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So now what?

December 14, 2006 @ 20:05 By: gordon Category: Current affairs, General

Today, Ottawa City Council voted 13:11 to scrap both the original and modified light rail transit plans. Instead, Ottawa can look forward to claims by the consortium that was going to build the new O-Train of between $250 million and $300 million. And that’s on top of $65 million that was spent developing the plan. (For the record, I had absolutely no problems with the money spent on developing the plan when it was going to come to fruition.)

Great.

So, Ottawa remains the only city of the five largest cities in Canada that doesn’t have some form of rail transit. To meet the short-term transit demands, more buses are going to have to be pressed into service on roads that are already at, near or even over capacity. More buses means more road congestion which means more vehicles idling, resulting in more greenhouse gas emissions. More vehicles on the road means more wear-and-tear on the roads, so expect more cracks and potholes.

And you cannot convince me that this wasn’t very orchestrated quite some time in advance by our mayor and his cronies. This outcome is great because Larry can blame two other levels of government for the failure of the LRT plan, which he opposed in the first place, even though the whole situation was brought on when he asked his friend, John Baird, to usurp the prerogative of the then City Council and put every thing on hold under after he was elected mayor. When the plan was modified a couple of weeks ago, he did a 180 degree turn and supported the modified plan by breaking a tied vote. Subsequently, both the Province of Ontario and the federal government expressed concerns about the modified plan and indicated they wouldn’t be able to assess the modifications by a critical deadline in the contract. The Province of Ontario sent a letter today confirming that the funding would be provided if the original plan were approved and presumably the federal government would honour its committment similarly.

Instead, we’re looking at possibly more than a quarter of a billion dollars in claims. That combined with Larry’s pledge of 0% increases means that Ottawa’s probably going to be a fairly unpleasant place to live for the next few years. You can already see hints of things to come in the 2007 Budget Directions Report on the agenda of today’s Council meeting:

1. That Council approve the development of a Draft Operating Budget for 2007 for all tax-supported services (excluding Ottawa Police Services), that includes:

a. The cost of maintaining current programs at current service levels;
b. The cost of providing provincially mandated and cost-shared programs;
c. The costs associated with growth in population or infrastructure that is operated and maintained by the City;
d. The costs of enhanced services as directed by Council through reports and directions received throughout the year;
e. An increase equivalent to 1% of taxation for the contribution to capital used to fund the strategic initiatives category of capital;
f. An increase to user fees at either the percentage increase in the cost of providing the program or service, or as directed through Council-approved policy;
g. A reasonable estimate of assessment growth from new properties added to the tax base;
h. Deferring a 2007 increase to the corporate efficiency target to 2008; and
i. No increase in taxation.

2. That the difference between the expenditures and revenues added to the 2007 Draft Operating Budget identified in Recommendation 1, be eliminated through the use of the following strategies:

a. Deferral of service enhancements that have not yet been implemented;
b. Use provincial gas tax revenues to the extent possible to offset increases in the cost of transit;
c. Use debt where possible, instead of contributions to capital, to fund the capital program;
d. Incorporate and pursue the cost-sharing shortfall with the provincial government;
e. Identify and incorporate any other one-time sources of funding;
f. Increase user fees and charges by more than that identified in Direction 1f; and
g. Identify program reductions.

I’ve highlighted a couple of items that caught my eye and confirmed my fears about having Larry O’Brien as mayor. Basically, it seems like we can expect reductions in services and disproportionate increases to user fees. And, we’re going to take on (more) debt.

Thanks a lot, Larry.

6 Responses to “So now what?”


  1. Squid says:

    I fail to see how it is bad that people who use services bear the cost of those services.

    The city definitely has to identify why things are suddenly so expensive. Odds are, this is some kind of forward shaft from the last city council/mayor. In any case, it’s not magic – people either pay (by taxes or debt) or stuff gets cut.

    I’m a huge fan of 2f and 2g. Ottawa has lived high on the hog for a long time. Perhaps it’s finally time to live like the rest of the country.

  2. gordon says:

    It’s not the user fee itself I have a problem with. It’s increasing a user fee by more than the actual increase in the cost of providing the program that I object to. If the cost to increase a service has increased by 3%, then the user fee should increase by 3%. 2f could have that user fee increase by 10%, for example. Why should a subset of the population pay that extra 7%, which wasn’t due to an increase in providing the service, instead of spreading it across all the taxpayers since it’s due to an overall increase in costs?

    And if we want to live like the rest of the country, or at least the major cities, we should be investing in our transportation infrastructure in a manner that doesn’t consist solely of putting more buses on the already congested roads.

