“How Toronto Lost Its Groove” by John Lorinc | The Walrus | November 2011

During the decades of postwar growth, Metro spent heavily on infrastructure, justifying its borrowing costs as the price of progress. But in the 1980s and 1990s, as development took off north and west of Toronto, the municipalities of Vaughan and Markham enthusiastically pursued beggar-thy-neighbour tax policies that enticed businesses to avoid or flee Metro and its higher commercial and industrial taxes. The result: a slow but painful decline in Metro’s non-residential tax revenues; growing tracts of fallow land; and fewer jobs in the inner suburbs, such as Scarborough and East York.

But the most punishing blow — the big bang, from a municipal revenue perspective — came in 1997, when the Harris government, having rammed amalgamation through, decided to relieve municipalities of the burden of funding education in exchange for “downloading” the costs of transit, public housing, and parts of welfare. Harris said the exercise would be “revenue neutral,” and for suburban municipalities with less transit and fewer social services, it was. But in Toronto, with its aging subway system and tens of thousands of crumbling public housing units, downloading proved disastrous. The Toronto Transit Commission took a particularly hard hit. The province had subsidized transit operations and capital needs since the 1960s. Now, when much of the system’s infrastructure was beginning to show its age, the provincial government was absolving itself of any financial responsibility. With almost half a billion riders per year, the TTC was North America’s most cost-effective transit system. But without adequate provincial funding, the city had no choice but to cut service and stop planning for expansion.

(via tumblngtoronto)