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Summer Conference 2002

Photo
Shirley Hoy and James Knight

FRIDAY AFTERNOON
Session Three – Globalization and Local Autonomy: Why There’s Never Enough Money
Speakers
FRANCES FRISKEN, Professor Emerita/Senior Scholar, York University (bio)
DR. ANNE GOLDEN, President and Chief Executive Officer, The Conference Board of Canada (bio)
SHIRLEY HOY, Chief Administrative Officer, City of Toronto (bio)
ENID SLACK, President, Enid Slack Consulting Inc. (bio)
Moderator

JAMES W. KNIGHT, Member, NRTEE’s Urban Sustainability Task Force & CEO, Federation of Canadian Municipalities (bio)

TRANSCRIPT

[TAPE 1, SIDE 1]

JAMES W. KNIGHT, moderator:

Globalization and Local Autonomy: Why There’s Never Enough Money. An interesting alignment of concepts. I know we’re going to have a good discussion. In a world which is both urbanizing and globalizing rapidly, cities clearly have become major drivers of economic activity. Urban quality of life is key to attracting businesses and talent to ensure Canada’s competitiveness in international markets. Employment growth in Canada comes principally from robust activity in urban centers. Fully 60% of new jobs and employment growth in the last four years came from our ten largest urban regions, with a remarkable 43% coming from the three largest economic areas – Toronto, Montreal and Calgary.

So Canada’s standard of living clearly depends upon the competitiveness and future success of our cities. So how are we doing? Well, there’s a growing consensus that cities in Canada need a new deal or a new partnership with other orders of government. Charlie Baillie, chairman of the TD Bank, the Prime Minister’s caucus task force on Urban Issues, Elyse Allan, CEO of the Toronto Board of Trade, Anne Golden, CEO of the Conference Board of Canada, Judith Maxwell of the Canadian Policy Research Networks, numerous federal ministers (past and present), even David Dodge, the governor of the Bank of Canada, are among those who have expressed concern about the sustainability of our urban regions and their governments.

Rapid urban growth creates a lot of stresses and strains. Investment in new infrastructure is pressing, the social support needs of many new urban residents grow, aging infrastructure in the core areas needs attention. And at the same time, municipal governments have been forced to assume new responsibilities as we’ve heard, offloaded from other orders of government and this, in the context over the past four years in which federal revenues have grown by 38%, provincial revenues by 30%, and municipal revenues by 14%, barely enough to cover inflation with nothing left over for the new responsibilities I was talking about.

My name is James Knight. I am the CEO of the Federation of Canadian Municipalities. That is my day job, I do plan to keep it. In addition, I serve on the Urban Sustainability Task Force of the National Round Table on the Environment and the Economy. The round table and FCM seek together to implement policy measures to improve urban environment quality while realizing social and economic benefits. We seek to develop measures of urban environmental quality, we seek to develop best practices, and to raise public awareness on urban sustainability issues.

I want to thank the Couchiching Institute on Public Affairs for developing this theme around cities – I think it is extremely timely. I thank the president, Margaret Lefebvre, and the board for inviting me to chair, to moderate this panel which embraces four extremely distinguished women intellects and leaders. I see my task is two-fold: first to urge you not to be moderate, and second, to provide gender balance. Thank you.

Dr. Frances Frisken is Professor Emerita at York University, where she has been on faculty for twenty-five years. She has long been interested in urban affairs. She chaired the Urban Affairs Association, is coordinator of the GTA Forum, which she initiated in 1978 to bring together academics and professionals with interests in urban issues. Ladies and gentlemen, please welcome Dr. Frances Frisken.

[inaudible comments]

FRANCES FRISKEN:

I was just saying it was ‘98 that I initiated the big GTA Forum and I’ve already pretty well have enough of it. That’s the way these things go. I want to thank everybody who’s responsible for bringing me here and it’s so far been an extremely enjoyable and enlightening period and I also want to thank Jim for moderating the session and introducing me. And we have time limits and so I’ll try to say what I have to say…I’m not a person who speaks very well off the cuff so I find if I’m called on to do something like this, I have to sit down and write it out and when I wrote it out it came to about thirty pages, which I managed to cut down to twenty, which I will now try to cut down to about fifteen minutes, so bear with me.

As we’ve heard a fair amount since this conference started, the whole issue, the whole awareness of globalization, has focused interest on cities, and what happens in cities, and what cities are doing; to an extent that hasn’t been true in Canada for thirty years, and there’s been a lot of talk of opportunities this gives to cities and to city regions and this is something I want to talk about because the two terms are often used interchangeably and the argument I want to make is that they’re not interchangeable terms. Cities and city regions are very, very different things and that’s very important when we start talking about issues of governance.

I should say I will be saying something about money but I won’t be saying a lot about money despite the title of the session. In fact, after some thought and I thought "what am I supposed to say about this topic?", because I am a policy analyst and not an economist, and so my subtopic is ‘Money And Governance Are Not The Same Thing’ and I think that this is something these days we lose sight of.

Ok, so what the globalization literature says, very briefly, is that globalization, because it has weakened nation-states in terms of managing their destinies, it has at the same time, strengthen the capacity or the…if not the capacity at least the possibility for cities or city regions to enter into the affairs of their nations, of the world, if you like, in a way they have never done before. And I guess a sub-theme to that is has come out quite often in this conference is that yes, in principle it has but in actual fact they’re not really able to do it because there’re – especially in Canada, I think Canada has the reputation of being one of the most regulated in terms of its municipalities of virtually any country in the world – and also for the obvious financial reasons. But I think that I don’t quite fully agree with this diagnosis. I think there are a lot of other, more basic things we have to address and that’s what I want to talk about.

In this argument that globalization has presented cities or city regions with new possibilities, new opportunities, there are answers to two important, very important questions implied here. One is, "what is meant by local in this globalization context?" and the second question is, "what is meant by local governance?"

And the answer to the first question is that local, I guess really regional, and I would say that this is a very important distinction to make and a distinction to bear in mind when we start to answer the second question, "what is meant by local governance and how do we do it?" Regions, as I say, are not the same thing as cities. Cities are individual, separate entities. Regions are made up of many municipal entities, some of them cities, some of them much smaller, and they co-exist in an uneasy way in an expansive territory, sometimes very large, sometimes very compact. They have to co-exist but they often co-exist unevenly.

The second question is, "what is meant by local governance?" The answer to that question, which was very, very much at the top of the list in the late 80’s and into the 90’s, was that, "ok, if we’re talking city regions, what we really need is regional government." And we have with us today Anne Golden, who worked very hard, and I should say very effectively, on a study which essentially argued the need for a regional government for the region which I’m most familiar, which is the Greater Toronto Area. I say she argued, they, the committee, the task force argued eloquently for some form of regional government. Unfortunately they did not argue effectively because we did not get a regional government and in fact many of the recommendations of their report was virtually completely ignored when it came out by the government that came into office in the province of Ontario which, as many of you know, is the government that has the authority, the legal authority, to decide how our areas are going to be governed. So regional government for, at least for the time being, is no longer very much under discussion as an option because it doesn’t seem to be an option. I would say from my…what I know about the history of regional government in North America and how’s it’s evolved, it is no longer an option for the Greater Toronto Area – but I am sure there are other people who disagree with me.

So, ok. Where do we go from there? We’re sitting here with a region which really has no formal type of government. It’s a region that’s made up of 29 different municipal units plus various other units of local governments, special purpose bodies, and no overarching government to plan, to try to coordinate what the different units are doing. Where do we go from here? And there is a great deal of discussion at the moment going on about where we should go from here.

So…I think though, before we get into the question of what are the institutional and financial requirements for effective local governance, which is what the debate is all about, we have to ask another question and I quite admire the person who’s been up at the…asking questions about outcomes – I don’t know if she’s here or not – but I think this is a question that too often gets overlooked when we start talking about local governance issues. We talk a great deal about process and we don’t talk enough about outcomes and what we hope will be achieved. Some of that has come out though and if we go back to the regional agenda, or the regional globalization agenda we find that there are a lot of outcomes implied in the discussion of globalization and cities.

One of the first outcomes, one of the things people look for from governance of course, is infrastructure that will support the kinds of investment that people think are necessary, or people that cities are trying to attract, or city regions are trying to attract in their competition with other countries, other cities, other regions.

So, infrastructure is one. But then we heard a good deal of discussion this morning about quality of life and I won’t go into that because most of you heard it, but it touches on a number of issues. But it also I think, as you move through the issues of things like safe streets and a pleasant urban environment and things like that, you come down to the question of how do we deal with the people who are really on the margins are being left out in the process, in the economic process that is going on. And the, I think the point was made fairly strongly by several speakers that unless we look after those people then our cities are going to suffer, our quality of life is going to suffer, and it is going to have very negative effects on the competitiveness of cities.

But I think there’s a lot more that is at issue here too. It’s not just economic competitiveness. The whole question that is at the base of this is – what kind of society are we? What kind of society do we want to be? What kind of people are we? And I think this is a question we all have to ask ourselves because I think too easily that gets swept aside, especially nowadays by sheer economic questions. And I think it is a concern because there are economists that say "it doesn’t matter, doesn’t matter what happens to cities, and this is where the regions come in, it doesn’t happen to big cities ,which is where many of the social problems that we talk about are found, because of course regions are growing, we’re getting things like edge cities, we’re getting things like development at the outskirts, and we don’t need cities anymore." And I mean to many of you this is a shocking statement but there are people who say that ,there are people that argue it, there are people that believe it.

I also think that one can point to the example of the United States which has done quite well economically despite the fact that it’s let its cities go and here I dissent to some degree with those people that say they’re coming back/ They’re coming back economically but they’re not coming back socially. In fact, as I understand it, social conditions are continuing to deteriorate in many U.S. cities, so they haven’t resolved those problems at all and yet economically the country is doing alright.

So that I think that there’s more here. It’s not just "do we want to thrive economically?" but "do we want to thrive socially? Do we want to thrive morally?" and I think that these are much deeper questions. Ok. Anyway, the argument. Then of course there are the environmental issues, there’s the issue of how we handle the movement of peoples among countries, among cities, the cultural adaptations that are having, that are going on, there’s a whole host of questions associated with this supposedly simple question ‘quality of life’.

So the kind of things that are being asked of cities nowadays are horrendous, they’re enormous, they’re very complex, at a time when not only senior governments but a lot of people – a lot of people, a lot of academics, a lot of analysts, a lot of urbanists – are saying cities can go alone, cities can do what is needed to be done, just give us the money, we can handle our own problems. And I think this is a very dangerous position to take because at least at the simple minded level, it’s very easy for senior governments to say "what a great idea, let’s let them do it and then we’re off the hook" and so I think that this is something that we have to think about very seriously.

Ok. So what are the options, given the options for governing our city regions, given the kind of issues that they’re facing and the kinds of problems they have to deal with? Well, first of all we have to think about city regions – what are they like? And as I say, they are composed of many different municipalities each one of which has its own government, with its own constituency, it’s own population having its own characteristics, its own set of needs, and its own view of what is important and what isn’t important to its own well-being.

Within regions – not among regions but within regions – the political mode is competitive. Municipalities compete with each other. They compete with each other for tax dollars, that’s obvious, and one answer to that is ok, if they’re less dependent on tax dollars, then they will be less competitive with each other. And that might be true but they also compete so that they can get the best of what’s going around and avoid the worst. So they put up barriers to things like low-cost housing, even – this is less true here, I think, so far than in the U.S. – but that they’ll even put up barriers to public transit because they say that public transit brings in the wrong kind of people, so we don’t want public transit, they don’t want to provide services to people who they don’t want, people who are going to cost them more in services, and so forth.

But of course, in any competition, some are equipped much better to do much better than others and in this competition I think cities are at a disadvantage because they have less land, they have fewer options, they have more people in need and so forth. And if the political system works in such a way that it reinforces, or strengthens, or allows this competition to benefit those municipalities that have few problems in such a way as to make those cities that already have problems have more problems, then it means that you’re going to get increasing social disparity, social polarization, within your city regions. And I think this is a basic fact of the way regions work that has to be taken into account when we talk about options for governance. And the options, very quickly, are four as I see them.

One is to encourage and persuade local governments to address regional issues cooperatively. Bring them together in a cooperative, consultative forum and say "sit down folks you’re part of a region, the survival of this region depends on everyone working together and so, you know, you face up to the problems , there are problems, you face up to them and come up with a scheme as to how you’re going to provide the necessary services, how you’re going to pay for them", and so forth.

Well, this is one option that has also been tried in the Greater Toronto Area and for the moment it’s a dead option. We had something called The Greater Toronto Services Board. It brought together mayors and representatives from municipalities throughout the region. It lasted for three years. It was so bogged down in bickering for so much of the time that it accomplished very little and it certainly didn’t accomplish any agreements on doing anything cooperatively. And one of the major issues confronting it was the transportation problem in the region which is getting bad and getting worse. They did come out with a kind of wishy-washy transportation plan but no plan for implementation and certainly no plan for funding. In fact, they were quite clear. "We’re not going to pay for this. The federal and provincial governments have to pay for this, we’re not going to do it. But we’d really like some better transportation." And that was the end of the cooperative effort in transportation.

