My Response to the Federation of Canadian Municipalities

The Edmonton Journal informed me that they have a strict editorial policy about printing responses to responses, which is a fair rule, so I'm posting my response to the FCM president's letter to the editor about my article about infrastructure spending here.

Here it is:

“Gridlock belongs on federal list,” May 6, 2011

I’m glad that the President of the Canadian Federation of Municipalities took my proposal to decentralize infrastructure spending seriously enough to respond. I’m also encouraged by the fact that he did not disagree in principle with the idea. However, I have two issues with his response.

First, he minimized the problem. His claim that half of infrastructure spending comes from municipalities is correct. But the debate over infrastructure spending has always been focused on capital spending, the majority of which comes from senior levels of government. In Alberta, it’s funded entirely by the province. As long as municipalities rely on higher levels of government, they’ll be forced to balance the needs of the city against political needs of senior governments. There’s no better example than Toronto’s Sheppard Subway line—a line from nowhere, to nowhere, and through nowhere. The province financed the tiny stub known as the Sheppard line by canceling the far more practical Eglinton line. Bad planning often makes good politics. Had the decision been left up to Toronto voters alone, this wouldn’t have happened.

Second, he said that if higher levels of government propose to give municipalities taxing power, the municipalities would be happy to sit down with them. The deferential tone is the problem. Unless municipalities are willing to forcefully make the case to the public that decentralization is essential, higher levels of government won’t bother with it. Federal and provincial politicians love controlling the purse strings. Having the ability to funnel money to politically important areas works out well for them. The FCM is a powerful lobby group, so there is no reason why they should hedge their bets by backing band aid solutions. The ball is in the FCMs court.

Should Toronto Sell the TTC?

Eleven years ago, a British company bid $500 million to buy the TTC, and promised a 10 year fare freeze. The TTC currently loses $350 million annually. Energy Probe Research Foundation executive director Lawrence Solomon makes the case that the TTC millstone could still be turned into an asset for the city.

Read the full story here.

Toronto Election Highlights Failure of Amalgamation

Originally featured at New Geography.

In my pre-election piece on the Toronto election, I discussed the city’s lingering malaise. It developed slowly but its roots can be traced to the 1998 amalgamation that swallowed up five suburban municipalities. This led to a six folds expansion of city boundaries and a tripling the population base. This amalgamation was initiated by the province of Ontario as a cost saving measure and faced major local opposition. Citizens and politicians were concerned that the benefits of the alleged efficiency saving would be outweighed by the negative impact of losing local decision making powers. The recent Toronto municipal election bore out this concern.

In the October 25th election, Torontonians were presented with two dramatically different visions. The first vision was presented by former Liberal Ontario cabinet minister George Smitherman. A self-described progressive, Smitherman appealed mainly to voters in the downtown core of Old Toronto. He stood for issues such as improved bicycle lanes, renewal of the downtown waterfront, and improving social housing conditions. The second version was presented by maverick councilor Rob Ford, who represented a ward in the former City of Etobicoke. Ford’s message was simple: it’s time to stop the “gravy train” at City Hall. While he had elaborate platforms on many issues, cutting waste at City Hall was his ubiquitous message.

(continue reading)

Amalgamation, and Election Year Anger in Toronto

My latest New Geography article. Toronto election year anger is a side effect of amalgamation, rather than a knee jerk reaction against big government.

Despite Toronto’s international reputation for livability, all is not well in the city. Many politicians and pundits blame the outgoing city council, and Mayor David Miller. While they’ve done their share of damage, the city faces deeper, systemic problems. The source of the problem is more fundamental than stifling bureaucracy, or the stranglehold of the public sector unions. These are symptoms of the institutional sclerosis caused by the amalgamation of Toronto and surrounding areas into the new Toronto Megacity...(continue reading)

My Latest Post at New Geography: Revisiting Toronto’s G20 Costs

Originally posted at New Geography, and picked up by the National Post.

In the lead up to the G20 conference, the security costs were projected to approach a billion dollars. As high as this number sounds, sources are now speculating that the total bill could be closer to $2 billion. Shocking as that number is, the costs incurred by local businesses may have exceeded that total.

In addition to the physical damage to the hundreds of shops that were smashed in, there were major productivity losses during, and in the week before the conference. The most visible opportunity cost was the sharp decline in retail sales...(continue reading)

Toronto G20 Conference: A View From The Wreckage

Here are my observations from this year's G20 conference in Toronto. I have inserted as little political commentary as possible, opting instead to share my personal experience.



