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TORONTO – Toronto’s budget planning has been a yearly drama ever since amalgamation, with a structural deficit created by provincial downloading, a shortfall in provincial funding for provincially-mandated services, and the city’s own decision to freeze taxes for three years following amalgamation.

That’s the reality laid out in a new paper by economist Hugh Mackenzie, commissioned by the Toronto Civic Employees Union (TCEU) Local 416, CUPE.

Mackenzie takes on the “explanations” of and “solutions” for Toronto’s budget crunch coming from city critics like the Toronto Board of Trade.

A review of the facts behind Toronto’s 2010 budget shows that these claims are not only misleading, they actually distract attention from the real issues behind Toronto’s budget problems,” Mackenzie says in Reality check: Toronto’s budget crunch in perspective. “Toronto’s spending is not ‘out of control’; in fact, it has increased at a slightly slower rate than other Ontario municipalities. Its problems are the result of political decisions made at the provincial and local levels in the late 1990s.”

Experience shows that so-called solutions such as contracting-out and selling off assets will shortchange the city and its residents over the long term by actually increasing costs and taking away reliable sources of revenue.

The city should ignore provincial restrictions on what it can include in tax bill mailing in order to show residents how much of their property tax increase is the result of provincial funding shortfalls for mandated services and how much of their taxes actually pay for provincial programs, the paper says.

Ultimately, “the services Toronto requires to function as Canada’s biggest and most diverse city aren’t free and unless the tooth fairy turns up looking for work, that means individual Torontonians and the businesses that thrive here will have to pay higher taxes.”

TCEU Local 416 President Mark Ferguson said the union will be presenting its recommendations on some of the city’s problems and possible efficiencies during public budget hearings in early March.