The experience of The Greater Toronto Services Board was very, very typical of the experiences of these kinds of bodies which exist all across North America, with the possible exception of the Greater Vancouver Regional District, which is a different kind of organization. I can’t go into it, but it does have a clear, legal mandate to do certain things and it does them. But just calling together municipal officials who are really, really see each other as competitors and ask them to cooperate, which means they have to give up some of their precious tax dollars to help the guy next door, it doesn’t seem to work. It might work in a crisis and we haven’t got there yet.

Ok, so the other extreme is to give local governments, particularly the governments of the largest cities, both the legal and the financial ability to look after their own needs and we’ve heard something about this today. And this is a much-discussed option at the moment and it’s being pushed by things like the charter movement and various sort of interested groups. And personally, I have a lot of reservations about this, I think, partially because my educational background is in the United States and I observed first-hand American cities and American city relationships with their suburbs and American cities have what advocates call more local control want, and that is they have a state-granted home-rule laws that allow them to do a lot more things than Canadian municipalities have done.

As I see it, home-rule laws have really not made the condition of cities better. And somebody mentioned today and I find this very interesting, that Canadian cities pay something like 48% of their costs out of property taxes and American cities only pay 18% and this is regarded as a good thing. I think it’s a terrible thing because it’s symptomatic of the very poor condition of the economies of American cities that they have become so dependent on outside funds. That’s really what it means because I don’t think their services are any better, in fact, the cities I know their services are a great deal worse. So that I think having a healthy tax base is a very healthy thing, being able to pay for a large number of things yourself is a very healthy thing, and that Canadian cities in that sense are probably a lot healthier than most American cities.

Ok, so the…I’m way ahead of myself here. So this option requires provincial government to remove constraints on what municipalities can do and also to free up them up to be able to get money from more sources. And I have several reservations about this. One is that I seriously doubt that any provincial government in Canada will be willing to turn over powers, authority to municipal governments unless they really thought, especially big city governments – and let’s talk about it first as a big city issue – unless they really thought the big cities weren’t worth much anymore anyway. If big cities are as important economically to the country and to their provinces as they say they are, and as other people say they are, then the provinces are not going to let them go.

I think that’s one of my reservations. I don’t think it’s going to happen for political and constitutional reasons. The constitutional being control of urban affairs is a very important bargaining point for provincial governments in these interminable inter-governmental squabbles that we have to endure in this country all the time and you know, it’s important to them in that sense. So unless provincial governments think there are a lot of benefits financially to them and very little cost, then I don’t think they’re going to turn over a lot of power to municipalities, municipal governments.

Second reservation, and I am, I agree some of these are a bit inconsistent and contradictory but second reservation is that I don’t agree fully with the characterization of municipal governments as powerless creatures of the province who can’t do anything that they’re not given permission to do by provincial governments and that they just exist to carry out the will of the provincial governments. In my own research and in some of the things I’ve read in the research that other people have done I am constantly amazed, given this characterization, by the variety of things that municipal governments do in the same area.

And one of the studies I’ve been into lately which I found quite exciting is a comparative study of what municipal governments in the Greater Toronto Area have done in response to immigration. Now we hear that Toronto, meaning the metropolitan region of Toronto, gets, in the year 2000, 50% of the immigrants that came to Canada. They are distributed throughout the metropolitan area and the percentage of immigrants in some of the suburban municipalities are surprising high but there are great variations in the percentage of recent immigrants, last ten years immigrants, with 80% of recent immigrants settling in the City of Toronto, which means that the City of Toronto has to deal with the problems of people who have recently arrived. Many more. I think a nice contrast is the city of Vaughan, which has a higher percentage of immigrants than Toronto but only 0.02% of recent immigrants in the last ten years and there are good reasons for that.

But anyway, looking at what the municipal governments in that region have done in response to immigration, the differences are amazing, they really are. And so, they’re…the municipal governments… and I think somebody made that point this morning, they do have some flexibility to do quite innovative things.

The third reservation relates to the assumption that provincial governments will grant greater freedom of action to big cities and not to everybody else and they might do it for a short time but I cannot imagine, I don’t know where all of you have come from, I can’t imagine the mayor of Mississauga sitting back and watching Toronto being given special status and just saying "oh, that’s good. They need that. We’ll sit by…" Ok, ok.

So those are my three reservations. The same reservations, I think, apply to giving municipalities more funds. What provinces, and the same thing goes for the federal government, give to some, they have to give to all, eventually, because that’s the way our system works and you know, it really is, there’s good democratic arguments for it. The suburban municipalities, or some of them anyway, will not use their money in ways that would help the city like perhaps building more affordable housing so that many of those people, homeless people, in the city can move out there. They won’t do that as long as they’re not made to do that and the only government, the only source of persuasion, is the provincial government. So giving municipalities new sources of revenue without strings attached is just an invitation for municipalities in a region to do more of the same thing that they’re already doing and some of those are very harmful, I think, especially to the interests of the cities.

Ok, I think if we look at alternative sources of funds we can come up with the same thing and I’ll give just one example. More sales tax, access to a sales tax. What you would immediately get if you gave municipalities the right to tax sales in their communities is that every economic development office in every community would be struggling away trying to think how they could get the biggest and the best shopping centre in their communities so everybody would come there and shop and spend their money and they could collect the taxes.

Ok, the third option is to bring, to get the federal government involved and I think this is good and it’s necessary. I mean the federal government has to recognize that cities are an important part of the country, but I think again there are very serious constraints, constitutional constraints, on the federal government becoming very involved with cities with how they will become involved with therefore in areas where it’s easy to become involved. In other words, where there is least resistance from the provinces. And one of these is infrastructure, that’s already happening, if the infrastructure funds all go into building water and sewage and roads then it’s not going to help our cities, it’s going to probably hasten decentralization, it’s going to make the problems of cities worse, it’s going to make the environmental issues worse and so forth. And if it goes into things like affordable housing, which is something that cities need really badly, it’s going to increase the disparity between the core cities, which have affordable housing, and the cities outside which don’t, and don’t want it, and will make it clear they don’t want it. That if the money is there they won’t ask for it. So that, you know, it’s fairly easy to get money in ways that are destructive as well as ways that are constructive.

I guess from all of this my conclusion, and this is based not only on what I’ve seen happening in the GTA but what I know about American cities and how they’ve evolved, is that the only government that can really give effective local governance to regions in Canada are the provinces, whether we like them or not. And whether we like them or not should have more to do than whether we like the party in power at the moment. They’re the only ones with the legal authority to do things like demand that municipalities plan for affordable housing, that they do plan for more compact communities, that they relate their land-use planning to the needs of public transit and so forth. So I think it does come down to, if we’re not getting regional governments, then we have to rely on the province to do some of these things.

JAMES W. KNIGHT, moderator:

Well it was one of my hopes that the session would it not be moderate and I suspect that will prove to be the case, Frances. Our next speaker is Shirley Hoy, who has held a long range of senior positions with both the government of Metropolitan Toronto and the government of Ontario. Following a term as Commissioner of Community and Neighbourhood Services for the City of Toronto, she was appointed acting CAO, Chief Administrative Officer, and acting CFO, Chief Financial Officer, of the City of Toronto on June 20th, 2001. There is a big story behind that, I’m sure. She is now CAO of Canada’s largest city. Shirley Hoy.

SHIRLEY HOY:

Thanks Jim. Good afternoon everybody. I’m really pleased to be here at the 71st Couchiching conference. My first experience with the conference was in 1969 with René Lévesque as the speaker, so this is a very special institution for me.

I’m sure… unfortunately I didn’t make it for the start of the conference. I only got here this morning, caught the tail end of your morning session. Probably you’ve heard too much about Toronto already, but my role on this esteemed panel is to talk about Toronto and to talk about Toronto as a case study. And of course, when the title is "Why Is There Never Enough Money?", I go anywhere where there’s that title, being from Toronto. So that’s why, really, I’m here today.

I think I’m not going to talk about generally what municipalities can and cannot do because I think Anne and Enid will cover that very well later when they speak. I want to talk about Toronto and I want to talk about the fact that I think the basic problem for the City of Toronto is sustainability – socially, economically, and environmentally. I’m going to be referring to a number of studies that again, you may have already read or heard about during the last couple of days but I think they’re very important recent studies that talk about and illustrate why Toronto is in the situation it’s currently in. So I want to make the case that Toronto, I think, over its history has worked hard at being a smart, successful community however, there are some serious impediments to our future sustainability.

As we go into the 21st century, I want to kind of position Toronto in the international context and to let you know it’s not all doom and gloom, really, because in spite of the governance issues you read in the major media, whether in print or in the electronic media, about the governance issues in the City of Toronto, cities work and I guess the City of Toronto being the largest one it kind of, it’s on its own momentum and there are things that make it work well. As you know, it is, Toronto is one of the wealthiest cities in the world and it’s well-positioned to adapt to changes affecting cities everywhere across this whole planet. Our annual operating budget of $6.2 billion is larger than most provinces, the provinces of Newfoundland, Nova Scotia, New Brunswick and PEI. We also celebrate as one of the most multicultural cities in the world, with over a hundred languages spoken.

And it’s in the economic area that I want to focus on as well. The heart of the financial, commercial and administrative core for the whole city is in Toronto. Our workforce is exceptional there are a number of studies that have been done shows that Toronto, like some of the other major cities across the country as well, we have exceptionally skilled and well-educated citizens. New immigrants as well as, you know, citizens who are born in the city. And this is important because in terms of our competitiveness, knowledge innovation skills, we have to be able to capitalize on that.

Toronto’s industry clusters are outperforming the North American average in terms of job growth and many are clearly ahead of major U.S. metropolitan regions as well. Our biomedical and biotechnological cluster in the city employs more people than that of any city in North America. We are actually, within North America, the largest biomedical and biotechnical cluster. As you know our stock market now is the third-largest in North America and it is growing faster than any other.

So in this new century, economic growth is driven by knowledge, skills, innovation and entrepreneurialship. Our strategy, now the City of Toronto, since amalgamation in particular, we have had a number of major strategic planning sessions with our council – challenging, I have to tell you – but we have on paper basically a document that sets out the strategic plan, sets out economic plan, environment plan, and a social plan and I just want to touch on those somewhat. I heard former mayor Barbara Hall talk about this morning about the official plan we’re launching right now so there will be real opportunities to talk about the general directions that council has set.

But on paper we do have a plan to, in the economic area, for example, to expand our traditional economic development focusing on ways by which we can attract and develop our labour force to match the growth in the knowledge economy in particular. And we have also, because of the critical mass of cultural diversity and the world-class institutions, the internationally competitive financial professional services that are concentrated in Toronto, we have developed a plan as part of our economic strategy to work with the regions around the GTA to ensure that we become and continue to be, truly competitive with other metropolitan regions such as New York, Chicago, Boston, Los Angeles. Truly, those are the metropolitan areas across North America that Toronto has to focus on.

Partly it’s from my background but partly I think Toronto has done this one well, is our social development strategy. In 1995, United Nations World Summit for Social Development adopted the Copenhagen Declaration and a program of action which was signed by Canada and more than a hundred other nations. The Declaration lays out a set of goals, to which are central to Toronto’s social development strategy. We promote democracy, human dignity, social justice and solidarity and we promote the equitable distribution of income, and greater access to resources through equity and equality of opportunity for all. I think in this area, if you look at the number of programs and services and directions that Toronto Council takes, of all the plans that we have now adopted probably this one was put into action more so than the other ones.

Environmental plan. Recently I know that the Toronto Environmental Alliance gave us a D+. We went up from D last year, I think, we got a plus. This is an area where the plan and the policies in place but action is lacking. And part of the action that’s lacking is because of another challenge that I will talk to a bit later, and that’s the fiscal sustainability issue that currently we face. However, we do have a policy where we are very much committed to trying to get Toronto to be truly a clean, green and healthy environmental city and to ensure that we continue to promote a shared vision for cleaner, greener, healthier, sustainable future. But as I said earlier, we’ve still got a long way to go there.

In terms of good governance and city-building, I’m not going to talk about how council works – a lot of other people can talk about that. But there is one part of governance that is in our overall city strategic plan which is important and that is the promotion of participation, civic participation, by the citizens of the city.

I think if you look through the…our plan…but also in part…I think action’s been taken as well…is that, in spite of the hours and days of council meetings there is a process where we encourage collaborative decision-making with the citizens, accessibility, continuous improvement in citizen participation, and the real desire – and the majority of council I would say support – community capacity-building, which is very important. And again, when I look at, and speaking to some of issues that Frances raised about how the vulnerable and the marginalized citizens often do not get to participate, if you look at what City of Toronto Council has done, because of the community capacity-building, that basically it’s being done by former seven municipalities and now kind of inherited and promoted by the majority of council members, we do have a pretty good process of promoting good governance at the community and neighbourhood level.

