Cities May Look Left to Protect Their Future as Centers of Innovations and Development

It was called “re-imagining our cities,” but the summit was just as much about re-imagining Canada’s social democrats — the New Democratic Party, now positioning itself as a national government in waiting.

At one of its first public events since electing Tom Mulcair federal leader, an invitation-only conference hosted by the federal NDP and York University City Institute in Toronto on April 13 was about how to make money in the city.

These are not your grandmother’s tax-and-spend New Democrats.

An elegant conference room of NDippers in suits, jackets and ties, sipping coffee from real mugs, nibbling on wraps served on real plates, is a sure sign that the church basement and Styrofoam era of social democracy is passing. The baton is being handed to those seeking to fill a new political space as tomorrow’s wealth and job creators.

The theme of the day was “a comprehensive strategy for the urban economies of southern Ontario.” As this rolls out across the country, the NDP will be positioned as champions and technocrats of an innovative urban manufacturing and knowledge economy, as against Conservative cronies of foreign-based resource exporters.  As put by conference co-organizers Roger Keil and Mathew Kellway in an op-ed article appearing in the Toronto Star on the morning of summit,  cuts to social programs in the recent Conservative budget make “the projections of the vanished middle class of our city all the more certain.”

This indicates a fundamental change in the North American political landscape.

The federal Conservatives, who lean heavily on resource exports that require little in the way of social infrastructure or vibrant cities, have provided this once-in-a-lifetime opportunity. Champions of equity and sustainability can now also present themselves as champions of robust economic development and crusaders on behalf of both working people and the middle classes.

The new Dipper version of this possibility needs a lot of work on substance.
It wouldn’t have hurt to have at least one word said about food, the scene of actually-existing job-creating innovation across the spectrum of farming, processing, retailing and eating. One might even invite someone among the green innovators in the city’s fashion and construction industry to share the limelight with academic devotees of bio-medical research and information technology.

Perhaps a representative of Toronto’s booming non-profit, co-op and NGO movements – employers of many of the creatives flocking to cities –  could have been invited to say a word about social innovation.

But I won’t get ahead of myself or them. Political innovation is long-overdue.

But I don’t want to get ahead of myself. The new Dippers are making a pilgrimage from “Liberals in a hurry” – long-ago Liberal Prime Minister Mackenzie King’s taunt at NDP predecessors who settled for humanizing capitalism with welfare programs, rather than fighting for socialism – to liberals who are planning to hurry.  I don’t want to underestimate political innovation, the missing element amidst the social and environmental ferment of recent decades.

Like the government technocrats who fashioned the Global North’s prosperous industrial economy of the 1940s and ‘50s, today’s New Dems believe a powerful public sector is indispensable to a thriving knowledge economy. They make the case that starving the public sector, especially in cities, is cutting off the economy’s nose to spite the deficit’s face. Smart public programs are only disposable in a budget designed by those who favor becoming hewers of wood, oil, ore and water.
Listen to the conference keynoters.

University of Toronto political economist David Wolfe opens the day by showing how the auto-based economy that brought prosperity to southern Ontario after the 1960s was “the child of government policy,” with substantial  subsidies to every new plant built after 1980.
Smart public institutions and policy are as crucial for tomorrow’s economic powerhouses. Both Hamilton and Kitchener-Waterloo pin their hopes on what university research programs and stakeholders can do to bolster local medical, software and high-tech manufacturing operations.
But Toronto, the country’s much-maligned economic engine, must succeed on another level — as a global city, vying against New York, London and Tokyo, with underfunded programs that are, as Wolfe says,  “very disconnected and uncoordinated.” Far from being transformative as promised, he argues, the Harper government’s latest budget showers about a billion dollars in spending over four years on research and innovation, matched by about a billion in cuts to actual operations of research and innovation organizations.

Economist Armine Yalnizyan of the Canadian Centre for Policy Alternatives follows with an advisory that southern Ontario’s success depends on attracting the best and brightest immigrants who stimulate demand for  new homes, furnishings, transit tickets and food.
Toronto, like other magnet cities, competes as destination for some 200 million footloose professionals and entrepreneurs leaving the Global South each year. They pick a favorite city to migrate to based on the best opportunities for creative employment, but also the best offerings for affordable, high-quality healthcare, education, recreation and housing.

This sea change in global migration patterns means that Canadian cities now need to up their game socially  to become  “the magnetic North,” she says. Among today’s newcomers to Canada are a 70 per cent majority –  432,000 on temporary visa and 278,000 on student visa – who may not stay here if there’s no prospect of decent jobs, housing or education for their kids.

Any old resource or manufacturing job doesn’t cut it anymore.  “You will need to be a people magnet to avoid becoming an economic backwater,” she says.  “If we cannot address this desire for basic functionality, people will go elsewhere.”

Mario Lefbvre, economist with the business-led Conference Board of Canada, issues the same warning. “Globalization is not a vague concept anymore,’’ he said. Since immigrants come to cities as much as to countries, he says, it is “more than time we gave cities all they need to reach their economic potential rather than leaving them flat broke.”

Because Canadian cities aren’t allowed to go into debt like other levels of government, they can only manage the pressing and non-postponable costs of complex cities  (English as a second language training for newcomers in Toronto, for example) by postponing infrastructure repair and improvement. As  unrepaired and unimproved infrastructure builds its own momentum, it reaches crisis proportions. The case in point is transportation, which saddles Toronto with an estimated $5 billion a year in time lost to congestion and a defining elemt in the political and social mood of the entire city.

No solution to the healthy economic, social or ecological functioning of cities is possible without new ways of funding them. The old way of funding cities with property taxes saddles them with a highly-transparent and rage-causing source of revenues that doesn’t evolve in keeping with shifts in population or economic well-being.

The tax-cutting Harper Conservatives missed “a golden opportunity” to solve the revenue problem of cities when they cut the GST, the former national sales tax,  by two points, he argues. They could have kept the tax, but donated one point to provinces and one to cities, Lefebvre said, enough to finance necessary infrastructure improvements.

Funding city services on property taxes is dysfunctional and illogical, he argues.

When a city-sponsored festival attracts visitors, for example, newly-employed festival workers pay income tax to the feds and visitors spend money that contributes to the province’s retail taxes. But the city gets to pay for extra policing and so on without making one dime in revenues, he noted. A cost-minded city government would have refused to host a festival and everyone would have lost out – indicative of the lose-lose spiral governments are following in today’s rush to austerity of government programming.

Having a leading economist (Super Mario is his nickname, an energy level that Lefebvre certainly lives up to) associated with a business networking and thinktank organization serve as closing panelist of the day’s one keynote session is an interesting way for a new day for social democracy to present itself.

Life keeps giving us opportunities, just like eggs left by the Easter bunny, and sometimes in places we’re least likely to look for them.

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