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How Toronto Might Improve Its Economic Prospects During This Downturn
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...And How It's Being Frustrated From Pursuing A Turnaround Welcome to my website.
I'm Mark State, and you've logged into
THE STATE OF OUR TORONTO.
The following describes a potential innovative economic turn-around package designed to help unemployed Torontonians get back to work, and entrepreneurial Torontonians to provide that work. Its approach is innovative, and although similar programs are in action in some parts of the world, and they have been recommended by Ontario's Economic Development research, nothing like the following ideas has been employed here yet. I believe it is incumbent upon a future leader of this city to examine its economic situation and, where questions are found about current difficulties, propose solutions for them. Others, reading this or coming from a background where such things are noticed, may point out that we need to get Torontonians "back to work", but will have no idea, innovative or otherwise, about how to get that done. This piece not only proposes one possible solution, but relates it directly to the economic well-being of the city, so that both the city and its citizens can get back on their feet economically.
Proposing these kinds of solutions shows the vision and leadership that should be provided by Toronto's Mayor. Running away from difficulty by reacting to problems with a cut, slash, and burn policy rather than facing it with positive solutions is an established procedure and a direct result of a Mayor having learned governing city procedures while serving in civic government because civic government is a mainly reactionary body; not, in general, a proactive one.
Some pundits and many former members of city council believe that a Mayor should be someone who has served in city council before being elected as Mayor because that would prove dedication and provide the experience of sitting on council.
These people apparently mean well; but in actuality, their thinking is halting and limited, and extends to limiting the governing success of the city as well. Successful major corporations continually prove that kind of thinking to be incorrect.
When hugely successful private corporations are in need of new leadership, they extend their search outside of their own personnel to fill the vacancy with someone deemed capable of providing the necessary leadership, not the current traditional line of thinking. This is not only because the best people are not necessarily already aboard the corporation, but also because new vision dedicated to furthering its success helps it move ahead unhampered by stale or counter-productive thinking. "We can't solve problems by using the same king of thinking we used when we created them." --Albert Einstein
And the notion of having served on city council proving more dedication than not having previously served is disrespectful to those who prior to serving step forward to run. They volunteer to spend a part of their lives in public service by running for office because they think they can make a difference to the successful management of this city. The idea that Dedication to city leadership is only proved by having already served in council is logical nonsense. "...the price of success: dedication, hard work, and an unremitting devotion to the things you want to see happen.” -- Frank Lloyd Wright, architect.
WHY TORONTO IS STUCK
On the matter of setting Toronto back on course, two basic flaws in economic approach make the current civic government’s ability to come up with a plan to alleviate the threatening economic downturn’s effect on the city impossible.
First, our civic leadership seems to believe –if one takes as evidence their continual approach to senior government for additional funding—that the province and/or federal governments should freely provide a steady source of additional financial help over and above their established budgetary transfer payment allotments for cities when the cities have too few fiscal resources either to balance their budgets or get enough infrastructure maintenance done to keep the city on a healthy course.
Seeking support from senior government to make up for an inability to identify and manage a viable budget is a less-than-optimal manner in which to govern one of the largest and most important cities in North America. Inability to manage the city’s budget within its income sources is the result of either fiscal irresponsibility or poor planning. An example of the former is the 2009-2010 budget item of over a billion dollars the city didn’t yet have for new (not Eco-friendly) streetcars; and of the latter, the TTC’s tunnel visioned ambition to rid the city streets of automobile traffic flow in a manner oblivious to the automobile’s evolution and importance in the life of the city and the entire country.
And second, city council’s current priorities lack the foresight and leadership necessary to provide Toronto with a cogent direction towards its rightful future because it concerns itself solely with issues and plans that occur only within a forecast of a very few years; in other words, in the present.
It is inevitable that short term planning requires a constant feeding of additional money from outside sources as limited-vision decision-making direction ignores longer term consequences and priorities. City government is aware of this shortcoming in its fiscal policy due to its obviously unproductive outcomes, but not of why it is occurring.