Let me talk about Toronto’s Achilles heel though, and that’s fiscal sustainability. And here’s where I like to quote from a number of the recent studies, starting with the Federation of the Canadian Municipalities report, "Bridging the Innovation Gap – Count Cities In". It cites a number of urgent needs for national urban strategy and certainly Toronto supports the FCM’s work in this area. It talks about the fact that – and this is not Toronto-specific but I think it’s important to highlight the areas in particular we agree with the FCM report – it talks about the need for $9.2 billion over the next five years for capital investment in public transit, that one in five Canadian households, an estimate of 1.7 million people, are in need of affordable housing, and that each summer we continue to see more and more smog advisories being issued. The health costs associated with this pollution is staggering. So that’s for all of us.

The second report I want to quote is the Toronto Board of Trade Report and of course this one is more Toronto-specific. It’s called "Strong Cities, Strong Nations" and I just want to quote three little paragraphs from this report.

"Toronto’s current situation is not sustainable. The city faces a growing litany of challenges and has limited capacity to resolve them. This imbalance will wear down the economic engine. Failure to take action will have substantial implications for the revenue growth of senior levels of government and by extension the potential prosperity of the province and the country." And finally, "the fate of Toronto and the fate of the nation are inextricably linked. A strong city means a strong Canada"

So in my mind there’s three basic problems. I talk about the biggest one, which is sustainability. In my mind, what this relates to, and a number of the reports of course talk about this as well, is the city’s ability to maintain programs and infrastructure without increasing debt or running down the fiscal and financial assets. Just let me give you a specific example. When Toronto approved its 2002 budget, the capital budget for City of Toronto, if we keep adding – and unfortunately I didn’t bring the chart that we’ve been using for the whole last year when we were doing the budget – is that basically, in five years time, the debt, right now our debt is $1.2 billion, if we keep going the way we’re going in particular the need for public transit road and bridge repair it would double within five years, over 3 billion, $3.3 billion if we just kept going that way and that’s part of the reason why you’re hearing a lot of cities yelling for help from the province and the federal government. Secondly, even with that kind of capital program and with that kind of debt level, the road and bridge repair work was still eight years backlogged. That means we’re going to never, ever catch up with the kind of major repairs we have.

The other issue about sustainability for Toronto is the fact – and I just mentioned this – is the older infrastructure and you’ve probably heard and read a lot of debates about what we’re trying to do with the water system. Well, it’s the same problem. You’ve got water pipes that are over a hundred years old and trying to come to grips with that and not having kind of these peaks and valleys in the budget but one that can steadily increase has been the biggest challenge. So, and I must say, the four of us could have a debate by ourselves if you guys don’t want to ask questions later…

[TAPE 1, SIDE 2]

…just making notes about jumping into what Frances was saying. I do think Toronto is a special case and hopefully we’ll get into debate later as to why that’s the case but in part, in part I think something like the unique infrastructure concentrated in the older city and the fact that, for example we have the subway system and the urban expressways, makes it abundantly clear in my mind Toronto is unique.

The second major issue I want to identify is flexibility. And again, from what Frances said about, you know, well, municipalities already have too much, they don’t need more autonomy, the province needs to be the one direct, I would have to respectfully disagree again because I think for cities to really be able to manage its affairs, what we have right now is a very inflexible program by program, service by service approach. What we really need is some flexibility that relates to the city’s ability to fund growing commitments with additional revenues and less debt. We face the combined challenge of significant financial pressures and constrained financial flexibility. That’s the current situation.

And finally the third related issue is vulnerability. Vulnerability relates to the city’s lack of control over service levels and demand for different types of services resulting from demographic and economic changes and senior governments’ unilateral actions. The city has a disproportionate number of low-income households, new Canadians, and an aging population. In essence, a lot of social needs are in the City of Toronto, especially if you relate Toronto as kind of the ‘hole-in-the-donut’ to the GTA, if the GTA is the whole donut and that’s been part of the challenge in Toronto. That as the population grows and as we see where the growth in the population is around the GTA area, Toronto as a whole is becoming the inner-city for the GTA region. And finally where there’s vulnerability is that the city has to face greater unpredictability over service delivery and infrastructure needs compared to other municipalities.

I don’t want to talk too much about the new deal, because I think a new deal for the city or charter city, because Anne or Enid may speak to that, but I want to conclude by quoting from the Toronto-Dominion report, which is the third report that’s come out talking about needs of cities, and a lot of that had to do with Toronto. The report is called "The Choice Between Investing in Cities or Dis-investing in Canada’s Future" And one quote here that I want to give you is the following:

"Given the multiplicity of changes facing Canadian cities today, a new way of thinking is required, one that puts the affairs of cities front and center on Canada’s economic and policy radar screens."

And ladies and gentlemen, I really want to quote with this thought with you, with this challenge and our debate later when we come back, and in my mind the problem we have right now for cities and dealing with the issue about sustainability of the city is two-fold. One is exactly what I have just quoted. I don’t believe we have a change in mindset yet by the decision-makers whether by the province or the federal government or at the municipal level. My contention is that a different question has to be asked. Right now the question that gets to be asked, especially because of the fiscal and financial problems at every level of government face, is we all focus on governments as if we’re only a service provider dealing with a consumer. That’s the only question that seems to be critical in people’s mind. We no longer ask "what is the role of the government vis-à-vis its citizens?" When was the last time we talked about the needs of the citizens rather than the needs of the client or the needs of the resident as if it talks about services only, and to me, I think that’s been the problem in terms of the whole debate up to this point about cities sustainability issues because we keep asking the question of service provider not the role of municipal government and its citizens.

So I look forward to the debate. Thank you very much.

JAMES W. KNIGHT, moderator:

Thank you very much, Shirley. Dr. Enid Slack is a consultant specializing in inter-governmental and municipal finance issues. She was a special advisor to the GTA Task Force and to the Mayor’s Task Force on Homelessness and she sat on the Ontario’s Who Does What panel which has been referenced already. Enid is a prolific writer and commentator on municipal finance and I ask you to join me in welcoming her. Enid.

ENID SLACK:

I think we’re speaking in order of height because each person keeps lowering – Anne, are you shorter than me? No, I’m fine, thank you. Thanks very much Jim. It is a pleasure to be here today although I must say it would be more of a pleasure being in this room if it were raining outside instead of the beautiful day we are leaving behind out there. You know, I feel like we should be having the seventh-inning stretch much like in a baseball game and get up and do some exercises – but Anne has promised me that she’ll have a great joke at the beginning of her speech, so you’ll just have to hang in because she always has a great joke. No pressure, Anne, but...

I want to talk about three things today. The first is the fiscal challenges facing cities. Frances talked about cities being asked to do a big job, an enormous job, she said, and I want to talk about some of those fiscal challenges. The second thing I want to ask, and Shirley touched a bit on this in the case of Toronto, are cities sustainable financially? And the third thing is what needs to be done, and here I’ll talk about a role for the federal, provincial and municipal governments.

There are many challenges, fiscal challenges, facing cities. I’m just going to mention three. We’ve talked a lot about globalization, the conference is about cities and globalization. Somebody said this morning that globalization was in competition with cities – I didn’t really understand that – there is a really important role for cities in globalization. I think it means that cities are competing now on an international stage. And to be competitive, cities basically need to attract business and attract skilled labour. How do they do that? Well, they need to provide transportation infrastructure, communications infrastructure but also services that improve the quality of life in the city. These are critical to competitiveness. Now I gather you talked and I wasn’t here this morning, a lot about quality of life. But here we’re talking about services like parks, recreational and culture, good schools, social services, police protection, health care, air and water quality. So, the challenge facing cities from globalization is to be able to provide all these services to attract the businesses and the skilled labour, and of course they have to pay for these services.

The second fiscal challenge facing a lot of Canadian cities is the offloading of services by the federal and provincial governments, which have increased municipal responsibilities. Now offloading is an interesting word. When I first got into this business in ’96 with the Who Does What panel that Jim referred to, we talked about downloading and I got into a lot of trouble. After speeches, provincial people would come up to me and say, "downloading is a bad word, makes us look bad. Don’t talk about downloading, talk about local services realignment, or something like that. Well, that’s fine. I kept on being consultant, I can do that, and I continued to talk about downloading. Now the cities has come to me and said, "oh, you can’t say downloading, because that means we’re at the bottom of the food chain and the federal government is the senior government. We are the senior government, it’s not downloading." So we have this new word called offloading of services by the federal and provincial governments. Whatever you want to call it, these services have gone from the federal and provincial governments to municipal governments, have increased the range of services they provide, the amount of money they have to spend, and generally their responsibilities. And we’re talking here about things like roads and transit, social housing…some social assistance was downloaded in Ontario. At the same time, nothing’s happened to the revenue sources in the municipalities. There’s been no diversification of revenue sources. So the challenge is to provide all of these offload services to cope with these new responsibilities within the same revenue structure that municipalities have always had.

The third challenge comes from growth. Now growth is a good thing but also a challenging thing. We know that urban sprawl has increased the cost of services that municipalities have to provide and increased pressure on the existing revenue sources. People have referred to Anne Golden’s task force already today, the report of the GTA Task Force in 1996, which suggested that if we went to a more compact development GTA then the way we have been going, we could save about $12.2 billion in capital costs over the next 25 years. That’s about 22% of the projected $55 billion in capital investment to maintain the current development patterns. And that doesn’t include the costs of air pollution and congestion, health care, policing, parking, all of those costs as well. So the challenge here is to accommodate growth while preserving farmland and environmentally sensitive areas, and to keep costs down so they don’t put any more pressure on municipalities.

Now I’ve just mentioned three of the big fiscal challenges, there are lots of other fiscal challenges as well. The question then is, are cities financially sustainable? Is there enough money? Can the cities meet these challenges?

So the second question I want to look at is fiscal sustainability. I’d really love to be giving this presentation in about six months from now, because I’m actually working on a study on fiscal sustainability of the GTA and other municipalities, but haven’t gotten far enough to do much more than speculate today, so maybe sometime I’ll come back to you and tell you more about it. But to be financially sustainable, it’s very simple. Cities just need to have adequate resources to meet their expenditure needs now and in the future. Sustainability has an ongoing concept attached to it. It’s not just meeting your budget today. It’s being able to meet your budget down the road. Shirley talked about that.

Municipalities provide a lot of different services. When I go through their financial returns, I see roads, transit, fire protection, police protection, water, sewers, garbage collection, recreation and culture, social housing, planning – I mean it goes on and on and on. Municipalities have a lot of services to provide and in Ontario, they also have to provide some social services. And they don’t have a lot of discretion over these expenditures. Most of these programs are mandated by the province, with a lot of rules set down about how they have to provide them. So their own discretion over the expenditures they make is fairly limited.

How do they pay for these expenditures? Well, on average, and now I’m talking about across Canada, property taxes account for over 53% of municipal revenues – more than half of municipal revenues in Canadian cities come from the property tax. User fees, about 21%, federal and provincial grants about 18%. There are some other miscellaneous revenues, for about 8%. So, municipalities continue, in the environment that we talked about as challenges, continue to rely mainly on property taxes and user fees to finance services.

Now, most people hate property taxes. I’ve actually written a lot about property taxes, I think it’s a good tax. Do I think it’s enough for municipalities? Is it sufficient to meet those challenges, to provide things like social services? Definitely not. But don’t rule out the property tax. For starters, it brings in a lot of money and if you want to replace that with something else, you’d see income taxes go up so high your heads would spin. So the property tax, I think, is here to stay. We need to supplement it but it’s a very good tax. It’s a good tax for local governments because it permits them some local autonomy and because there is some connection between the services funded at the local level and property values. So, for example, sidewalks and street lighting in parks – they actually do affect property values and this is a way of taxing that benefit. It’s also a very visible tax. Now, politicians don’t like that very much but citizens should like that. It’s not like the income tax. The income tax for most people is deducted at source. When you get your cheque, the income tax is already gone. You might know what it is but basically it’s already gone. But the property tax you actually have to write a cheque to the government for your property taxes, unless it’s included in your mortgage.

I sometimes do a test at parties and I say to people "do you know what you paid in income taxes last year?" – and well, they generally don’t unless they’re self-employed. And if they do know their income taxes I say "well, what did you pay in provincial income taxes?" – and then they very rarely know what that is. I ask them what they pay in property taxes and they tell me, "$4,729.15". People know what they pay in property taxes. Of course, some people think I’m the life of the party.

But visibility enhances accountability. It doesn’t make the property tax popular. It makes it very hard to increase, as we know in a lot of cities. It makes it very hard to reform but it is very accountable. It also finances services that are very accountable, like snow removal. I have to be careful when I say snow removal because I often speak in Latin America and they don’t know what I’m talking about. But garbage collection, snow removal, parks – you know, the streetlight is out and people say, " My streetlight is out and I paid 4,700 whatever in property taxes". So it’s a visible tax financing visible services. That makes it very accountable. So let’s not throw it out so quickly. The base of the tax is what we say in economics is inelastic, in other words, it doesn’t grow automatically over time. If the economy is doing well, income grows and so the federal and provincial governments, they don’t have to raise the tax rates. They just get more money, it just keeps coming in. The property tax doesn’t increase that quickly so if the municipality needs more money they have to raise the tax rate. Well, that’s bad for municipalities because that’s very hard to do but it does make it a very accountable tax when the municipality says we have to raise these taxes. So, the property tax is a good tax. It’s hard to reform, it’s hard to increase, and it’s certainly not enough, but it’s still a very good tax.