June 25th, 2010



10:51 PM

I arrive in Toronto to a surprisingly vacant parking lot on the Esplanade, in the heart of Toronto's bustling financial district.










10:56 PM

Quietest Friday night I've ever seen in Toronto. Barely a soul out in the usually packed financial district.










2:12 AM

On the way back to my lodgings, I pass by the French delegation's bus. The hotel workers had been on strike for the previous few days. The hotel company is owned by a French company, so they decided to go on strike while the French delegation was there as a bargaining tactic. The picketers left hours before my arrival.






2:14 AM

The Esplanade is conspicuously devoid of returning bar goers.












June 26th, 2010



10:39 AM

I arrived a few minutes after a scheduled keynote speaker at Allen Gardens that I heard about on Twitter. The tent town built by protesters has already been broken up, and its occupants dispersed.








10:40 AM

The speaker went on anyways, with a small crowd. I was told there would be a 1:00 PM rally at the Provincial Legislature, Queen's Park.










10:56 AM

In the meantime, I headed to Bay Street, the heart of Canada's financial district. I figured if there were pre-rally disruptions, they would be here.









11:04 AM

All's quiet at Queen's Park. I decided to walk down to the security barrier surrounding the Metro Toronto Convention Centre, where the summit was being held.









11:11 AM

The Art Gallery of Ontario was one of the many high profile venues that closed for the conference. Mirvish cancelled all of their shows, including the high profile Rock of Ages musical. The Blue Jays were also forced to move 3 home games to Philadelphia.







11:18 AM

University Avenue. One of Toronto's busiest streets. Empty.











11:29 AM

Arrival at the Security barrier. A few officers hanging around, but surprisingly quiet.











11:30 AM

The police decided to use tightly meshed chain link fences to make climbing the barriers extremely difficult. I used a Canadian bill for scale, which may be slightly deceptive to Americans (since our bills are slightly shorter, and wider). It still appeared to be somewhat climbable, but I didn't dare test my theory.






11:36 AM

I caught the subway at Osgoode station to head back to Queen's Park. It was quieter than it usually is at 1 AM on a Sunday.










11:55 AM

A scene from the University of Toronto, which was also closed for the conference.











12:06 PM

The people in orange hats are the legal representation for the protesters. They're prepping for a long day.










12:10 PM

Queen's Park begins to fill up with all of the usual suspects. Union activists, environmentalists, and anti-war protesters seemed to be the bulk of the crowd.









12:30 PM

Things seemed quiet, so we decided to go for lunch. When I saw Greepeace approaching, I knew it wouldn't be quiet much longer...










12:34 PM

...and then I saw people in their midst who appeared to be Black Bloc anarchists. They are notorious for their role in the Seattle WTO protests of 1999, where they caused major property destruction. Given that they show up to protests specifically to attack corporate buildings, I had to stay close by.






12:43 PM

Things got pretty busy at Queen's Park. Despite the rain, an estimate put the crowd at 5000.











12:48 PM

A crowd protesting the Ethiopian genocide filled the streets of Queen's Park. I told my photographer not to worry about them. They had nothing to gain from being violent. Spoiler: I was right.








1:00 PM

The Queen's Park subway station. Moments after this photo, I was told that this stop, among others was closed. First sign that the police were prepared to funnel the crowd down University Avenue, to avoid anyone getting to Bay Street. Given the number of anti-bank banners, this was probably wise.






1:14 AM

A frustrated streetcar driver looks on as protesters and police shut down University Avenue. Combined with the subway closure, passengers has little option but to wait for the march to end. I have no idea when this streetcar was actually up and running again.







1:41 PM

The demonstrators have now officially shut down University Avenue. Frustrated motorists driving south on University are stuck for minutes on end, trying to plow through the crowd.









1:56 PM

The crowd continues south on University. They are flanked on either side by police. I instructed my photographer to stay as far north as the police. The last thing I wanted was to get caught with police and protesters on either side. I wanted to maintain an exit strategy.







2:26 PM

After a long march south, the protesters are all funnelled to the east side of the street. This bolstered my theory that the police were trying to contain the protests between Queen's Park and the barrier. A classic pincer formation.








2:37 PM

My first sighting of riot police.












2:45 PM

I was proven wrong. Rather than contain the crowds (which would lead to immediate confrontation), the police formed a human funnel to shunt the protesters west on Queen Street. They were betting that dispersing protesters towards bohemian West Queen West would give them fewer targets. Given that they decided to use dispersment, rather than containment as their strategy, this was not unreasonable.