In 2008, asking for a set of out-sourced thoughts and ideas with economic measures to “fix” this problem, David Miller established a committee of experts and entrepreneurs called ‘Toronto Mayor’s Economic Competitiveness Advisory Committee | January 2008’. Their conclusion reads like pointless rhetoric, exhorting as it does the city to continue doing more of the same to overcome its economic woes [emboldened words to emphasize the point]:
“We need to do a better job of promoting, integrating and aligning our competitive advantages into a unified whole. Renewed public and private investment is essential to fuel growth in Toronto’s economy, improve the health and vitality of our community, and position Toronto as a leading global city. Toronto has choices to make that will define its place in a globalized world. Economic competitiveness must be enhanced through internationalization, creativity, and inclusion, supported by a business climate that fosters private and public reinvestment. Investment in the future fiscal health of this city is mandatory. By taking action now, through renewed private and public sector investment, Toronto will be bold, energetic, connected and collaborative in the 21st century.” The next 18 pages of recommendations are a list of building on more-of-the-same infrastructure and outreach programs like suggestions for increasing tourism, with regard paid only to the city’s immediate future (i.e., augmenting its present situation).
Assembling a special group of advisers is an admirable admission that governing in city council's current fiscally irresponsible manner can benefit from outside help, whether the search for advice is, as above, initiated by the civic government inviting successful business people to participate in a committee about it; or more currently by the observing media noticing that outside help is needed--as exemplified by an appeal to the general public for solutions to Toronto’s economic woes made in April 2009 by the Metro newspaper's senior editor. I wrote the following with the latter appeal in mind.
"The difficulty with asking a group of people whose vested interests, one way or another, lie with the expansion of the city is that --surprise!--their conclusions will address more expansion as a means of sustaining a growing Toronto. This means more investment in the style of infrastructure and development growth we now enjoy; but doesn't address a path or direction with which Toronto can envision where it wants to go. Hence an unsupportable purchase of hundreds of new streetcars...retaining an outmoded form of public transit; and the closure of lanes in the center of rush-hour routes to allow them passage without regard to the importance of automobile traffic to the city's transportation needs, while an entire list of citizen-centered infrastructure goes unexamined or even unthought-of, crucial environmental issues remain unaddressed, Toronto's economic woes are enhanced by more and greater spending, and the nature of the city's future falls into the category of "more-of-the-same" for the next forty years.
Not only is the advice given thus far by the ‘special advisory group’ severely limited by basing its conclusions in the ‘now’, but also the City of Toronto's current 'Official Plan' addresses no thought for alternative futures, and is therefore directionless: an inadequate and rickety base on which to mount useful budgetary expenditure decisions.
You may have noticed that when the city goes to senior government for additional project funding, it is always for the same old things; and the city is not growing or developing to its potential as a direct result of the fact that it has not laid out that potential. This year's city budget is a dreadful and dreary example of a lack of forethought necessary to lead the city somewhere, anywhere, presenting an object lesson in how cities suffer without philosophical leadership.
Toronto's push to growth for growth's sake is not useful growth; and, while profitable for our developers, leaves the city suffocating in repetitive, unattractive and Eco-unfriendly concrete. Expanded infrastructure for infrastructure's sake is not always useful infrastructure. Increased anything in the city for its own sake, without regard to its impact on the city's future, is no more useful than our city government's more-of-the-same strategy to budgeting.
Belonging to the class of actions entitled “begging”, our civic government’s applications for additional funding from senior government invariably meet with difficulties, delays, deficiencies, or re-direction of the funds. They are a constant source of frustration and initiate an aggravating spiral of repeated futility.
While city council might adopt suggestions raised in this article and elsewhere, be assured that no member of that august group has the vision or creativity to independently conceive or carry out economic solutions to the city’s woes. Very few of them even have the ability to evolve into a different approach to city’s government because they are locked into a belief that there is no other way of governing a city than the current dis-enabling model.
They all work very hard for us, basically trying to reduce the city’s governance to issues that can be passed or tabled or committeed; but a genuine solution, moving Toronto into the future in both the planning and economic sense, must include replacing the philosophy of Toronto’s governing style, and quite possibly its current complement of councilors as well.
WHAT TO DO
One remedy to a situation in which a municipality continually finds itself in arrears, under-budget and unable to manage with available funds is to identify independent revenue generation solutions as an alternative to the 'hat in hand' mendicant method of approach to senior government for additional funding over and above standard revenue streams.