Well, let’s go back to the question of sustainability. Right now, if we look at today, cities appear to be meeting their expenditure requirements with the existing revenue sources that they have. Well, they have to. Municipalities in this country are not allowed to budget for a deficit on their operating accounts. So they have to balance their budget on operating. On the capital side they can borrow money, but again there are provincial guidelines for how much money they can borrow. And most municipalities in Canada are well within those guidelines. Indeed, many cities in Canada have been engaged in debt reduction in the last few years. Property taxes have not increased dramatically, even in the face of offloading. So what’s the problem?

Well, there is a problem, there’s several problems. The first is – and Shirley talked about this in Toronto, it’s true everywhere – infrastructure is deteriorating. This means that municipalities are balancing their budgets without large tax increases because they’re not keeping up their investments in infrastructure and that’s a very serious problem. The Canada West Foundation put together evidence for western Canadian cities and it suggests that they have not been maintaining a consistent level of capital spending over the last 10 years and the result is a capital deficit. FCM has reported on this, other organizations have talked about deteriorating infrastructure. So sometimes those property tax freezes have been at a cost.

But the other issue is, ok, if they’re fiscally sustainable today, what about in the future? Are cities fiscally sustainable in five years, in ten years? If there were an economic downturn, and welfare payments, for example in Ontario, increase significantly, there would be pressure to reduce services or increase property taxes. So if the economy changes there will be a lot of pressure on property taxes. When we had downloading in Ontario some of the education went up to the province, some social services came down to cities and it was revenue neutral – we can debate that but even for a moment, if we all agree it was revenue neutral – what’s happened over time? Well, if you’re looking at the latest demographics you’re going to know that those social services costs are going to escalate in five to ten years, and education costs are probably going to go down based on the demographics. So what may have been sustainable at one point in time won’t continue to be sustainable in the future. There are some cities that are not growing quickly, they can’t rely on development charges to meet those infrastructure costs, or they don’t have a growing property tax base. They will not have adequate resources to meet rising expenditure demands over time. So yes, we’re balancing our budgets today but the future doesn’t look very good in terms of being able to balance them on an ongoing basis.

Well, what needs to be done? Well all three orders of government have a role to play. Cities need to make a lot of changes in how they raise money even if no additional revenues are made available to them. For example, they need to make greater use of user fees, and I think one of the speakers this morning said we have to say, these are they costs and you’re going to have to pay for them. And we need to charge directly for some services. And more importantly, we need to restructure some of the user fees we have to ensure that we have efficient use of service. If we’re not charging the marginal costs of water, people are going to overuse it. If we need to upgrade the infrastructure for water, it has to be part of the user fee. We can’t go anymore to the province when we need to build the new treatment plant and say we need the money, it has to be built into the user fees. So we have to price services correctly.

We need to, at the city level, remove some of the distortions in the property tax. Most cities across Canada over-tax commercial and industrial properties relative to residential. We have to stop doing that. We over-tax apartments relative to single homes. We talk about sprawl and how we don’t like it and then we put highly property taxes on apartments then on single family homes. We raise development charges. We charge developers to pay for the cost of infrastructure. But we don’t care where they locate – they pay the same amount. They can locate next to existing services or the other side of the municipality where there’s nothing – and we charge them the same amount. You know, it's not rocket science to know what kind of impact that’s going to have on land use. There was an article written, oh, about 35 years ago by Wilbur Thompson and what I liked best about it was its title. It was called "The City Is A Distorted Price System". The city distorts prices and those prices distort behaviour and we have to make some changes. The cities need to price services correctly whether it’s user fees, property taxes, development charges, to ensure we don’t over-use services and to discourage things like urban sprawl. So there is a role for cities, even if nothing else changes.

There’s a role for provinces. The provinces need to address the potential municipal fiscal imbalance. If revenues aren’t matching expenditures, and they’re not going to match in the future, either some of those expenditures need to go back to the province or some revenues have to come down to municipalities. I didn’t want to do too much math after lunch but that one’s really easy, expenditures equal revenues. Something has to go up or something has to go down. Perhaps the provinces have to give municipalities access to other revenue sources. Now this is very controversial and I think we may have a debate about it. I don’t know if it’s income taxes, sales taxes, hotel occupancy taxes, fuel taxes. There are cases of this all over the world. Income taxes are used extensively by cities in countries such as Germany, Belgium, Switzerland, Norway, Denmark, Finland. Sales taxes are used at the local level in Sweden, cities in the United States, Austria, Netherlands, Greece – I have a whole long list of countries where these taxes are levied at the local level. But let me say, that to ensure local autonomy and accountability, municipalities have to be responsible for levying those taxes. They can’t just take a share of the provincial or take a share of the federal. They have to set the tax rates and be responsible for those rates. They have to say, this is where we’re spending our money and this is how we’re raising it, and this is the tax we’re levying. So if they want to be responsible they have to levy their own taxes, they have to set the rates.

There are a whole lot of difficult questions we have ask too, and some of these came up already today. Are we going to let all cities have access to additional revenue sources or just some? Are we going to treat the small cities the same as the large cities? I have an answer on that but I’ll leave it for the question period. You’re going to get a different response if you say, ok cities, you can levy an income tax. That may work well in Toronto, it’s not going to work well everywhere. Do we have to treat everyone the same way? And another question we have to ask is where – and this goes back to Frances – what level are we going to levy these taxes at? Is it going to be a city tax – suppose we let cities levy an income tax – is it the cities? The regions? I know she talked about a sales tax and said well, every city is going to be jumping around and competing to attract shopping centres. Well, perhaps we need a region-wide tax over the entire region so you don’t have that kind of competition. So there’s a governance issue also that needs to be addressed to give other revenues to municipalities.

And last, but not least, the federal government. The federal government needs to invest in infrastructure that make cities competitive, and everybody’s been saying this, I’m not saying anything new. Things like transportation. But federal funding has to be strategic. It can’t be encouraging sprawl, It can’t be, you know, investing in roads that then lead to sprawl. It can’t be working against proper pricing. So it has to be strategic infrastructure investment.

Well, the question that I tried to pose at the beginning is: "is there enough money." I haven’t really answered it because I don’t really know if there is enough money. But even if we could answer that question today, it wouldn’t be very helpful in five years from now. We don’t know if cities will continue to have enough money in the future. I think what we need to do is to look at how cities are financed, ensure that they are equipped with appropriate revenue sources to meet the needs that they have. I think there’s a role for federal and provincial governments to play but I think cities also have an important role to play.

JAMES W. KNIGHT, moderator:

I want to thank Enid for that and for pointing out that in fact the senior governments are the cities in this country. Many of them have charters that date back to the 18th century, long before we dreamt of Canada or indeed of some of the provinces. Senior governments are the cities.

Our next speaker is a great friend of Canadian cities. She is Dr. Anne Golden, president and CEO of the prestigious Conference Board of Canada. For many years Anne was president of the United Way of Toronto. Her recent pioneering work on homelessness as Chair of the Homelessness Action Task Force in Toronto constituted a huge contribution to the issues of social inclusion in Canada and we’re all grateful to Anne for that. Please welcome the incomparable Anne Golden.

ANNE GOLDEN:

Thank you very much. I’m very pleased to be here. This is the third time that I’ve been invited to speak at the Couchiching Conference and in the community from which I come there’s a tradition. The tradition is, once you’ve been invited to a place three times, you have permanent right of access so it was a bit risky and dangerous on the part of the organizers, but I am pleased to be here. I am very pleased to be part of this esteemed panel of colleagues and friends, and to be with such a distinguished audience, many of whom I’ve worked with over the years raising the alarm bells about the situation in our cities.

And speaking of raising the alarm bells and concerns about cities, does bring to mind the story of this mother in Russia, in Czarist Russia, who received notice that her son was to be called up in one year to serve in the Czar’s army. And those of you who know anything about 19th century Russia, to be called up to serve in the Czar’s army was virtually certain death, new recruits were sent to the front line. And so this mother was absolutely just consumed by fear and ran to her rabbi and she said, "Rabbi, Rabbi, my son has been called up to serve one year. He’s going to have to serve in the Czar’s army. He’s sure to die, he’s sure to be crippled. What should I do?" And the rabbi said, "don’t worry. Don’t worry, my dear. It’s a year away, a lot can happen. The Czar can die, the war could end." Six months later she receives another notification, a little more detailed about where the son should go. This time she runs to her rabbi, she says, "Rabbi, Rabbi, what should I do? I’ve got another notice, they want him in six months. What should I do? I’m so worried." So he puts his hand on her and says, "don’t worry, my child. It’s six months away. A lot can happen. The war could end, the Czar could die." The day before he’s supposed to report, she gets a very detailed instruction. He has to go to this train station on this platform with this equipment. She runs to her rabbi, she says, "Rabbi, Rabbi, what should I do? Tomorrow morning they’re going to take him, I’m going to lose my son. What should I do?" And he puts his hand on her shoulder and says, "now, my child, now worry."

And I feel like that mother, you know, many of us, many of us in the room as I look, colleagues and friends, we’ve been saying the situation is getting urgent, the demands in the city are growing, there is insufficiency here. And we hear back from those in authority at the provincial and senior levels of government, federal levels of government, either "we can’t", or "we can", or "the constitution", or all of the problems…but even though we’ve been trying to generate a sense of urgency, for some reason it is not being internalized. And I really do believe, out of a variety of events that are happening this year, that the sense of urgency is growing and my message today too is to say, "now, now is the time to worry". And I’m going to speak…I am going to try to answer the question as to why there is never enough money and I’m going to try to do so now that I’m at the Conference Board and in Ottawa, I do have more of a national perspective than I would have had I had been giving the same comments a year ago.

Let’s begin with globalization. The global economy has been very good to Canada. We’re one of the world’s great traders and as a vast and thinly populated nation, we were more ready than most to embrace the new technologies for global communication. I don’t know how many of you saw the paper in the last, just day or two. We just released a report. We do annually a connectedness index, and in this connectedness index we are in fact the second most connected nation in the world, second behind the United States. And we measure all kinds of indicators but just to give you an example, we are first in the world in the use of online banking, more than any other nation – I don’t know if you would have thought that. And we’re also, and this surprised the heck out of me, we are very high up on online government. Our businesses are online. We’re also very high in what they call penetration, or bandwidth. We have other areas where we’re not so high, but overall we are as a nation, as Canadians, eager to embrace technology. From a trading point of view, from an economic structure point of view, in terms of our projections going forward for this year and for the next, we project that Canada will do the best of the G8 nations. In fact, we had to increase our projections for what the growth this year, what the economic growth would be – this was prior to last week’s news but we’re still projecting – we had to bring the projections up higher close to 4% for this year, close to 3% for next year – and so we’re kind of bullish – the Conference Board I say – we’re kind of bullish in the short-term prospects for Canada. As those of you who have heard me speak on recently at other venues will know that I am, over the longer term, much more concerned and not at all bullish on a number of areas. And one of the main reasons I’m not has to do with the state of our cities.

All is not well. A case has been made by many, not just me, our cities are strong in some ways – using Toronto and other major cities…Calgary – doing very well but not flourishing as they could. As several of people have explained today, we’ve had an increase in responsibilities without corresponding increases either in total revenues at the cities’ disposal, or the diversity and the discretion in raising those revenues. So I would say the overall message we should be going forward – and I did read the article in today’s Star so I know this was the keynote message – we need to speak with one voice, that in fact in terms of our major cities, we do need a new deal or whatever language you want to use – not trying to get into the federal political debate, it is a phrase coined by Paul Martin but not exclusively now used by him – and business must make the case, all three levels of government must participate, and I would say the third sector –both for the sake of our economy and for the sake of our quality of life.

I have to say a personal note. It’s gratifying for me personally to see the group epiphany that’s now occurring. I was part of the summit a few weeks ago, as some of you were and I think people are starting to recognize – it was great to have the business, the corporate leaders there, and it was great to see a number of institutions there, many of you were there – about the importance of place, about the importance of people in that place for the new economy. But you know, anything on cities and money I always go back to Jane Jacobs, our national treasure, our guru. She said something that to me is as relevant as the phrase, the sentence was coined today and I always repeat it where I can:

"Whenever and wherever societies have flourished and prospered, rather than stagnated and decayed, creative and workable cities have been at the core of that phenomenon."

Never has that been more true than it is today, when the old industrial and resource-based economy has evolved into the new knowledge-based economy, where the human mind is the primary creator of value, value derived from innovation. And you know, we used to think of land as being a creator of value, we used to think of our resources as generating value – and it is a switch for people to internalize the concept. We’re all kind of academics in one way or another, policy wonks, I guess, and so for us these concepts, we’re able to articulate them and understand them, but for the average person to understand what the implications are, the importance of the human mind as the primary generator of value at least equal to former drivers of value, is huge.

