Complete Communities

A new test to tell those who are sustainable from those stuck in the past.

The city Matt Blackett created using Facebook's "My City" application is "a place where citizens dare to dream of a sustainable city."

Although many trees have been sacrificed documenting earnest discussions about sustainability, there is still a disturbing sense of unreality about these debates. The language typically used to describe the challenge of achieving sustainability is often evangelical in tone and lacking rigour. As a result of emerging issues in Ontario’s Greater Golden Horseshoe (GGH), however, this discourse may be replaced by a new reality test: if it isn’t economic, it isn’t sustainable.

The provincial Growth Plan for the GGH adopted by the Government of Ontario in 2006 is now well into the implementation phase. But as municipalities get on with the hard work of updating and adjusting their official plans to meet intensification targets, some potentially intractable fiscal realities are emerging. Among them, the twin fiscal challenges of accommodating new growth while at the same time addressing pressing needs to renew and replace aging infrastructure that supports existing development.

The Growth Plan calls for the creation of “complete communities,” a term that acknowledges a desire to provide residents with options for where and how they choose to work, live and play. This means that municipalities must be able to fund long-term investments in both necessary infrastructure (such as storm and sanitary sewers, water, roads and transit) and community infrastructure (such as schools, hospitals, libraries, police stations and community centres).

Even if regional and municipal officials are able to design plans consistent with the vision expressed in the Growth Plan, not even the best growth management strategies can overcome the fundamental fiscal challenges facing both regional and local municipalities in the Greater Toronto Area and Hamilton (GTAH), a subset of the GGH.

To address these challenges, the Regional Municipality of Halton and the Canadian Urban Institute (CUI) recently organized a financial summit for the benefit of politicians from all orders of government in the GTAH to address four principal issues:

1. The financing model that worked for Metro Toronto in the ’50s and ’60s and when regional municipalities were created in the ’70s is no longer viable. Most municipalities in the region have accumulated infrastructure deficits, a problem exacerbated by the need to upgrade or replace facilities to meet stringent new environmental and safety standards informed by current policy goals. There are legal and practical borrowing limits that constrain a municipality’s ability to undertake multi-year projects, and the scope and scale of re-investment plus the costs to accommodate new growth has moved well beyond the capacity of upper-tier municipalities to cope with these costs.
2. The current model for financing growth with development charges (DCs) is based on principles established to meet rapid growth in the ’70s. This model was innovative and effective for decades, but circumstances have changed. The scope of development charges has been narrowed to exclude provision of soft services like community centres and libraries. Because DCs pay only for the costs of new growth, the expenses of maintaining service over the long-term fall on the municipality-an increasingly challenging requirement, given the regressive nature of the property tax regime.
3. A related problem is that, looking ahead, the Growth Plan calls for development of communities of the future-compact, transit-friendly and pedestrian-oriented. The costs established in DC bylaws are based on the past. The amounts collectible through DCs are based on the financial track record of the preceding ten years. If municipalities hope to move their development practices into the 21st century, then DCs need to be based on tomorrow’s urban form, not yesterday’s.
4. Municipal treasurers are facing a cash flow challenge: when they add up the continuous costs of infrastructure replacement-including the borrowing limitations); the extra expense of having to completely rebuild or even replace infrastructure to meet modern standards; and the construction of facilities needed to support new residents and workers-it’s clear that DCs are neither a full nor perfect solution. Partnerships will need to be brokered. Principles will need to be revisited.

In laying out the fiscal challenges ahead, the session took pains to acknowledge significant commitments already made by the provincial and federal governements. Through the recently passed Invest in Ontario Act, the province has committed up to $2 billion out of 2008’s budgetary surplus to service capital debt and municipal infrastructure projects. The Municipal Infrastructure Investment Initiative (MIII) will allocate $450 million in 2007-2008 to municipalities that applied for project-specific funding. In the longer term, the province’s MoveOntario 2020 plan has identified that $17.5 billion in provincial funding will be needed for public transit investments over the next 12 years. It’s also expected that a forthcoming report called “Provincial Municipal Fiscal and Service Delivery Review” will shed light on how many of the fiscal challenges facing municipalities might be addressed.

For its part, the federal government is attempting to overcome decades of inconsistent commitments to renewing infrastructure through its flagship plan: Building Canada . While the plan draws its funding from the gas tax fund and the GST rebate, the scope of its mandate is broad, covering the requirements of smaller rural communities as well the needs of urban centres with funding for projects like the Spadina Subway extension. To ensure continued access to gas tax funds, municipalities must undertake initiatives consistent with preparation of an integrated community sustainability plan.

What’s Next?

Given the common interests in protecting and enhancing the prosperity of the region, a new collaborative model for addressing these complex fiscal needs is required. The province is committed to finding solutions, but what about other players? What role should the federal government take to expand its current investments in the social, environmental and economic threads that are intertwined through the regional economy? Is there a role for the private sector in this partnership?

Addressing the challenges of building “complete communities” requires a commitment to fiscal reform and innovation as far-reaching as the commitment to developing in a completely new way to implement the Growth Plan’s vision. One thing is for sure: municipal practitioners will soon begin to have more respect for that simple word “sustainability.”

Think you have the answers to these questions? Please comment below.

Glenn Miller, FCIP, RPP, is director, education and research, with CUI in Toronto and is a regular contributor to ReNew Canada. Michelle Drylie is a graduate of the University of Toronto masters program in planning who worked on the Halton Summit project. Find summit details at canurb.com.

This article appears in our July-August 2008 Issue