The city already receives certain reliable amounts from taxation, transfer of funds, licensing and fees. After that, we are expected to cover our expenses. If we cannot do so, then we ought to be able to generate additional funding without having to approach senior government for it.
It is not impossible to turn Toronto around economically by putting people back to work using the city as a formal cause in that effort. The idea is not new, and it has been applied before with great success. The Ontario Government has made some small steps in that direction as well:
ecdevjournal.com link
Here's one of a group of potential economic turnaround packages:
There are few jobs available in today's ravaged economy, and many, many applicants. In addition to the currently unemployed, there are also homeless people who according to the previous homeless census in Toronto (±5000 out of ±5800) stated unequivocally that they would rather be working and off the street.
When jobs are not available, people must become entrepreneurial in order to live. Our latest entrepreneurial class is panhandlers, who can make on average $100,000.00-plus tax free** per annum during economically prosperous times. Unfortunately for most of them, they are unable to keep the money because they are subject to costly addictions, robbery, coercion and extortion rackets by panhandler hierarchy. While they will hedge about the terminology, they have a strong work ethic.
[**For the incredulous, I invite you to do the math: Panhandlers work 8 or more hours a day doing mundane repetitive tasks and subjecting themselves to violence and abuse in the process, but earn an average of $20 to $60 an hour depending upon their location, panhandling style and time of day.
Example: the stoplight panhandler. Looking extremely poor & morose, and walking up & down lines of stopped traffic with a cup outstretched and a sign asking for help, how much does he earn?
Traffic lights change every 30 seconds. One looney on average for every 3 lights is $40.00 per hour.
Except that every hour there are at least two people who hand over a five dollar bill, making it $50.00 per hour. That’s $400.00 per day, $2,000 per week, $104,000 per year.
Do they work a full day all year long? I don't know. For $400 a day, would you? Maybe they go south for the winter and panhandle there.
Street ‘accosting’ panhandlers can make more than twice as much as stop light panhandlers if they are skillful with their approach. Make up your own math].
What do panhandlers actually do to earn their living? They shed their human dignity. That’s hard work. Try it some time. The unemployed's work ethic and entrepreneurial spirit is not limited to panhandlers. There is a huge resource of people in the city willing and able to apply themselves in some entrepreneurial effort -- if only they could have an opportunity to do so.
Every entrepreneur in business has the potential to hire others to work for him/her, so assisting one person to become an entrepreneur creates opportunities to put many others to work. There are also literally thousands of people out of work whose total conception of employment centers around the concept of ‘job’, where somebody else takes the entrepreneurial chances and job seekers accept a salary to work for them.
To an entrepreneur, these job seekers are untold wealth. The more people they can put to work making money for them, the more they will earn; and the job seeker only wants a small portion of what he earns on behalf of the entrepreneur as a reward for his knowledgeable labour. The person holding a job is happy because he or she is earning a salary, has benefits and an option for retirement earnings. Everybody wins.
People who are working earn money. Money buys housing, food, and gives an opportunity to practice charity on a grander basis than giving somebody in greater need than you, your last quarter.
The city needs more money than it can get through its transfer-of funds allotment, raising taxes, charging parking fines, licensing and permitting. Traditionally, it applies for this extra money from the province or the federal government. The issues associated with requesting money from senior government (not unlike panhandling, but without its proven efficiency) are wide-ranging, but may be summarized as 'overall not satisfactory' for a host of reasons, some of which are listed above.
One unorthodox solution to this quandary could very likely be for the city to become entrepreneurial as well.
The city might start off its entrepreneurial career with the establishment of a Trust Company or Caisse -- whichever is the best route for a city that also wishes to float its own low-interest, borrower-centered mortgages and charge cards; and offer an automatic discount for the cardholder if it is used within the city limits-- in every neighbourhood offer full banking services, offer ATM's that are differentiated by giving out small change to any bank card holder with a very minor surcharge based entirely upon their home-banks' or location-providers' charges, and group-supported micro-loans.