We’re hearing a lot about innovation. Innovation may be something of a new "buzzword" these days, but it’s a concept that others have mentioned today and I’m sure you all recognize. What is it really? And I know the federal government – and I’m involved with this because we’re partnering the innovation project with the Ministry of Industry and HRDC. What is it really? It’s about creating and using knowledge to develop goods and services that add value in the marketplace. I’ve tried to kind of coin a phrase to help people understand what innovation really is and the best way I can describe it is it’s the "eureka" of discovery partnered with the savvy of sales and marketing. The two have to go together. There has to be a "a-ha", the creative side, but there also has to be savvy that leads to the commercialization. The ability to use knowledge to create new goods and services that people will buy.

And innovation in a knowledge economy happens primarily in cities. And this again was a concept first articulated by Jane in one of the earlier books that I read of hers, in which she reversed the traditional -myth really – that the origin for a lot of the ideas that come from the hinterland and that it were the cities that were the users and exploiters of this. And she pointed out that even, for instance, farm equipment, the creation of tractors and that, had occurred in cities and then was given to the rural citizens for use. So, we’re finding out more and more about this – people at the University of Toronto, [inaudible names], you know the names – we’re learning more about the exchange of ideas among skilled people. R&D investment, corporate culture’s important, taxation policies, regulatory policies, all these and more also have a role to play in Canada’s innovation performance, but it’s all about the exchange of ideas, and that exchange of ideas is was is central to innovation.

There is on your chair a diagram. And I gave you that diagram because I like to work with to trace the connections between cities and innovation, to try to make the concept more clear. I believe, the Conference Board believes, that a better performance on innovation is Canada’s best strategy for boosting economic productivity and thus the wealth of both individuals and nations. And you know, this might sound…of course…but you know, how many years ago…do you remember when the concept of productivity was first created? I remember hearing about productivity back in the late 1970s and what was it about? Was it about innovation? No, it was all about efficiency. Holding wages down, cost cutting, the notion of adding value through generation of ideas and that productivity was about innovation was not present really until the last few years. So this is a very important switch in mindset. As a nation, we draw on our public revenues to maintain our quality of life – our health, education, and social programs as well as our physical infrastructure and our environmental programs.

And if you follow along that chart, the quality of life is what the whole innovation and productivity pursuit is about. The benefit of increased wealth for the country is realized only if it enriches our society, our environment, as well as the economy. And I guess as a reality check, imagine increased national wealth accompanied by widening income disparity, increased crime, or rising levels of air pollution – and we do see that. We do see that in certain Latin American countries, where in fact you have tremendous wealth that’s highly concentrated and it’s concentrated behind police and barbed wire walls. I have a niece who lives there and it’s hard to put that together with improved quality of life. You have to take a very different point of view about what is quality of life. Certainly that’s not what we as Canadians are trying to accomplish.

With 80% of Canada’s population now living in cities, quality of life is what most Canadians now experience as city living. And it’s in cities that most people experience the play and interplay of a whole host of public policies – policies related to health care, or education, or immigration, or and trade and investment. More than ever, we need to look at each of these policies through an urban lens to see how well they are supporting our quality of life.

Then if you follow that chain around in the diagram, a high quality of life helps Canada’s cities to develop their human capital. A high quality of life helps cities attract and retain skilled workers. One of the thrills of doing the GTA study, one of the thrills of Richard Florida’s work for me, again, was having some, now we have concrete evidence to prove what I had always intuitively believed. But you know, you can believe something but to have the documentation, to have 85 CEOs tell you that the reason they locate in a certain city is because they have the amenities or their wives feel safe, it was always their wives because it’s usually men, aside, or their…good schools for their children to go to, that was part of the decision of where they move their business, that was reaffirming. We assumed that, but to have the evidence was very satisfying. It also supports the social and education programs needed to develop our human capital, to improve our current low rates of adult literacy – we could do a whole speech on adult literacy, we’re not good enough for a county of our wealth by any means and we don’t show well in the index of comparitors we do anually – to engage more students in science and mathematics programs in our public schools. The bottom line is, we need to invest heavily in human capital if we wish to succeed and to be competitive.

And so we have come full circle on the diagram, and in that diagram I have put cities are at the centre of this new economy, because it’s the cradle of innovation and the venue for wealth creation. And I was pleased to see that Tom Courchene, who for a long time was not interested in cities, and I met him down at a conference…it was interesting, I was in at a major conference on globalization and Tom was there speaking on cities, and I said , "how come you’re speaking on cities?" and he said "well, I’ve started to get really interested in cities", and then he…and now he’s become a powerful advocate for the point of view that businesses today draw more and more of their success from their location in cities, from their access to skilled labour and basically from the buzz, from the buzz that’s created by having creative, talented people working in clusters.

But our cities are not doing well. Canadian cities today are charged not only with city building – that’s the roads and transit and other infrastructure, Enid, that you referred to, but also, as has been mentioned by now all three of our speakers, to shoulder a large portion of the responsibility for social programs, or at least a larger portion due to the offloading – and I will not repeat that. Over the next decade all three levels of government must renegotiate revenues and responsibilities, and ultimately engage a broader range of interests in determining just where and how we want to spend our money.

I’m going to talk a little bit about how realistic I think that is because we’ve already had two of our speakers talk about whether that’s really possible. We have to do this in part because as we age and change as a people, our needs are changing. Now we’ve done a lot of work on the cost of health care and five years ago we produced a study showing that the current pattern is not sustainable in the long term, and called for a national task force, which, as you know, we’re now waiting for the results from that task force. And it’s not just because we’re getting older, I want to say that also. It’s not just that because people are getting older. The cost of health care is rising because of technological advances that are permitting costlier interventions, it’s rising because of inflation, there’s a bunch of factors that contribute to the rise in health care cost. But it is true that most of the health care costs are spent in the six months before you die and most of the people who die tend to be old, so that’s why. But I often…I just want to correct the impression that somehow it’s the aging that are responsible so we should put them out on ice floes sooner and the reason I want to correct that is because I’ve now entered that category of aging and I’m now redefining, actually. I think it’s very boring, the whole name, the word aging is a boring word I think we should change it. Now…good, we could have a little agreement on that. OK.

At the same time the point has been made, and you will read that because we are having fewer children as you look at the demographics – David Foote, demographics is all – but in fact it’s not all because as you look at the decrease in school age population in theory, education spending could be reduced, maybe, but we don’t think so. Why? It’s more complicated now to educate our students for a whole bunch of reasons. We demand more of our education system. The social demands because of the changing parental structure, family structure, poverty, etc…immigration, the fact that 70% of the immigrant children who come to Canada’s three largest cities, 70%, will neither will speak English nor French on arrival. This presents challenges.

And when I…one of the blessings, and there were so many, of working at United Way is that I really came to understand a lot more than just what poverty might connote to the average individual. Poverty is literally, you say, oh gosh, there’s people who are below the poverty line and isn’t that a shame but it’s…and the question is about is Toronto unique? Certainly, Frances, you have to say Toronto, it is unique in terms of the concentration of poverty, by census tract, and by depth of poverty. And we’ve done so much work on the homelessness task force which I don’t have time to reveal now, but it is very important to understand. It’s not just about the numbers of people that are poor, when they’re concentrated living together, tightly together, changing the norms of a neighbourhood, that has a multiple impact. And we now turn to our schools to our schools to provide opportunities for all our children to succeed, but we are going to have to spend more on each of them to achieve their full potential.

Looking towards the future, and assuming no change in current budget or fiscal policy, the provinces will be carrying both the cost of education plus the rising cost for health care and social costs. We just did a major study, I don’t know if any of you saw a reference to it but it within [PremiersNet] last week and it was called…on the vertical fiscal imbalance between the federal government – and Carol, you will know about this study and I know that it is a little sensitive because we did use the term fiscal imbalance. Maybe we should have said gap. But it is a fiscal…we stand by the fact that we think it’s a fiscal imbalance and we did document the fact that Conference Board straight-line projections, it’s not a forecast, we believe that over the next twenty years, the situation is, the provinces by and large will have a tremendous gap. Now, the situation will vary on each province depending on population growth, age structure, economic prospects and current state of budget. Alberta, for instance, could be debt-free by 2010, but Quebec and Atlantic Canada, maybe even British Columbia will likely still be struggling to balance their budgets.

But at the federal level, and I want to say something positive about this, because the federal government in the last five years did such a great job of getting our fiscal house in order, kudos, long term prospects are rosier. And our projections, based on current tax rates and spending policies, show that over the next 20 years, the federal government will be able to meet the costs for programs under its jurisdiction –old age security, employment insurance, etc, transfers to the provinces under the Canada Health, etc – and remain debt-free and indeed be able to repay almost all of its interest-bearing debt.

So this gives me in part confidence about the future of Canada’s cities and our quality of life here. My reading of Canadian history is that while federalism is cumbersome (Lord knows) the long swing of history shows that it can be flexible, and in the past our federal government has balanced responsibilities and revenues between the federal and provincial governments – sometimes you have to wait long enough. Our great moves forward have been achieved at those times when the federal level was financially sound. If you look at the 1960s, the federal government launched the Canada/Quebec Pension Plan, introduced Medicare, dramatically increased spending for post-secondary education. Now, I hear someone ready to shout back "sure, but the 60s also introduced a long period of deficit financing at the federal government", but when the programs were introduced it was done in good faith and they were sustainable at that time.

I’m moving to the conclusion. I’m often asked "is there is any hope that Ottawa and the provinces will take the necessary actions to ensure prosperous and livable cities?" Here I want to be very, very honest to that I used to…I’m an optimistic person by temperament. I used to say "yes", and for two reasons. Because we are reaching a new level of collective understanding that Canada’s strategy to become more economically competitive, which is fundamentally now going to be tied to innovation, must embrace both economic and social dimensions. I don’t hear anymore, even business leaders, I don’t hear them say "oh, either we have to achieve economically or not be able to provide social programs" – and the importance of the Charlie Ballie TD Bank project which we’re partnering with, is that it’s the head of Canada’s top corporate leaders and the bank that is saying this. A decade ago, as I said, we were focussed on cost cutting as the fundamental strategy for competitiveness. Today, our business leaders are linking competitiveness to a broader, more inclusive agenda, including innovation and investment in cities.

And that is my second reason for optimism…

[TAPE 2, SIDE 1]

…are all looking for a new deal for Canadian cities.

However…there is two howevers I want to throw out. First is the natural reluctance of any government to surrender power. Frances made the point that if the cities were really that rich and important then the provinces for sure won’t let them go, and that’s a sobering point and one that must be respected. The second reason is the political scene in Ottawa. We have no opposition other than within the Liberal party and I say that not as a joke. I mean that there is no coherent opposition that is pushing the already progressive, you know, the party that is lodged in the center, embracing the progressive terrain, pushing them, demanding of them to move on cities, and to surrender a certain amount of power on that. Those are two very important qualifications.

However, to end on a note of optimism, we do have momentum, we do have focus. These are the two critical ingredients for change, and they are intensifying. I look forward to being part of that change with all of you. Thank you.

JAMES W. KNIGHT, moderator:

Well, thank you all, a great panel and great discussion – I look forward to the question and answer period. Now we’re going to have a little break, you’ve all earned it. We’ll come back when the bell rings and we’ll get into some discussion. Thank you.

[break]

…and possibly answers. I’ve been asked to tell you that tomorrow afternoon’s format involves outdoor discussion groups. You’re invited to drop in unannounced to the various groups and depart without fanfare and rotate as you see fit, so that should be quite interesting. We have our first question.

Q: Ok, hello. My name is Susan Bellan and I’m a Toronto businesswoman and a economic consultant and also co-founder of something called the Toronto Dollar and I’d like to offer up something that I consider a tangible solution – everybody’s sort of coming up with sort of vague ideas and this is very tangible and very practical and doable. When we talk about innovation it seems to me we’re always talking about technology whereas I think it’s time to be actually innovative and that’s what the Toronto dollar is all about. I couldn’t help but note when Shirley Hoy talked about the Toronto budget, $6.5 billion, and I hear there’s a shortfall of about 300 million, that’s only 3%. It seems like a lot of money, I mean, I see the city running, behind all the time for that 300 million, it’s incredible that it’s only 3% of the budget.

Now I’ll just explain how Toronto Dollar works, we’ve had it going for three years now. Let’s say you go to the St. Lawrence Market – we have over 200 businesses in Toronto accepting the Toronto dollar – you go to the St. Lawrence Market, you exchange $100 Canadian dollars for $100 Toronto Dollars. You can go and buy $100 worth of groceries at the market, just as if you were using Canadian dollars. But the difference is that $10 of your Canadian dollars goes into a project fund and $90 of your Canadian dollars goes into the reserve fund. So that means that the merchants who receives your, the merchant, let’s say, who receives your $100 Toronto Dollars then has two options. One is, they can re-spend that Toronto Dollar at par with other merchants, so they can get $100 of goods from other merchants. Or, if they need to pay their suppliers who are outside the system, they can convert back into Canadian dollars but they get 90 cents on the dollar, they get $90. So that means that, because there can only be a 90% claim on the original $100, that means that 10% that goes into the project fund can never be reclaimed for anything, the second someone buys a Toronto dollar that money is there.