2:47 PM

The view from Queen West. Seems remarkably quiet. Few protesters left in sight.











2:55 PM

A little bit of hipster irony. This was going to be my caption photo had there been no destruction. Clever stunt, I must say.

I chatted with some riot police to see if anything had happened. No reports of violence. I decided that nothing was going to happen just yet. I began heading east to meet a friend at a pub. As I reached University, I noticed the police were once again blockading. I was talking to bicycle police, and pointed out that that the riot police one street south were putting on gas masks. They looked back, looked west down Queen, and noticed that the protesters were marching back East. There appeared to be police officers fighting with protesters, so the police told us to head north immediately, or we would be collateral damage. He wasn't being threatening; just acknowledging a reality.

At this point, we left. As we walked north, we bumped into someone who had come from further west on Queen West. He informed us that rioters were breaking every window in sight. We then turned east to try to get far enough away from the protests to head back south to where we were staying. The protests seemed to follow us in lockstep each time we went South. It turns out that many of the protesters who were funelled west simply headed south, and turned back east to avoid the police. Hence the riot police with gas masks a block south.


3:48 PM

We eventually ended up walking south on Church. As we crossed King Street, we saw a cloud of smoke. It appeared too dark to be tear gas.









3:48 PM

It turns out the smoke was coming from a burning car in the middle of the road. We later found out it was a police car set on fire by protesters with Molotov cocktails (one of at least 3). We decided it was time to get out of downtown.

I met my friend at the pub (C'est What?), and told him there was a car on fire down the street, and protesters were rapidly moving our way, leaving behind a swath of destruction. We headed a block north of Yonge and College to another bar.

After ordering a drink at Bar Volo, the owner walked up to our table, and told us to move away from the window. There were people breaking windows of shops just south on Yonge, and he didn't want his customers to get hurt. We hopped in a cab, and fled to north.

We spent the next few hours at Rebel House. Ironically, this was the launching point for one of Canada's biggest political clashes, the Upper Canada Rebellion. The irony was unintentional.


11:46 PM

We returned downtown around 11pm to have a quick drink at Duggan's, a local microbrewery. Upon leaving, downtown was once again eerily quiet. Some business owners had the foresight to board up in anticipation of the riots.








11:52 PM

We were greated by hundreds of riot police outside of our lodgings. We litterally had to be escorted accross the street. There didn't appear to be anything amiss.









12:42 AM

From the roof, we were able to discover what the police were up to: resting.















12:45 AM

More riot police arrived. They appeared to be regrouping in prepartion for more protests. The next day, we found out that hundreds of people were arrested just outside. There also appears to have been a journalist abused and detained in this flurry of arrests. I suspect we'll hear much more about this.







June 27th, 2010



1:56 PM

I decided to drive around the Queen West/Bay Street areas to survey the damage. This Bank of Montreal was one of many banks that was attacked.









2:09 PM

After being questioned by police, we resumed photographing. Given that I was driving around taking photos, this was unsurprising.

The CIBC accross the street from Bank of Montreal was another of the Banks smashed in. It surprised me how quick the vandalized establishments were boarded up. No remaining shattered glass visible from the road.




2:11 PM

The Gap was one of the predictable targets for protesters. There were dozens of less prominent shops that were also vandalized.










2:12 PM

Starbucks. The absolute favorite target of anti-corporate vandals.











2:13 PM

The vandals also targetted the CTV news building, as well as several media vehicles. Their commitment to free speech seemed questionable by this point.









2:13 PM

A window at police headquarters broken during the riots.











2:14 PM

Yet another CIBC location with broken windows.












2:15 PM

I continued along Queen Street, passing by the Four Seasons Centre, home of the Canadian Opera Company. My favorite building in the city. As I crossed the intersection, I heard a loud rumble. Yet another protest march coming down Queen Street, following a police car. I quickly pulled a U-turn, and headed north on University. I kept going, and exited the city.






There are plenty of lessons that one might learn from this experience. This was my second G20, after last year's meeting in Pittsburgh. This was far more chaotic, possibly even worse than the Seattle riots in '99. The lesson that I want to impart is simple: major political meetings should never be held in large cities. They are a magnet for violent protesters, and endanger local residents. The destruction, and the billion dollar security tab will hopefully make politicians think twice about foisting these events upon major cities. Like I said before the meeting, it should have stayed in Huntsville, a small tourist town outside of the city where it was initially supposed to take place. This is my personal opinion. You decide.

My Article on The G-20 Summit at Newgeography.com

Check out my article on the costs of the upcoming G-20 Conference in New Geography, the premier online journal of urban issues.

