By Jim Silver - Rabble.Ca, October 5, 2016
Although Carlo Fanelli's book Megacity Malaise: Neoliberalism, Public Services and Labour in Toronto is not about Winnipeg, it offers many insights applicable to Winnipeg and to other Canadian cities. Fanelli is a former Toronto civic employee who looks at civic issues from the point of view of city employees and their unions. His central argument is that the fiscal problems confronting Toronto and all major Canadian cities are not caused by over-spending on civic services nor by excessive union wage demands, although this is what is typically claimed.
The basis of Canadian cities' fiscal problems is in Canada's Constitution, which does not give cities the taxing powers to generate sufficient revenue to do all of the things for which they have responsibility. Cities are forced to over-rely on property taxes, which "is unsustainable in the long run." Property taxes are regressive, and don't grow with the economy, leaving cities in a constant state of fiscal crisis. This is made worse by the fact that federal commitments to civic issues have been sporadic and insufficient to meet cities' needs.
This has been worsened further by the ideological dominance in Canada of neoliberalism. This ideology has driven massive cuts in taxation and in public spending -- by 1999 Ontario's Mike Harris government, for example, had made 99 different tax cuts; by 2013 Stephen Harper's government had cut federal taxes to the lowest rate in 70 years -- followed by the downloading of responsibilities from senior to lower level governments. Cities have borne the brunt of this offloading, and have not had the capacity to generate the revenues needed to deal with it.
Toronto and Winnipeg have responded with a host of policy measures that do not get at the real root of the problem. Like Winnipeg, Toronto has allowed suburban sprawl to grow, on the grounds that more suburban housing will mean more property tax revenue. But this doesn't get at the underlying structural problems, and in fact generates more costs in the longer run. Selling off valuable public assets to the private sector creates profits for private interests, but produces a one-time only injection of cash that is no solution to the underlying problem and that diminishes future revenue flows. The same is the case with privatization and contracting out and the use of public-private partnerships (PPPs).
There is a great deal of evidence that PPPs, to take that example, do not generate the savings that cities claim. Ontario's auditor-general produced a major report on 74 PPPs completed between 2003 and 2014 and found that these cost Ontario some $8 billion more than traditional public financing. Contractors benefit, cities' budgets do not, yet Toronto and Winnipeg continue to make use of PPPs on the largely false grounds that they save public money. The contracting out of city work continues unabated, and any "savings" it produces are typically the result of non-union contractors exploiting vulnerable workers. This is the case with the privatization of Winnipeg's garbage collection service in 2012. The hard work of lifting garbage cans and dumping them into trucks is done by temporary day labourers -- many of them young Aboriginal men -- hired on a day-by-day basis at minimum wage with no benefits. Described in an expose by Aboriginal Peoples Television Network as "Winnipeg's dirty little garbage secret," this exploitative process is how Winnipeg "saves" money via privatization and contracting out
Spending on valuable public services continues to be cut on the largely false grounds that cities have a "spending problem," while the already massive infrastructure deficit balloons ever further. Roads, bridges, underground pipelines and transit services continue to deteriorate, while parks and recreation facilities, libraries and other essential civic services remain underfunded. The urban fiscal crisis grows unabated.
City governments, desperate for solutions and driven by their ideological orientation, point the finger at out-of-control spending and excessive wage demands by civic unions. Many in the right-wing media promote this simplistic and largely false explanation.
Fanelli points to data showing that incomes have stagnated over the past three decades of neoliberal governance. "In Canada's three largest cities the bottom 90 per cent of income-earners made less in 2013 than they did in 1983." Toronto's 2007 Independent Fiscal Review Panel found that the average wage of City of Toronto workers, including overtime, was "less than $40,000 in 2007." Toronto's unionized workers and their unions are not the cause of the city's fiscal problems.
Yet one of the great "successes" of neoliberalism and its adherents has been to redirect the anger of many modest-income earners at civic employees and their unions. Civic employees are seen as being paid too generously, despite their relatively modest earnings. As Fanelli points out, "the vitriol directed at them is intense, often as if they live lavish lives at the expense of non-unionized workers."