So what we’re saying is like…I cringe when I hear "oh, let’s raise taxes more" in some shape or form. I have to tell you that my business, I’ve been in business 23 years now, when the GST was introduced, my business fell 20% overnight and that happened to pretty well everybody in Canada in business. So you start increasing sales taxes in cities people will go buy elsewhere. You’re just hurting all your businesses. You increase hotel taxes, I’ve been talking to hoteliers, you’ll just hurt your hotel industry, so I mean it’s really counter-productive. Now, as far as…I did a calculation like, in Toronto, there’s 8,000 businesses in the Toronto association of business improvement areas who are behind our approach, by the way, and who are on-side with us. So, this is like real seat-of-the-pants accounting but I guess if there’s 8,000 in the business improvement areas there’s probably 20,000 businesses at least in Toronto. Shirley probably knows the exact amount, but I don’t.

Shirley Hoy: 60,000

Q: If you divide 300 million by 20,000 businesses, everybody’s taking, on average, $15,000 of Toronto Dollars each a year to help the city out. I spoke to one of the members, one of the participating merchants in Toronto Dollar about how much could you handle annually, and this guy’s a one-man juice store, ok, so it’s not like some big organization, and I said "could you do a $100 a month?" And he said "oh yeah, of course." And I said, "could you do $500 a month?" "Oh, yeah." I said, "$1000 a month?" And he said, "yeah, no problem, as long as I could spend it everywhere".

So what we’re trying to do – we’ve made a representation to the city of Toronto and it’s sort of up in the air but at least I credit Toronto for being innovative – but I mean, in my business, I don’t wait until everybody does something. I go first and I think we’ve got to have the guts to go first rather than watching what everybody else does. We’ve been talking about banking, about how we were the first in the debit card industry so, oh yeah, the way we see Toronto Dollar working it would be part of the debit card mechanism and when you use, you pay with your local currency, they’d say chequing account, saving account, Toronto Dollar account and so it would just be part of the existing system and you could pay part of your taxes in this. And so, I guess what I say is that the possibility is there, we’ve got to, people, no more empty platitudes, no more wringing our hands, expecting someone else to bail us out. Nobody’s going to bail us out. I think we could be waiting for years, waiting for various governments to bail us out so I encourage municipalities to use some ingenuity, be inventive, but actually get out and do it. So, any comments?

Shirley Hoy: I think this indicated…it’s a good…it started in the St. Lawrence Market area, we’re looking at whether it can be extended into other areas but I think it’s an approach you can take community by community. I’m not sure when you say take it Toronto-wide whether there is that kind of support yet. But it has to be absolutely supported by the local merchants to make it work. It seems to me the innovation part, when we met with the group that came up with the idea, was because you put 10% into a fund, that basically help the people in that particular neighbourhood, is the way it was presented to us, it made a lot of sense. It’s almost like back to the bartering system. It was using services, somebody provided service, the use of 10% of the fund in order to set up that kind of a service, especially when it was first set up, targeted to some of the homeless guys who actually had skills to offer, so there was an actual program that benefited that community. So, we were actually looking at a way to promote it through the BIAs, business improvement areas, because if those organizations take it up, they can offer it and it can go community to community.

Q: I think Toronto has been supportive but it only will work if it’s city-wide. It’s one of those systemic things that you need to be able to spend it everywhere rather than just a few places. Also, we see it operating on two basis. One is that it will raise a lot of money for community projects and local charities but also once it’s set up everywhere, then the city could decide to use it for their own ends and so if the city took some of its budget, let’s say $10 million of budget, and converted it into Toronto Dollars, well, $1 million, 10%, instead of going into local project, it could be used by the city, now it’s got 10% extra to do something else. So, I guess what we’re saying is there is a way where the city, instead of being reactive, and just sort of reacting and falling behind the 8-ball and then this compounds more problems, that it could somehow come up to par with enough money and then go beyond that and actually be proactive and have some extra money and be independent – because the other thing to is, if you go the federal-provincial handout route, whatever they give, they can take away, which we’ve seen – whereas this gives the city some permanent independence.

James Knight, moderator: I have to comment about the word handout. The federal government and the provincial governments generate enormous tax revenues from cities. What we’re asking is that they return a bit more of it. It’s not a handout at all.

Q: Yeah. That was a bad way to put it, but you’re right. It’s just…you can go and do it rather than having to sort of ask for it.

James Knight, moderator: Thank you. Yes, ma’am.

Q: Hi. My name is Carissa Whiteman and I worked for the City of Toronto in the Healthy City office for ten years but now I’m a happy academic, working on my Ph.D. There was one thing I was really expecting to hear from this panel that I didn’t quite hear yet, and it came to me most strongly when Enid said point blank, property tax is a good tax. When we’re talking about financial sustainability, especially in the context of social sustainability, what about the equity that’s within various forms of taxation? Property tax is an inherently regressive tax because you’re taxing a basic need, which is shelter, and in Toronto, for instance, renters pay four times as much in property tax as homeowners do. And of course, homeowners can reel off their numbers really easily but for the renter it’s hidden and quite high compared to what they would be paying if they were homeowners. Now that might be changed but even if it was changed, what you’re taxing is…we know that poor people spend more of a proportion of their income on shelter than other things. It would be like the federal government getting a major form, 53% of its income, through taxing food. I mean, that might be seen as inherently problematic and I see that property tax is inherently problematic thing.

Again, the idea that property tax is highly visible vs. income tax being invisible, I actually see that as a fairly good thing about income tax. I mean, when I give blood I don’t actually want to see the needle going in, and if I do see the needle going in I might go, "hmmm". You know, like when I got my property tax and it said $4.73 for World Youth Day, leaving aside any feelings I might have about World Youth Day, I went "hmmm. Was that worth $4.73, precisely, to me?" And I’m not sure that’s the kind of questions that we want to…it’s an interesting question whether we want to encourage people to be asking, "what’s the value per money for me?", because then of course people will pay education tax would say, quite rightly, if they don’t have young children, then "why am I paying education taxes again?" You know?

So I guess my question for the panel, and it was alluded to a little bit by the previous question, which talked about the problems that might be inherent in a municipal sales tax, is how important is the regressiveness or progressiveness of particular taxation systems in solving the fiscal problems that cities are facing?

Enid Slack: I guess I should start. I heard the word property tax. Firstly, it’s by no means clear that the property tax is a regressive tax. If you look at the studies that have been done, it is not that regressive. People in very expensive houses pay more taxes than people who live in apartments. The way it’s currently implemented is regressive because of the way we treat apartments vs. single family homes. There are things that we could change, and I think I mentioned a couple of them, policy changes we could make, that would make it less regressive. But I think the sales tax is more regressive, actually than the property tax. It’s not that regressive. Secondly, the visibility. Well, I believe in accountability. I actually do watch the blood go out. I’m a control freak, I want to know where it’s going. I watch it very closely. But…if they screw up I want to be there. But I think accountability is very important because this morning talked about accountability a lot and it’s a much more accountable tax if you know what you’re paying. So there is somewhere where we’re just going to disagree. I like the visibility of the tax. But let me tell you, and I wish I had more up-to-date information, about – I hate to say this because it ages me but- 25 years ago, I did a study because everybody was concerned about the property tax, let’s get rid of it. And to remove the property tax at that point from the system – I think the provincial tax in Ontario was 50% of the federal – it would have gone to 70%. That’s not going to happen. We are not going to be the least competitive province in the country on income taxes and get rid of the property tax. The property tax brings in a lot of money. So if you think it’s regressive, let’s fix it. But we’re certainly not going to get rid of it. One more thing on regressivity, we do have property tax credits that renters can get, even students in residence can get – I always teach my students this, they run out of my class and claim their $25 property tax credit – there is a tax credit that says, ok, if too much of your income you’re paying in property taxes, we will credit you money back and it’s a refundable credit and you actually get the money back. So firstly, I don’t think it’s all that regressive, secondly, I think we could fix it to make it better, thirdly, I like the accountability and fourthly, we can’t replace it.

James Knight, moderator: Yes, sir.

Q: John Butcher from Ottawa. My question is, how much more efficient and effective and sustainable do you think urban communities can be and how much better might our lives as citizens in a globalized world be if we got rid of the provinces, and redistributed the revenues and powers upward to the federal government and more importantly downward to urban areas? I guess the shorter question is, in light of all we’ve told around demographics and the shape of cities and where people go and where the economic generators are, are the provinces now obsolete?

James Knight, moderator: Who would like…

Q: I was going to ask Enid first, but maybe I’ll ask Anne, since she’s escaped the clutches of the GTA right now and is in Ottawa.

Anne Golden: Ok, is this on? [inaudible comments] I have seen arguments…there was an article recently that I read along those lines that…originally, the original literature around globalization talked about nation-states becoming weaker and that the primary sources of power in a global economy would be first of all, international corporations, and secondly, cities. It was all about the kind of reduction in power and the importance of nations. I’m not seeing that. In fact, I don’t see that the role of nations is any less important in the current dynamic. And the dynamic, of course, has been altered quite a bit now because of the uni-polar hegemony of the American…of the United States. And so I did…and I have since seen articles written that the provinces have become, that they’re either redundant or they’re not necessary, but I do not know of any serious research that has really looked at the implications. But let me say this. The point I would make, based on work that we’re now preparing to publish for the fall, as we look ahead to the Canada 2010 and what are the primary challenges that face us, among the challenges that face us going forward in a global, in the new global economy, has to…two are the result of our current constitutional structure with provinces. One of them has to do with our current approach to equalization and restriction on mobility and the way we…in other words, for instance, unemployment, our whole approach to unemployment, that the notion that we want to fund people to stay where they are and should we be re-looking at...it’s a very sensitive, hot question to ask. Should we be re-looking at the extent to which we subsidize communities to stay where they are rather than encouraging what economists would call a more efficient location of workers, that is where the jobs and where the clusters are. But that’s all premised on the importance of provinces, etc, etc. The second fact is the strength of regionalism and separatism regionalism in the country and it’s not just in Quebec, it’s Western and it’s Eastern and so those are real forces to contend with. And the third have to do with barriers among all the different provinces. Let me give you two examples there that are really hurting us. Take the whole question of stock exchanges and the financial markets. You would think that we would be concerned. We are trying to encourage investment in Canada. That’s a big, big issue for us. We should be concerned that we have eleven different…we have a federal regulator, we have ten different regulators and absolutely no agreement among the provinces for our markets and there’s been a proposal for a long time to have a single standard for regulation of our stock markets and not withstanding the logic of it, I think the logic is very, very clear, the political force against it is so strong, the political culture is so embedded, you know, so that…I think the question you’re asking is a very interesting one. I think academically it’s not been thoroughly researched and I think though it’s more, almost asked, it must be being asked as a bit as a fun question too, because it would be quite remote in terms of the current political culture in Canada to envisage that being possible.

Q: Well, I mean, if Barbara can say well, in 1849, you know, duh, it does not make any sense, why does something only eighteen years older than that somehow sacrosanct? I mean, it’s not…I don’t…it was a fun question, but I am increasingly – I’ll make it a statement then – having trouble seeing where the value-added in my life as a local resident and as a national citizen, what value-added comes from the provinces that could not be provided locally or nationally?

Anne Golden: And I’ll only say this, that I think a lot of people would in theory, theoretically be interested in the same question and probably agree with you but I was trying to…and I do see tremendous problems created by…I mean, our constitution, we are impaled on our constitution in this country.

Frances Frisken: Can I say something?

James Knight, moderator: Yes, go ahead Frances.

Frances Frisken: I guess if I reverse the question I’d say, who is going to do it? I can’t see the provinces doing it. I can’t see the federal government doing it. I mean, I think we’re stuck with the system we have. We’ve had it for quite a long time and…but I also wonder if it would make that much difference. I mean, I think part of the problem for our cities is that we are not an urban country. We’re an urban country when you look at figures, definitely. The statistics say we are an urban country. As a nation we don’t think in an urban way, and you don’t have to go outside the boundaries of the City of Toronto very far before you find that out. You start talking to people out in some of the smaller towns in Ontario…I recently took a trip to Newfoundland, which is a long way out…I have a daughter who lives in Vancouver, she’s urban in a Vancouver sense, but she is certainly not urban in a Toronto sense. I mean, you know, she has become indoctrinated, which is very sad for me but it’s…we’re not a country that values cities very highly. And this really comes home to me, I’m very, very fond of France and we’ve spent some time in the south of France, and what strikes me when I go to the south of France is the number of people who live in the south of France who love Paris, who can’t wait to get to Paris, who work in the south of France in the summer so they can make enough money so they can live in Paris in the winter. I have never heard a Canadian say they are putting out so they can spend some time in Toronto. I think this is, you know, this is a cultural problem. It’s very deeply imbedded in our culture. I talk to you, you’re all city people or you wouldn’t be here, or you’re city lovers, but I don’t see that many of you when it comes to votes, when it comes to electing MPs, when it comes to electing provincial MPPs, that’s where the problem is.