Toronto's G-20 Conference: Financial Boon or Boondoggle?

Ever since the ill fated 1999 WTO meeting in Seattle, there has been some debate over the merits of hosting meetings of international organizations in major cities. While some argue that there are economic spin offs from the tourism generated by these conferences, others argue that the security costs far outweigh the benefits. In the lead up to the G-20 meeting in Toronto, there has been a flurry of controversy over the price tag for conference security. The combined security tab for the G-8 and G-20 could end up as high as $900 million dollars. Unfortunately, there has been little discussion about whether the economic spin offs could justify this cost. It seems unlikely, but it would be unfair to jump to any conclusions without looking at the facts.

The tourism industry does have the potential to reap some gains from the G20. The best case scenario for the industry would see 50,000 rooms booked for the conference. Unsurprisingly, Greater Toronto Hotel Association Terry Mundell is excited. "It's a good news story for us," he claims. If we assume (optimistically) that each room goes for $300/night, the hotel industry could make $30 million out of the deal. On top of this, people will obviously be spending money while they're in town. Let's assume that these 50 thousand people consume 4 meals/day at $100/person. This would be a cool $40 million for the restaurant industry. Maybe these folks will have a few drinks. Let's budget in $100/night. After all, these are affluent folks. That's $10 million for the bars. Maybe a few souvenirs to bring back for the kids? Let's say another $10 million. And what if they need some Tylenol? Toothbrushes? Toss in another $10 million. We're up to about $100 million in direct economic benefits. But wait, people need to get to Toronto, and to get around the city. We'll be generous and throw in $100 million for airfare. Add to that $100/day in cabs, and we have another $10 million. This brings the grand total to $210 million. Far from negligible. Unfortunately, that's about double the official estimate of $100 million. Like I said, this is a best case scenario.




On the cost side of the ledger, it is important to note that the costs will be divided between the G-8 Conference in Huntsville, and the G-20 in Toronto. Let be extremely generous and assume it is an even split. Of the $833 million already announced, we'll say $400 million is going to the Toronto conference. This still leaves us with a shortfall of $190 million. Remember, this is an extremely optimistic scenario.

Here's the bad news: even under the optimistic scenario, we still haven't factored in opportunity costs. So far it has been confirmed that three Blue Jays games will be moved to Philadelphia, and the University of Toronto will shut down during the conference. In anticipation of former Jays star pitcher Roy Halliday's first return to Toronto, the team had budgeted for 90,000 fans to attend. At an average revenue of $39/fan, that's a loss of $3.5 million dollars. It's hard to say how many fans would have come into the city from out of town, but it wouldn't be at all unrealistic to say that the city is going to lose at very least another $3.5 million in spin offs.

Even without any similar cancellations, Seattle business managed to lose at least $10 million in revenue as a result of the WTO meeting in 1999 (not to mention the $2 million in property damage). Furthermore, if the G-20 wasn't going to be in Toronto, we don't know how many hotel rooms would have been rented out for other events, or whether the conference goers will crowd out other patrons from restaurants. This is the difficulty with these types of estimates. They take into account the benefits that we see, but not the unseen opportunity costs. It's hard to count a family that decided not to go on vacation, or someone who didn't bother going to the restaurant because it's too busy.

One might argue that the short term costs will be mitigated by long term benefits. After all, some people might like the city so much that they'll want to visit again. Perhaps some number of people will even want to move to the city. I had a similar experience during the G-20 in Pittsburgh last year (though haven't followed through). If we look at it this way, any shortfall could be seen as a tourism advertising expense. Will this pay off in the long run. Unfortunately it is impossible to tell.

So let's assume that the shortfall for the conference is $200 million dollars. That seems pretty reasonable at this point. Let's further assume that there will be a non-trivial long term tourism benefit to the city. In fact, let's assume they make it all back. I still don't buy into the idea of holding major international political conferences in major cities.




My biggest objection is the inconvenience to citizens of the city, which will likely include many people being caught up in violent protests, and police retaliation. No one should have to get tear gassed in the name of boosting tourism. I was there in Pittsburgh when stores were being smashed in, and the police were gassing protesters. Given that I was wise enough to stay away from the protests, I didn't personally witness the chaos. Having said that, there is plenty of footage showing the violent clashes between protesters and police. After Seattle, London, Pittsburgh, and many other cities where these conferences have ended violently, politicians should have learned their lesson. Forget tourism dollars. These conferences are about solving major economic problems. The G-8 meeting is being held in tiny Huntsville, where the G-20 originally was supposed to be held. That's how it should be. It's easier to import police to a small town than to evacuate the downtown of a major city. Hopefully it doesn't take another Seattle to impart this lesson to governments. It probably will.

