton rates, but that there is public willingness and an economic argument to raise taxes reasonably. 

5) These aren't really cuts, they're efficiencies. 
Rob Ford said no service cuts. Guaranteed. He promised efficiencies and doggone it, that's what these are. 

While Ford's lead spokesperson acknowledged service cuts in a talking points memo to allies recently, the mayor has refused to do so. In the Jerry Agar interview yesterday, Ford was asked whether cutting 2000 daycare spots was a service cut. His response? "No, it's an efficiency. There are no service cuts." 

Someone on the Toronto subReddit made the appropriate analogy that it would be akin to saying cutting off three of your fingers makes your hand more efficient. This line is utter nonsense. Potentially cancelling the blue night bus? Service cut. Eliminating 2000 daycare spots? Service cut. Reducing snow shoveling, street sweeping, horticulture, getting rid of the Christmas bureau, reducing wheel trans, eliminating libraries or reducing hours? Those are service cuts. 

Importantly, Rob Ford told the National Post's Natalie Alcoba and Chris Selley that closing one library on a Sunday would be a 'major' service cut

Efficiencies are when you have the same service delivered at a lower price or increased services delivered at the same price (or better value, dollar for dollar). That is not the case here.

These aren't really efficiencies, they're cuts. 

6) "There's lots of gravy. Just look at all of these unionized city employees. How come we have more than at the start of amalgamation? We should have less."
This is a relatively new line of attack and the strategy is to position your tax dollars against the disliked unions. 

In 2000, Toronto had 2.4 million citizens and 45,000 employees according to this budget (page 3).   

In 2010, Toronto had 2.77 million people and 46,228 employees according to this city document. Granted, the number of employees has been low at various points- it was 40,000 in 2006- but it's hardly out of control like this claim suggests. 

And it does bring up another Ford campaign pledge, that he wouldn't fire staff but would finance his budgets through a managed 3% attrition rate

This wasn't the 'gravy' Rob Ford promised, in fact he promised to not fire anyone. City employee growth tracks reasonably well with population growth which makes Ford's claim less meaningful. 

7) "The People complaining are just the Usual Suspects, Unionists, Socialists or Jobless. They don't speak for the city."
"There are 2.5 million people in this city and we've heard from about 400 individuals over the process of consultation. Letting them say which programs they would like to keep and which ones they don't want to keep for 2.5 million people, to me that doesn't make sense." -Giorgio Mammoliti to Inside Toronto

While Team Ford simultaneously says that they've done historic consultation, staying up all night listening to people, they also dismiss them out of hand as having unrepresentative voices. 

Aside from the fact that activists, unionists, socialists and the unemployed are also Torontonians who have a valid voice and contribution to make to the discourse, this line of argument is also untrue. Anyone who was there at the Citizen's Filibuster knows that the day was not just remarkable for its length, but the diversity of people and causes who were there. 

Another argument ties in to this one, that 'these people' are just out their to protect their own self-interests. In a way, that's true- they feel invested in their community and value services provided for it. Much like, say, some people might be self-interested and value having a lower property tax rate. After all, in the Habermas vein, that's what politics is about. 

What's really going on with this is an attempt to categorize the opposition into a caricature and devalue that voice so as to ignore it. And really, that's undemocratic.

 This argument ignores the reality of the diversity of people speaking out, is anti-consultation and cheapens the political institutions the mayor's office is supposed to uphold. 

8) "Why are we in the business of running zoos and theatres? It's about wants and needs. When we ask people 'what do you need', it's not running a zoo". 
This argument suggests we need to re-prioritize and have a paradigm shift (ugh, that phrase) in how we think of government. 

This is a somewhat reasonable argument. It's important to re-assess the role of government to make sure it's on track. We should force ourselves to re-think what the status quo could be too. 

However, for that to be done, a simultaneous efficiency and value study has to be conducted to find out what those priorities are. People have to be genuinely asked and listened to for what they need so that subsidized dental care for the poor can be evaluated from both the citizen's and a 'business' perspective. 

This was not done. The scope of the KMPG report was explicitly limited to discovering what could legally be cut and giving limited recommendations. The value the city gets from the services it delivers (the intangible benefits of the arts, say) was not considered. The limited consultation that was conducted was dismissed as 'not statistically valid' by Ford ally Denzil Minnan-Wong. 

Wants and needs cannot be determined until you find the value of each service in consultation with citizens.

9) "We need to run this city like a business. I'm going to do that."
With his experience at Deco Labels, Rob Ford positions himself as the man with the knowledge to get things done at City Hall. 

I'm not going to cast aspersion on Ford's experience at Deco Labels, but I don't think his 'business strategy' is right for the city. 

I work in business too. Businesses conduct thorough cost-benefit analyses to make prudent short and long-term decisions to optimize profit and limit risk appropriately given their profile. That means they invest in themselves and cut sometimes and most of the time they're doing a combination of both. 

However, this mayor is so idelogically opposed to the idea of government that he is unwilling to look at ways for the city to invest in itself. So the argument of how arts funding spurs a multiplier effect of city benefits falls on deaf ears. Good businesses are open-minded, think creatively and plan for contingencies. They look at the market for the cost of debt- interest rates- to see whether they can get capital at cheaper rates than the returns they generate. With interest levels at record lows, cities with business savvy and good AA+ credit ratings like Toronto can see that as an opportunity for wise investment and measured growth.  

Good businesses do not exclusively cut. They grow because they believe in themselves.

If the city must be compared to a business, it's one that should rightly face a shareholder revolt for not finding value. 

10) "This is the City Manager's report, not ours. We're just following staff."
We're just responding to data and acting accordingly. Why are you making this all political?

Ah, the age-old 'we're just following the wishes of staff' argument. It's a great argument because councillors are not really allowed to criticize staff- Joe Mihevc drew some 'ohhhhhs' when he criticized Pennachetti for producing the Waterfront Toronto-TPLC report. 

The thing is, everyone knows staff are influenced by political pressure and the mayor's office in particular. To think otherwise is just naive.

City staff aren't immune to political pressure. 

Team Ford will give lots of reasons to justify their actions including some of the above. Many of them are demonstrably false or shallow arguments and should be treated accordingly. 

Note: An earlier version of this article stated Matt Blackett wrote the Spacing article with arguments against the proposed Waterfront-TPLC changes. This was written by CodeBlueTO and the article has been edited to reflect this. Apologies for the error and thanks to Matt Elliott for pointing it out. 


  1. Thank you, this will come in handy (with credit given!) as I write my deputation for Monday. Fine work, sir.

  2. Agreed. Important and timely work as we head into a crucial week at Ex Comm and Council. More reality checks more often! Opinions based on facts are one thing, but it seems we are facing a concerted campaign of disinformation, well beyond the typical levels of political spin. Very bad for our health.