Q: I guess, Frances, I’ll express the frustration I felt this morning and now you and Annie, bless your hearts, have reaffirmed it, we were harangued this morning about citizens getting in there and telling people what they want, we were harangued to make a difference, and then most of the suggestions that have come up, the response has been from all of the speakers, "oh gosh, we can’t do that, because that’s not the way it is." And either we’re wedded to just kicking the problem around or the adjectives that you used this morning are real, then the response is, we’re impaled on the constitution, may be therapeutic…

Anne Golden: But we are.

Q: …but it’s not going to work in the long term. We have to become unimpaled from the constitution or else we become wedded to conferences talking about urban issues.

Frances Frisken: But how would you like to do it?

James Knight, moderator: Have a first ministers meeting.

Q: …you know, and that’s a real frustration from what I heard this morning and what I’m hearing this afternoon. Good articulation of the problems and then when anything outside the box comes, whether it has merit or not, doesn’t matter, it’s "oh, I’m sorry, we’re stuck with the system we’ve got".

James Knight, moderator: Thank you sir. The next question, Mr. Rusk.

Q: Right. Myron Rusk, marketing research consultant – that’s as much of a plug as I’ll give. My question has to do, or my comment has to do with airports, which is an example of downloading where the, as I understand it, the federal government had given a number of cities the airport and the expense of maintaining them. Is this a direction that you encourage or opposed to, or how do you feel about it?

[?]: I don’t know about it. Do you know about it?

[?]: Jim? We don’t know much about it.

James Knight, moderator: I’ll comment.

[?]: You go ahead.

James Knight, moderator: Certainly it’s worked quite well for the larger airports, which have a traffic volume that can sustain the infrastructure. I think, for the most part, the large city airports are successful economically and they, by user fees, have done a good job in some cases of enhancing their capacity. Vancouver airport is quite marvelous, there’s a new Ottawa airport that is coming along, new facility in Toronto. It’s the medium-size and small airports that really, and small communities, that have been struggling with this policy. There isn’t the traffic volume and revenue flow in many cases and there is a concern that we’ll lose some of our smaller airports and compromise access to most distant regions.

Q: Maybe just a further comment. I believe the GST is a good tax, I don’t think it’s damaging, it replaced another tax, but the airport tax is an add-on tax I think there’s a question between visible taxes and invisible taxes and what the local airports charge is extremely visible to passengers.

Enid Slack: But not regressive, particularly?

James Knight, moderator: So go ahead, Anne.

Anne Golden: After this question I would like to make a comment on the prior question again.

James Knight, moderator: You want to go back?

Anne Golden: I just want to go back to – what’s your name again?

Q: John Butcher.

Anne Golden: John. I just want to go back to your question about how we make change and as soon as ideas are suggested that are out of the box that we immediately shut them down by saying this is the reality. And I personally have, I don’t operate, I didn’t want to give that impression that we can’t do it because. At the same time, on issues that involve the constitution, it is very tough, realistically. So if you think throughout our history, there have been certain points at which major changes have been made and change theory is all about how do you create the burning platform, what will create the burning platform. So let me give you one example going forward. There is a growing interest now in Canada’s competitiveness, a growing concern about our relative decline in the standard of living as represented by our dollar and the low dollar being a kind of symbol, or substitute for a standard of living and the…so that there’s a number of people looking at it, a number of organizations looking at how do we improve that. Out of that ultimately – or take, another good example would be the crisis we’re experiencing with capitalism out of the recent Enron, WorldCom, creating not just a fear about governance, but we are seeing major changes in behavour. An example in the U.S., President Bush has just enacted, the congress has just enacted new laws that just a few months ago, and I was part of an international conference discussion on this, a few months ago it was considered impossible because the American approach to governance was very much, we’ve got the rules in place, it’s just a few bad apples. Now people are saying it’s not bad apples, it’s the barrel. And because it’s a concern about the barrel you’re starting to see some changes there. How you create that sense of urgency, going back to the initial joke I told, about the plight of our cities, in a context, or ultimately it has to come down to politics and we have to have political leaders able to express that point of view and we have to have a willingness at the different levels of government to listen to it. Enid and I work together, and actually I work with Shirley on this too, on issues of jurisdictional gridlock, sandbox politics – all of that is part of it. But we have seen…don’t be too discouraged because changes have in the past occurred that are very significant. We’ve gone through period of watershed, major new…you know, after that post World War II there was tremendous changes occurred in our social infrastructure because there was perceived to be a major need for that kind of change and hopefully, maybe it’s true that the innovation agenda, whatever it is, hopefully, and I remain hopeful, there will be that change in the climate of opinion that says the world has changed, we have to change our representation, ultimately representation in Parliament will catch up with the demographics. We do have to pay attention to our cities. Whether it will result though, in something as radical as actually eliminating the provinces when there is other economic rational for having them and tax theory, etc – that was the part I was saying would be the toughest. Sorry, I didn’t…I think…you asked a very important question about why keep fighting if there’s no hope for change.

Q: Thank you because I’m with John, very much so, and I’m a great believer in the art of the possible and I do think we a facing a huge change in size. Canada was formed as an agrarian, buggy-driven society and as soon as the railway was put across, we changed it from a country of yea, to 65,000 miles wide and a 1,000 miles long – I still use miles, you can get my age from that. But there it is. So we are going into huge changes mentally. We’re going to grow, as it gets warmer we’ll get some more lettuce [?] land. But looking at John’s suggestion and I hear the needs for the larger cities. There’s no question, it’s coming, we’re fighting it, but the mayors not withstanding, we’re going to have ‘large’ cities. And rather than doing away with anything, I would suggest three new provinces. It just happens to be Montreal, Toronto and Calgary. And that would be well within our constitutional rights, our law, we’ve already reformed how many provinces in the north, so we add three more. And I could see this as a very viable operative system, a positive way to transfer power without taking it away from anybody. The same power will be there, the Province of Ontario will have exactly the same power. As will Toronto…

Anne Golden: They won’t have the money. They’ll be missing 50% of it.

Q: Oh, well that. I forgot about that.

Frances Frisken [?]: Ontario would turn into a have-not province.

Enid Slack [?]: I wanted to ask a question. We should have asked it last night. But when we look at the title that’s leading this dialogue for the period of time that we’re here, Cities And Globalization, Communities In A Changing World, we didn’t define what we mean by globalization. And it’s a bit late to be asking that question. I’m just sort of going to put it out there because it depends where you are, where you’re coming from, how you define globalization. I want to go back to John’s comment and whilst I really support the notions that John is bringing up, I am a Canadian first. I was born on Vancouver Island, I’ve lived in Saskatchewan, I’ve lived in British Columbia, I do live in Toronto now and have been privileged to work pretty well in every jurisdiction, including the three territories in Canada, and once you find yourself as a Canadian you sort of break out of the territorialism that we have in this country as provinces vs. the feds, and feds vs. the provinces, and the provinces vs. the cities, and the cities vs. rural. And we tend to go through this argument and this positioning all the time and sooner than later, I think one of the things that we need to do is to think of ourselves firstly as citizens of a country, and secondly, we need to somehow have our leadership get beyond this notion that we’re ten little countries and maybe three territories all in a row rather than our country and then we might be able to deal with some of the… in a very effective and positive way with Canada’s role in globalization, which is huge. But I think we need to define globalization because if it’s only about economics and if it’s only about some multinationals, a handful of them, becoming richer, then we’re all in a bit of trouble. And if we don’t…if we do this, Anne, there’s some jokes you’re not going to be able to tell at the beginning of your speech. Like, what happens to the federal-provincial jokes? Is it a federal or provincial responsibility and all that.

Q: Hi. I’m Margaret Lefebvre but I’m speaking actually out of my experience as a city councillor. And one thing bothers me terribly about what I heard on the panel today and that is the presumption, or the assumption that payer fees, or as you go...

Shirley Hoy [?]: User fees.

Q: User fees. Thank you...are somehow an inevitable and clear rational good. I came from a municipality where we managed to not have user fees and we did it because we built those costs into the tax structure. We did it, largely were able to do, because by going back to Christine May’s question this morning, we did ask what were the expectations of the citizens, what did they think they were getting for their tax dollar, and then said these are the options. We can’t give you everything but we can give you these things. Now would you please make a decision as to what you’d like. And in some cases, for example, in the case of our library, it was very clearly the desire of the municipality to have a state-of-the-art library. This was not included in the tax structure. We went out, we raised money, we did it. But so often I find that the presumption that you can impose user fees is simply a band-aid applied to a system that is not working in the first place. Water user fees, for example, are very often a mask for the fact that the water leaks from the moment it hits the filtration plant to the moment it actually gets to the home. So I just wanted to raise the question of why – am I correct in feeling that you believe that this is inevitable, or more importantly, that it’s correct?

[?]: It’s inevitable because of the need for money, but that’s not why I support it. I support user fees because they’re correct. They give the right signals. For example, with water. If water’s paid for out of property taxes, it’s virtually the same for everybody. It just comes, and you’ll wash your car, you’ll water your lawn, you have no concept of what it costs to get that water to your house. And it’s, people act rationally, if they’re aren’t paying for their use of water, they’ll use it. And by the way, people who have two cars, big lawns, use a lot more water and are subsidized a whole lot more in a system like that than lower income people. Secondly, if we’re not charging directly for water, then people will use a lot of it, the price is virtually zero, they will use a lot of it, then we need the infrastructure, we need the water treatment plants, we need to provide this water. And so, we’re not – you know, people aren’t really telling you what they think it’s worth. If you charge them for it, they will then tell you by how much they use. As for the leaks, if you’re charging for water, then you’re going to fix those leaks pretty darn quickly, because it’s expensive.

Q: In a situation like Montreal’s, obviously, fixing the water leaks is a question that absolutely has to come in under a federal infrastructure program. But I simply would like to challenge your view that people will not know how much something is worth if they’re not directly paying for it. People have already paid for it. People have paid for it – people are paying for school taxes, they don’t have any children.

Enid Slack: If you – well, school taxes are different. If you don’t want user fees for everything, and schools would be one of the things that you would want to pay for – I would say out of the income tax, not the property tax, but that’s a separate issue. There are some things you can charge user fees – not everything. Take garbage collection. If we charged people for the bags they put out, I think people would put out less garbage. I think they would recycle more. The evidence of studies of places that have done that show that to be true. That’s good policy. Less garbage is good. Less need for landfill sites. By saying – by charging people – what did I say, $4,791 in property tax – they, that doesn’t affect their use of water. That doesn’t affect the garbage they put out. It doesn’t affect any of their decisions that they make. People have to know what these things cost. People have to know what these things cost, and then use the amount based on what it costs.

James W. Knight: All our panelists want to speak, and so in order, Frances, Shirley, and Anne.

Frances: I think Enid is making a case for a graduated fee, perhaps, and a basic service, and what people use over and above that they can pay, and I can go along with that, but there are certain services, I think, that originated as, out of a kind of sense of social responsibility, and I include them in these parks and recreation services, library services, they were introduced a very long time ago as a sort of, to, as benefits for those people who couldn’t afford big backyards, who couldn’t afford swimming pools, who couldn’t afford to buy books, and so forth. And one of the thing that I discovered in this immigrant study that I did – immigrant and local services – as municipalities begin to charge user fees for some of these services, not only are they creating real hardships for people at the lower end of the income scale, who, but they are creating perhaps hidden costs that are going to have to be paid later. For example, if you don’t provide recreation services for your youth, or if your youth can’t afford them, then your youths are going to go out and find something else to do, which may be socially much less beneficial, and you’re going to pay for that in other ways. Libraries, we discovered, and one of the most interesting discoveries, because we had sort of left libraries out the study, and went back to it later, because we thought this is probably fairly peripheral – it wasn’t. Libraries are absolutely central in terms of immigrant settlement. That they probably provide more in the way of a service to immigrants that probably any other municipal service, because they provide information, they provide access to the Internet, the provide places for community groups, and so forth. You start charging fees for that, and these people who can least afford those kinds of services will be left out, and you know, you’re increasing your settlement costs in other directions. So I think one of the complaints I have about a lot of the calculations that go on in public finance is that very seldom are the spillover costs, or the long-term costs, calculated. It’s a very immediate "do this, what’s the return, what benefit do we get" immediately, without taking into account the longer-term issues, and that’s partly because our politicians aren’t in there for very long terms.

James W. Knight: Shirley.

Shirley Hoy: Actually, I just want to pick up where Frances left off. In my comment, in my remarks earlier saying that the debate that I think municipal councils need to have is, what is it’s basic role when they charge that property tax, whatever that amount is, if it’s that $4,700 per household, that what is the expectation by that citizen for that amount of tax they pay. What is the set of basic services? And I think Frances touched on that point, because, I’ll give you two examples in the City of Toronto’s debate. When we came together, as seven municipalities, we had for example, former City of Toronto that didn’t charge for parks and recreation programs, basically because of their philosophy that if you provide it, you basically develop communities and help the youth and all that, versus Etobicoke, that was very proud of the fact that they charge more than 80% in user fees for any of their parks and recreation programs. So as a council, when they came together, they had to debate that, you know, and still we never got to it. We never got to the central question of what is the purpose and the role of municipal-level government in parks and recreation service. Whereas we started using the whole debate on user fees from the affordability question – from the fact that the city couldn’t afford it – not the public good that parks and recreation programs should be doing. And fundamentally, when I look at the number of these programs, that’s where we get sidetracked. We’re so focused on the fact that we don’t have enough money, you zero in on user fees often as a band-aid. Second example is the homeless question. City of Toronto has a huge homelessness issue. When we get into a debate about the city making a contribution, you have councillors that say property-tax dollars should never ever be used to pay for any homeless programs, because it’s an income-tax, income redistribution program problem. And again, we don’t focus on the role of municipal government, and start talking about the funding issue, the inadequacy of property tax to fund homelessness. That’s where the problem lies.

