Cities need the power to think big and innovate

Christopher Hume, who writes about architecture and city culture for the Toronto Star, takes another shot at our Canadian complacency and our institutionalized bias against cities: Toronto: A metaphor for a country in decline. This isn’t his first — there was Time for Toronto to get angry on July 19; and How do you spell creative bankruptcy? R-O-U-N-D-H-O-U-S-E on June 16.

Among other things, Hume writes in today’s column:

Toronto, like all of Canada, is based largely on myths that border on lies. We like to think that the city is among the greatest and the country a respected world citizen. We may be a middling power, but always sensible and responsible.

In fact, we grow increasingly irrelevant. And although Canada still ranks among the most desirable places on the planet, by any measure – productivity, innovation, wealth creation, education, environmental integrity, tolerance – we are slipping. This was confirmed most recently by the Conference Board of Canada in a massive three-volume report that took three years to prepare.

Like all Canadian cities, Toronto is chronically and systemically underfunded. This is built into the very governance structure of the nation, which undervalues urban centres. We have set it up that way.

Toronto isn’t just Canada’s largest and most important city; it has become a metaphor for a country in decline. Our administratively burdened federation has reached a point of fragmentation where the premiers fail miserably when it comes to dealing with the most urgent issue facing us and the rest of the planet: global warming. This isn’t just worrisome, it’s immoral.

Because they fear reality, Canadians are terrified of change. The idea of reducing the role of the provinces and empowering cities isn’t taken seriously. Yet it’s something that must happen if we are to achieve the nimbleness we need to keep up with the wholesale transformation of Asia and Europe.

Instead, we grow slow and complacent, content to rely on resource exploitation rather than the value-added approach of leading economies.

In the meantime, we continue to demand European-style public services on American-level taxes.

As we Torontonians are finding out, it doesn’t work that way.

This is all so true, and it holds not just for Toronto — after all, we always knew they were smug! The charge of complacency and misplaced self-esteem in orbit could be leveled at quite a few cities.

And in the past I’ve made similar points about Victoria, more recently also basing my comments (as does Hume) on the Conference Board of Canada’s report.

Last March (2006), I wrote an article on my now-defunct wiki called Natural Capitalism and cities, using as jumping off point the Lovins’s & Hawken’s observation (on p.164 of the book Natural Capitalism), which I quoted:

Taxes and subsidies are, in essence, a form of information. At the most basic level, they cause change. Everybody in the world, whether rich or poor, acts on price information every day. Taxes make something more expensive to buy, subsidies artificially lower prices. Thus, when something is taxed, you tend to buy less of it, and when you subsidize, you reduce prices and stimulate consumption. A practical step in moving toward radical resource productivity would be to shift taxes away from labor and income, and toward pollution, waste, carbon fuels, and resource exploitation, all of which are presently subsidized. For every dollar of taxation that is added to the cost of resources or waste, one dollar is removed from taxes on labor and capital formation. (Source: Paul Hawken, Amory Lovins, and L.Hunter Lovins, Natural Capitalism: Creating the Next Industrial Revolution, p.164.)

I noted that in Canada, the tax structure benefits the provinces and the feds, but not the cities:

In Canada, consumers pay a provincial sales tax (PST) as well as a goods and services tax (GST). In BC, they add up to 14% together. [Edit/update: it’s now at 13% — GST went down 1% under Stephen Harper.] But when I hire a carpenter to fix my doors (and pay a GST for his services) or when I buy a pair of shoes (and pay PST and GST), none of those tax revenues flow directly to the community I paid the taxes in. It doesn’t matter if I shop in Victoria (or buy services where I live, in Victoria), or if I spend my money elsewhere. My consumption doesn’t figure into the locale, from a consumer tax p.o.v. The cities don’t get to collect any of the consumption taxes (PST or GST) — they go to the province or to the feds, but not to the cities, which are expected to pay for infrastructure, etc., through property taxes, and to beg, hat in hand at the various provincial or federal ministries’ doors, for funds.

Obviously, a city can’t keep paying for everything by taxing property and business owners to the hilt. We could use some new information via tax reform. (See Victoria City Style Council wiki, Natural Capitalism andCities.)

This is one example of the sort of fiscal tutelage the provinces and feds exert over the cities: it’s as though cities are not even adolescent yet, and are given a small allowance. But heaven forbid they have a real income of their own…

In the comments thread to So “Fast,” I’m Nearly Invisible — scroll down on this page for the comments string — I quoted a big section from a June 14 Globe & Mail article (now behind a pay-per wall), “Canada, a land of mediocrity.” This article examined the Conference Board of Canada’s findings, and wow!, it minced no words.

Let’s hope that more people start chipping away at the myth that Canadians live alongside rural wheatfields or camp out with lumberjacks in the deep primeval forests. Most of us live in cities small, medium, and large. It’s time we were weaned off the allowance and were allowed to work for a living.