[A CAISSE is a type of credit union where every depositor is a shareholder in the company. It is very depositor-friendly, and as a payday loan arranger can manage credit based upon pay cheques used as collateral without cashing them at additional expense to the depositor, while offering money management counselling to the depositors that would enable them to get off the payday loan habit. A City Of Toronto Caisse would be composed of any Torontonian wishing to deposit in it. Management of a Caisse is conducted by the depositors who elect managers and approve the Caisse's financial direction at shareholder meetings. A TRUST COMPANY is a privately-owned savings, mortgage, and lending company, with rules that are more relaxed than those governing federally incorporated major Banks about how their money and business is managed. The advantage of a Trust Company is that it can emulate the generosity of a Caisse, but that its investors and owners must purchase all its shares. This would allow a Toronto wholly-owned trust company to direct all its profits to the city.]
Part of the business of the projected Trust Company or Caisse would be the business of strong qualification, low-interest loans and micro loaning.
Ignore
Suppose the city were to offer potential entrepreneurs (identified from groups of small business people wanting to expand, the less-than-successful ones struggling to make a go of their enterprises, the Self-Employment Benefit "SEDI" grads, and persons with a realistic business vision) start-up money for premises and equipment, expert managerial advice, accounting and legal help in maintaining those businesses, etc., ‘grub staking’ in return for becoming a full partner in the businesses and taking 50% after-tax profits as a full partner share. Funding might come partially from the city's Trust Company or Caisse banks, and a strong financial institution eventually built through a careful enterprise over the first few years into a place from which Torontonians could expect financial services oriented to them.
The entrepreneurs would be assisted to eventually purchase back the city's initial investment at its original cost with the partnership profit-sharing period considered as its sole means of gaining by the transaction. Much of the new entrepreneurial energy might be devoted to service industries focused on improving the lot of the city, thus saving the city in infrastructure and maintenance cash outlays.
Expert managerial assistance for new start-ups might come in part from the existing professional community, and also from business and accounting professionals who may themselves have been out of work when such a program started, and who can work in an entrepreneurial consultative capacity, financially aided initially by their own silent partner: the city, in much the same way as their clients.
A bootstrap program of this nature will eventually enrich the city so that not only will its citizens be able to afford their homes, but there will be enough additional income over the property tax base (currently 36% of budget funding) and regular 'senior government'-paid programs (about 28%) to assist the city to begin to thrive financially on its own and begin the expensive task of repairing the damage caused by past civic governments, and the more bizarre programs of the most recent ones, to a strong future.
Meanwhile, implementing a good future planning paradigm in the city council decision-making process will cast clarity upon areas of continued foolish budget expenditures, hodgepodge infrastructure enhancement, and unfocused development by evaluating the city's growth with the future as guidance.
This is just one of many innovative plans in a diverse group of current difficulties that could be implemented to manage various problems facing the city.
The unfortunate fact is that some resolutions are moved ever more distant by the mess our current misguided civic government makes larger each day due to its mistaken conviction that more infrastructure and more development is equivalent to a healthy city, and led by politicians whose defensive reaction to public complaints of inaction in a host of important areas is to pile on huge and expensive, but poorly thought out projects .
The fallacies are obvious to the informed observer . Not repairing our rivers, lakes and streams ignores the future of fresh water availability to the city. More of the existing styles of public transportation (adding 400 GO trains/day, building LRT Right-Of-Ways up the center of city rush-hour street routes) are not better, more efficient, or state of the art solutions to moving commuter populations. Not developing a regulatory facility to incorporate inverted uploading into the hydro system ignores potential electricity contribution from the community. Continually having to approach senior government to divert funds intended originally for other municipalities to cover our own inadequate income is a no-win situation for all involved. Placing seniors in drab hospital-like retirement institutions is ungrateful and behind-the-times. More garbage landfills are not better or more efficient ways of managing the city's waste disposal. So-called environmental plans that when more closely examined are not ecologically friendly (nickle shopping bags, CFL light bulbs, 1.6 litre flush toilets, etc.) just shows a bandwagon approach to environmental issue solutions. Looking at excellent advances in other international cityscapes and not paying attention to, or missing out somehow, the various manners in how they encourage 'less' rather than 'more' is indicative of addiction to a false idea of the components of progress being found in added infrastructure. Development without a cogent idea of where it's all going, just to be able to say, "we must be doing right, because we are doing more!", is irresponsible and wasteful.
Mark State
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