James W. Knight: Anne.

Anne Golden: Well, again, just to build on it again, now with my new job, we do a lot of work on tax research and this and that, and the purpose of tax, you know, the impact and purpose of taxes. And the only thing that’s striking me, Margaret, is the complexity of it, that you have to balance. You’ve got theorists who talk about the efficiency of taxation and their interested in, you know, the impact of taxation from an economic theory point of view. You’ve got the practical side. Underneath are the values. You’re trying to balance impact on behaviour with public good, and I have to confess that I’ve mixed feelings about user fees, so the debate will always be one of balancing, you know, from a values perspective.

[?]: May I just add one comment. The biggest problem that I see with user fees is that they impact on the people that are least able to pay them, and they impact on our seniors, who are already very heavily impacted by, specifically, the real estate tax. The people who are actually still living in their homes are in many cases being forced out of them, and to add user fees on top of that just seems inequitable.

James W. Knight: Final comment from Enid?

Enid: Well, I’m not changing my mind, regardless of what everyone else has said. I’m not that easily swayed by any of the arguments, except to say that I don’t disagree necessarily. You know, when you think of the range of services a city provides, you can think of some that are along the, almost private-sector kind of goods, where, you know, you can charge for it. You see things like social services, of course you’re not going to charge a user fee. And then you’ve got everything in the middle. And so, there are some things that definitely, I think, user fees are appropriate for. Some of the things where they’re what we call spillovers or externalities, you might want a bit of a user fee, but not fully user user fee. There’s a huge externality when kids use a rec centre. And the externality as Frances said, if they’re not in the rec centres they’re going to be in the malls, da-da da-da. So you might not want to charge a user fee there. But to [blanketly ?] say no user fees, you know, I think the city is [at the start of ?] crisis, and we’re making some very bad decisions about how our cities are being laid out, and the services and the infrastructure, because we’re not pricing. And I got the last word, so there.

James W. Knight: Next question.

Q: My name is Betty Smith, and I’ve been a member of this organization for over 20 years on the board and executive committee, and I really love this dialogue and discussion that takes place. I tried a different format, but it didn’t work out as well as this one. I, since John has raised the issue of restructuring Canada, I’d like to put another idea into the hat that for me makes a lot of sense. When I think of Prince Edward Island has many of the same rights as Ontario has. And think of the difference, think of the costs across the country of maintaining 10 provincial structures and all that goes with that. I won’t include the Northwest Territories and the Yukon for a moment. But I’d like to put forward another suggestion, and that is we have the Atlantic Provinces, we have Quebec, we have Ontario, we have Manitoba and Saskatchewan together, I’m a little confused about whether we tie Alberta and BC, I have some problems with that, but that could be negotiated, and somehow or other try to tie the Northwest Territories and the Yukon with that. Now, to me that makes an awful lot of sense. I grew up in Winnipeg as a child, I went to university in Quebec for four years, I then spent a year in Cambridge, Massachusetts, and I then spent most of the rest of my life, well, the rest of my life, in Ontario, a long time in Toronto, but the last 12 years in Collingwood, Ontario. So I’ve been around different locations and talked with different people, and I’ve always been interested in political discussions. On many occasions, the whole idea of changing the country to regions, not provinces, has been on the agenda. I’d like to have a reaction from you people on that.

A: I like that idea. I think it’s great.

A: I like it if you bring Cambridge, Massachusetts, in as well.

Q: Ok, I’d do that, because it’s very close.

A: But I suspect again, you know, it’s the history, the tradition stays so long in those – I mean, how often have we talked about the Maritime provinces, it making sense that they come together. Similarly, if you look at Saskatchewan, the problem they have where the population continues to diminish year after year, I mean there is some sense in what you’re saying. But I, I think if there’s a way to do a two-tier approach that’s kind of at the national level, a regional level of government, but they still maintain some of their local, at the current provincial level, a jurisdiction with some things they can do? ‘Cause I have to tell you, looking at it from the cities and amalgamation issues we’ve gone through, one of the things we find is that some of the big issues for the new amalgamated city works well at the large, kind of one city level . . .

[TAPE 2 SIDE 2]

A: . . . I think you may still need another lower tier there.

Q: For the last 12 years professionally, I had a job with a Canada-wide mandate, and developed a Canada-wide program, and we acknowledged that diversity, and we were able to find a way to implement programs that made sense right across the country, and it was a heavily used program – it was for the Canadian trust industry. Now, I still believe, at least I get upset when we talk about how difficult it would be to do this, because if we can develop enough public support for something, I believe we can get it, and I this country has to get off its backside and begin to do things differently, because what happened in 1867 is no longer relevant in today’s economy. That’s a personal opinion.

James W. Knight: We have one more question to conclude.

A [panelist]: I’m just going to comment if I could on that statement. I agree with you, we have to start doing things differently. You’d have to ask the question, what are Canada’s priorities? What should our priorities be in terms of doing things differently? And from my perspective now, I wouldn’t put that at the top of the agenda. In other words, I do think, unless it would lead to some changes for cities. But I certainly think that among the, you know, if I look at the priorities for Canada for the next 10 years, our relationship with our neighbour, the United States, managing that relationship, the border issues, that’s the top priority. We have other priorities in terms of our role in the, abroad. We have other priorities in terms of attracting investment capital into the country. We have priorities around cities, we have priorities around innovation. Whether restructuring – although I do like the idea – restructuring on a regional basis – unless it tied into one of these strategies related to say North American trade, or some of these others, I’d have a hard time putting it as number one on the agenda. Your main point though about having to do things differently, though, I think we all agree.

Q: It seems to me that by simplifying the Canadian setup, we would make handling a lot of those other issues would be easier, too. I mean, I’m not saying do it tomorrow, I’m not saying that at all, but . . .

A: If it would, then that would be great.

Q: . . . but I think we need to begin thinking about that, I think we need to begin talking about that, and we need to begin selling the idea and prepare the country for it if we believe that it’s a worthwhile way of going. Let’s not wait for 10 years before we start talking about it.

Q: I just wanted to pick up from Canadians and priorities as well as a question that you raised about what the role of government is, and this is fundamentally what the question comes down to. I’m surprised that when we talk about sustainable cities, we move from sustainable being fiscal policy from here into the now [?]. My understanding of sustainability starts rather from looking at the social costs, the environmental costs, and then moving to an analysis of fiscal policy. I wonder then whether the problem in itself doesn’t stem from this way that we look at sustainable and what does it mean to be a sustainable city? And one example that I just wanted to give, and again, I only had a brief reading of this, but I read Mayor Mel Lastman’s opening address at the Toronto City Summit, which I think was also called the People City Summit, in which most of the speech was dedicated to productivity and enhancing productivity, but I think that there needs to be shift in the way that we look at these issues to use that rather as a ladder means [?], and looking at it in terms of the social and the environmental that I mentioned before. So, I don’t know if …

A: You’re quite right. You know, the concept of sustainability started with environmental sustainability, and people loved the concept so much they turned it into social, and fiscal, and all kinds of sustainability, so you’re quite right. But I’m not sure there’s an order, in the sense that social comes first, or environmental comes first. They’re very much related, and fiscal sustainability is very much related to environmental sustainability, because how we pay for things in our cities affects how our cities develop, affects how much environmentally sensitive areas are lost, how much farmland is lost, it’s all interrelated. So I agree with everything you said, except it isn’t sequential, it’s very much interrelated. This panel was really about money, so . . .

Q: Yeah I know, I understand, I understand that . . .

A: So if you want to speak on social sustainability, we can do that.

Q: But I think that the fact that that’s privileged, I do think that’s a problem, because I think the fact that we have a rationale for talking about user fees, etc., in economic terms, but when we come to these issues from an environmental perspective, or a social perspective, they become a little riskier, attaching an economic framework makes it a little less riskier, it also makes it manageable. Whereas I think there is a pecking order of the way we talk about these issues, and I see it reflected also in the type of discourse that happens, the speeches that get presented. So I don’t know if I agree that there isn’t a pecking order, I mean, to justify user fees you have to look at costs first, right, but as you mentioned there’s other costs, but this is the way we look at it, we look at it as costs, whereas I think that we really do need a reversal in where we put our priorities.

A: Well, it depends how you define costs. It’s not always dollars and cents. Costs are often environmental costs, some of which are measurable, some of which are not.

Q: But they’re still externalities, right? That’s, they’re still – I mean, ok, sorry.

A: The only thing I’m saying – you know, the only point I was trying to make is how the way we pay for things in cities affects the environment very much. That’s not "it" about the environment. I mean, I’m coming from a fiscal perspective, I’m the municipal finance person, and I’m saying to the people in my field, hey, wake up, because how you pay for these things affects the environment. I’m not an environmental person who would come at it from a different perspective. I mean, the important thing is that they’re interrelated, and we can have all these wonderful environmental policies and land-use policies, and then we can price new development in a way that destroys all our great ideals about the environment. So that’s only – I have a small message, you have a bigger message, and I’m just saying, don’t lose my message in the bigger one.

Anne Golden: Can I give you an example of when they’re absolutely intertwined. When people talked about Kyoto a year or so ago, in the context of growing awareness of global warming, everybody said yes, we have to be part of this. Then why is it breaking down in Ottawa? It’s breaking down because there is a distrust and a disbelief in the cost projections, and there is a fear that by signing on to Kyoto, it will disadvantage producers in the energy field or another field and make us uncompetitive relative to others, for instance, if the United States doesn’t sign it, and so there is a fear that by signing on, ultimately, we will suffer economic consequences that will be so detrimental that it, you know, it will outweigh what the goals are of Kyoto. So the chances for Kyoto, which I think from a symbolic and from a substantive point of view, if the analyses done so far are correct, we would all want to see Canada embrace that, but Carolyn, you could say more about that, but isn’t the debate in caucus about whether or not the cost, what are the numbers, there are other numbers now that are appearing, and I can tell you from the people that we, you know we do a lot of work on energy networks, and my corporate stakeholders, some of them, and certainly in provinces like Alberta, don’t believe the economic numbers being put forward as to what the costs are. So, we have to – in order to convince and to embrace the goals of Kyoto, which are the broad environmental goals, say, as an example – the numbers have to be credible and defensible. That’s where the two come together.

Q: Sure. Ok. If I can just add one more thing. Not as part of retorting [?] what you’re saying, but as part of the problem that I see in making the message that I am giving right now. When we are talking about for example NEPAD, however you want to pronounce it, when we begin to use this language we can say then that it’s good to give aid to Africa because it’s an economic opportunity, because this presents an economic opportunity for us. And my discussion stems from this type of, when we’re talking about the role of government in human dignity and human nobility and all these types of concepts, they get measured in economic terms. And my call is for a discourse or an understanding that moves beyond that, because I think that that diminishes what these issues are about, and it diminishes what really sustainability embraces. And that’s I guess what I was trying to elaborate.

James W. Knight: Barbara?

Barbara Hall: Sorry to jump in here, but I think, it was very interesting to me when I began to understand that this takes us back to globalization. And I have spoken on this myself, about how the language has shifted. We’ve seen a shift in the language to defend – so now, even when I was at United Way and I wanted to make a case, I spoke, I went from using needs to investment, because, when, it was, that was marketing, I was positioning the ultimate goal in the minds of people that I was trying to attract money. So I think what you’re talking about is that there has been a shift in the rhetoric around the marketing of these, you know, more idealistic goals, the public good, and the debate is one around shifting values and how you position relative to the values. And that’s what you’re sensitive to.

Q: Yeah, but also when you discussed innovation, you mentioned education focusing on science and math, and I think that that’s part of the problem as well, I mean, we’re talking about civic responsibility, and I mean, I would defend the liberal arts here because again, this is not the time or the place for that, but I think that another speaker, I think actually it was Barbara Hall, was talking about the education system as part of this understanding of cities and globalization, and so I think it’s interesting how these things are interconnected, but I really do see the privileging of one over the other. And I’ll stop now.

James W. Knight: I hate to note that we’re overtime, but we are overtime, and in fact there is a schedule here. There are ample opportunities for continued discussion at Couchiching, however. I mentioned outdoor sessions tomorrow, but there’ll be social activities this evening, so those of you who want to continue the discussion I’m sure will.

I want to thank our panelists who did a great job, truly a wonderful line-up of great intellect, and to thank you for your patience. I am informed that the presentations constituted the longest single block of time at a Couchiching conference consumed by speakers, so for that I accept responsibility, but you’ve been a wonderful audience and have borne with us, so thank you.

[END OF RECORDING]