  3. Squid says:

    If the cost to increase a service has increased by 3%, then the user fee should increase by 3%. 2f could have that user fee increase by 10%, for example. Why should a subset of the population pay that extra 7%, which wasnít due to an increase in providing the service, instead of spreading it across all the taxpayers since itís due to an overall increase in costs?

    There are two reasons:

    1. Users should pay that extra 7% because the rest of the taxpayers aren’t using that service; and

    2. Whatever the service is, it’s probably already subsidized by the taxpayers, so even at the higher rate, you’re still probably getting a significant break.

    It’s like when students whine about tuition increases, particularly increases above inflation… Since students only pay ~25-30% of the actual cost of their university education anyway, their whining rings hollow.

    And if we want to live like the rest of the country, or at least the major cities, we should be investing in our transportation infrastructure in a manner that doesnít consist solely of putting more buses on the already congested roads.

    I agree, but a good investment doesn’t start with a train to Barrhaven that will do NOTHING to relieve the bulk of the congestion from the east and west where most people live/work. Does Barrhaven need transit? Absolutely! Should Barrhaven transit be a priority? Absolutely not. A lot of people CAN’T take transit to work because the commute is 2+ hours in each direction (I know this from experience working in Kanata). The fact that a Barrhaven link might be cheap because of existing infrastructure doesn’t alter the fact that building such a link doesn’t actually improve the transportation situation nor the congestion situation for the vast majority of the city in any substantial way. If Barrhaven fell off the world right now and flew into the sun, there’d still be bumper to bumper traffic on the 417 from Stittsvill to Bank street, and from Jeanne D’Arc to Mann Ave every morning, and a quarter million po’d commuters.

  4. gordon says:

    Users should pay that extra 7% because the rest of the taxpayers arenít using that service
    What I meant is that the extra 7% is being charged, not to recover an increase in the costs of providing the service because that’s been covered by the 3% increase, but to help offset a deficit in the general operating budget. If there’s a shortage in the general operating budget, as opposed to the budget for a specific service, shouldn’t that shortage be covered by all taxpayers rather than a select few?

    No transit plan will make everyone happy and I’ll concede that the transit plan that was proposed wasn’t the best plan, but at least it was a step in the right direction. And there’s a whole lot of land south of the airport with zoning amendment signs that is going to be filled in with houses that would have been served by it. Now that traffic’s going to have to be funneled on to Limebank, Riverside and Albion. Since Albion doesn’t allow through-traffic at Lester, it’ll be diverted on to the Airport Parkway, which is already busy enough. The city owns rail lines that run east-west, so they don’t need to reserve the land they way they do for a north-south link.

  5. Squid says:

    What I meant is that the extra 7% is being charged, not to recover an increase in the costs of providing the service because thatís been covered by the 3% increase, but to help offset a deficit in the general operating budget. If thereís a shortage in the general operating budget, as opposed to the budget for a specific service, shouldnít that shortage be covered by all taxpayers rather than a select few?

    What I meant was:

    Your program costs (2006) the city $100k to operate and you pay a $10 user fee.

    Your program costs (2007) the city $103k to operate… and the city is zillions over budget all across the board – in essence, out of money.

    Now the city has to make a choice:

    1. Cut your program completely, causing you to have to acquire the service at retail rates, at whatever cost, or do without.

    2. Realize that there’s only $90k in the budget for that program and raise the user fee to $11 to make up the difference.

    3. Keep the budget at $103k, raise the user fee to $10.30, and bone the entire city for the $13k shortfall.

    Now, personally, I think there is a lot of room for option 1. But there’s plenty of room for Option 2. Option 3 should be the option of last resort, and only for those programs that have a very wide appeal in the city. Sure, if you’re a user of the program, you want option 3… but is that fair to the rest of the city that doesn’t use it? And with a mayor committed to no tax increases, and the reality of “you can’t stop every program”, option 2 is going to get a big workout.

    Which would you rather have? Higher taxes paying for things you don’t use, or lower taxes that are more effectively spent, with your money going directly toward those services you use?

    Personally, I’d rather have the latter – although I do recognize there are plenty of people who would rather have the former.

  6. gordon says:

    If the program is used by relatively few people and is expensive to operate, then it probably should be reviewed, no argument there. If it’s a program that’s got a small shortfall in its budget, then option 2 is fine. If it’s a service that’s deemed to be for the “common good”, then option 3 is appropriate because that’s part of the societal responsibilities of a city.

    But, if the program is covering its costs with the user fees, then raising the fees to collect more than is required to cover the annual increase in operating costs is wrong.

    I’d rather have the latter, but balanced against the fact that there are indirect benefits to me as a citizen of Ottawa in the programs that I don’t use. Though I’m not a huge public transit user, for example, I gain an indirect benefit from a good transit system because it attracts new businesses to the city, can increase tourism revenues and also has environmental benefits such as reduced pollution.