On “shakedowns”

Matt Elliott on the Fords’ bizarre war against Sec 37 funds:

But the mayor and his brother also argued that maybe section 37 funds could continue to exist, but that any money raised shouldn’t be used in the local communities. “Pool it all together, and divide it by the 44 councillors,” they said.

If anything, that view, which has been trumpeted by budget chief Mike Del Grande for a couple of years now, feels more like a shakedown than the current arrangement. As it is, funds raised from developers go straight to nearby community interests, where there’s a measurable impact. Under the scheme favoured—maybe—by Del Grande and the Fords, any money raised would presumably just go into general revenues where it’d be lost in the weeds of Toronto’s operating and capital budgets.

Matt is a pretty level-headed kind of guy so he’s being polite here, but we should be clear about the facts: Del Grande and the Fords know that the development pressure this city faces will overwhelmingly not be in their wards. (This City PDF, on page 4, points out that about 40% of new residential units and non-residential gross floor area occur either in the downtown or Yonge-Eglinton areas. I’d be shocked if over half of all development weren’t happening between Eglinton and the lake, and between the two rivers.)

So when the Mayor and Budget Chief say they want to pool the money, they’ve got a soundbite that has a veneer of fairness that dissolves under any kind of scrutiny. Their demand, in short, is the privilege of keeping density and development at a distance from their communities while benefiting at the expense of those who can’t–or indeed, those who might welcome density and the S. 37 money it brings. (If such people exist in this city.)

There’s a word for telling people who live downtown to open their wallets and hand it over. You might almost call it a shakedown.

This is before we even get to the inconvenient fact that the Ontario Municipal Board (the final authority in these matters) takes a dim view of S. 37 funds being used far afield from the intended community. According to Patrick J. Devine?(PDF), OMB decisions in the last decade set the precedent that a “real and demonstrable” connection to the development in question. So pooling S. 37 funds may not even be legal, much less fair.

There’s a fair argument that the city could use a different policy on S. 37 funds, but any changes to the city’s policies is likely to be marginal: provincial law also all but forbids a standardized system of S. 37 collection (this according to previous interviews with city staff) since it would then be an illegal tax under the City of Toronto Act. So S. 37 deals have to be local, ad-hoc affairs unless the province steps in to change the law.

That might be a good thing: I’m a fan of David Schleicher’s “tax increment local transfers”?as one replacement, but local control is still central to Schleicher’s idea. So Toronto’s suburbs wouldn’t get to keep out intensification and reap the rewards. In any case, it’s not what’s on offer. Nor, I assume, is the Mayor going to propose a simpler “scrap the S. 37 bylaw and just increase taxes”, because he remains Rob Ford last I checked.

So what we’re left with is basically suburban grievance, legal illiteracy, and a lack of any constructive suggestion for how to improve things. The status quo in the Ford years.