The Eglington LRT Dillema: Expropriations, or Major Cost Overruns (Or Both)

The Ambitious Transit City Plan that Metrolinx has designed for the GTA is now getting beyond big picture planning, and into the actual nuts and bolts. To this point, there have been few real costs estimates for the project. Perhaps worse is that no one seemed to alert the public to the possibility of eminent domain use in order to expropriate inconveniently placed homes and businesses. At a recent community meeting, York South Weston Councillor Frances Nunziata revealed that 100 properties would be directly affected by the Eglington light rail line. In order to avoid expropriation, some residents are calling on the government to build the relevant sections of the line underground. Before rushing into a project of this magnitude, someone should have a look at the numbers. Here are some quick facts:

The proposed line is 33 kilometers long (just over 20 miles). The cheapest light rail line built in the last decade cost $31.1 million USD/mile ($33 million Canadian). This was a short rail line along an interstate in Charlotte, North Carolina. Obviously, construction costs will be much higher in Toronto, even if it is entirely above ground. A more likely comparison is the Pittsburgh North Shore extension, a portion of which is underground. That project came in at $243.7 million US ($260 Canadian) per mile. That would bring the cost of the Eglington line to $5.33 billion Canadian Dollars. I should stress that these numbers are taken directly from a pro-light rail organization's website, so it is unlikely that the numbers are exaggerated. The project is projected to cost $4.6 billion dollars. If they increase the proportion of the line that runs underground, my $5.3 billion dollar estimate could look conservative. This also fails to take into account the fact that the average North American light rail line has run 35.8% over budget.





To reiterate: the city plans to spend at least $4.6 billion dollars to replace the current bus routes on Eglington. That is enough to purchase 10,000 of the most expensive transit buses ever constructed (hybrid, of course). This will have little effect on congestion. The Congressional Budget Office estimated that in Portland, the poster child for light rail, the massive investments in light rail only took 1300 cars off of the road during rush hour. That amounts to $225 USD per car every day. At that cost, it would actually be more cost efficient for the provincial government to pay corporations to incentivize telecommuting. $5.3 billion dollars could convince a lot of people not to drive through rush hour traffic. I'm not suggesting the government actually spend this money, but at least it would actually reduce congestion.

One more thing I neglected to mention: the Eglington line only accounts for 33 of the 125 kilometers of rail the city plans to build. Don't be surprised if the total budget for the initiative approaches $20 billion.

Toronto Congestion Costs $3.3 Billion Annually: OECD

A recent report by the OECD found that congestion in Toronto costs $3.3 billion dollars in lost productivity every year. This problem is not unique to Toronto. The Texas Transportation Institute found that congestion costs each American commuter $750 in lost productivity and wasted fuel per year, and added nearly the equivalent of a full week of sitting in traffic every year. While the OECD recommends increased public transit funding as one part of the solution, they are also recommending the two main policy measures that free market economists tend to encourage for reducing congestion: tolling, and congestion pricing.

Toll roads are obviously familiar to Torontonians, as the city is home to one of the most successful toll roads on earth. The sale of Highway 407 generated $3.1 billion dollars for the Ontario government, and has saved taxpayers over $2 billion dollars in operating costs since 1999. Moreover, the private sectors has shelled out over $1 billion in lane extensions, lane expansions, and interchanges.

While the 407 is widely regarded as a financial success, it is easy to overlook the positive impact it has had both on reducing commute times, and on reducing carbon emissions. An independant study in York region found that using the 407 saves the average commuter 33 minutes for a 42 kilometer commute. Furthermore, the average 407 commuter emits 5 tons of c02 per year, compared with 9 tons for the average Highway 7 commuter.

Toronto has not yet attempted congestion pricing on city streets, though there are plenty of jurisdictions that the city can learn from. The most famous example is in London, where congestion pricing was introduced to downtown in February of 2003. Congestion has since decreased by 30%, and c02 emissions have decreased by 20%.

Tolling and congestion pricing are issues that could create consensus between fiscal conservatives, conservationists, and commuters. Surprisingly, and to his credit, David Miller seems to support toll roads, though Metrolinx (the regional transit agency) appears to be standing in the way of any potential expansion of toll roads. If an openly socialist mayor is willing to support toll roads, there is no reason why fiscal conservatives should demand anything less from whomever they support in the 2010 municipal election.