Response to Bill 56, the "Greater Toronto Services Board Act"

The Strategic Policies and Priorities Committee recommends the adoption of the report (September 16, 1998) from the Chief Administrative Officer:

Purpose:

To outline a Toronto City Council response to Bill 56, the "Greater Toronto Services Board Act."

Funding Sources, Financial Implications and Impact Statement:

There are no immediate financial implications.

Recommendations:

It is recommended that:

(1)the provincial government be requested to make the following amendments to Bill 56:

(a)provide a definition of the term "strategy" in section 1 (1);

(b)amend section 22 to provide that:

(i)the Board be required to adopt strategies for municipalities within the GTA with respect to the provision and optimal use of infrastructure;

(ii)infrastructure strategies that the Board adopts respect the provisions of official plans as amended from time to time;

(iii)infrastructure planning undertaken by the Province has regard to the strategies of the Board;

(iv)the actions of the Board, its operators and agents be consistent with the Board's strategies; and

(v)municipalities be required to certify to the Board consistency of proposed new municipal infrastructure with Board strategies as part of the demonstration of need in the Environmental Assessment process;

(2)Council inform the Minister of Municipal Affairs and Housing that the City of Toronto opposes the method of levy apportionment based on weighted assessment, as set out in clause 28 (2) of Bill 56, and request the provincial government to work with City staff to identify alternative approaches to levy apportionment by the GTSB;

(3)Council request the provincial government to amend Bill 56 by removing the GTSB's power to directly access financial markets;

(4)Council request the provincial government to amend section 41 of Bill 56 in order to increase the City of Toronto's representation on GT Transit to 50 per cent;

(5)this report be forwarded to the Minister of Municipal Affairs and Housing, all Regional and Area Municipal Councils in the GTA, the Council of the Regional Municipality of Hamilton-Wentworth and Mr. Alan Tonks, the GTSB Moderator, as the City of Toronto's response to Bill 56; and

(6)The appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Background:

On June 25, 1998 the Ontario Legislature approved First Reading of Bill 56, the "Greater Toronto Services Board Act." The legislation, if enacted, will provide for the creation of a Greater Toronto Services Board and a Greater Toronto Transit Authority (GT Transit), effective January 1, 1999.

The introduction of Bill 56 follows the review by Mr. Alan Tonks, GTSB Moderator, of draft legislation that the provincial government circulated to municipalities throughout the GTA in March 1998. Council adopted its response to the draft Bill on April 16, 1998 (Clause No. 14 of SPPC Report No. 4). Some, but not all, of Council's recommendations, are reflected in Bill 56.

It is anticipated that the Bill will come before the Legislature for Second Reading during the Fall Session and then be sent to a Committee of the Legislature for review and public input.

Comments:

The Act establishes the Greater Toronto Services Board whose objects are to promote and facilitate co-ordinated decision-making among the municipalities in the Greater Toronto Area and to exercise general direction and control over GT Transit. The primary object of GT Transit, which the Act also establishes, is to operate the regional transit system (GO rail and bus services) serving the GTA and the Regional Municipality of Hamilton-Wentworth. The highlights of Bill 56 are outlined in Appendix 1.

Establishment of a GTSB:

The GTA Task Force, Burnham Review Panel, Who Does What Panel, Milt Farrow Final Report and the Final Report of the Toronto Transition Team all concluded that there is the need for an institution to deal in a unified and co-ordinated way with the problems facing the GTA. Legislation to create the GTSB is a step in the right direction.

Infrastructure Co-ordination:

The GTSB will present a major opportunity to address region-wide infrastructure planning and provision in a co-ordinated manner.

A GTSB role in transportation infrastructure co-ordination will benefit the GTA because, in the past several years, the provincial Ministry of Transportation has decreased its own role in the co-ordination of transportation. This is especially pertinent now given the exit of the Ministry from municipal road infrastructure financing.

The GTSB has the potential to take a lead role in long-term GTA-wide transportation planning and the creation of a GTA transportation master plan. In addition, the GTSB could take a lead role in the co-ordination of new transportation infrastructure that is proposed to cross municipal boundaries. Examples of future projects could include the Morningside-Markham link, the rapid transit link to the airport and future extensions of subway/rapid transit services to the north and west. The GTSB could also help co-ordinate the introduction of Transportation Demand Management measures across the GTA and could provide the lead role in the identification and advocacy for alternative sources of transportation revenue.

The formation of a Commissioners GTA Round Table Forum on Solid Waste Management as well as a forum of GTA Public Works Committee Chairs in 1998 signals recognition of the need to co-ordinate responses to solid waste management, water supply and wastewater treatment issues across the region. The GTSB will be able to play a valuable role in assisting and formalizing these efforts at infrastructure integration among GTA members.

The role for the GTSB in promoting co-ordination and developing advisory strategies for municipalities in the GTA with respect to social assistance and social housing is welcome. This is a particularly appropriate role for the GTSB now that costs of these programs are pooled across the GTA. In addition to considering the costs and administration of social assistance and social housing, the GTSB will have the potential to support a more co-ordinated approach in identifying needs related to these programs and developing co-ordinated strategies to address the needs.

Other forums to discuss GTA issues do exist. These include the GTA Mayors' and Regional Chairs' Committee and the Greater Toronto Co-ordinating Committee under the auspices of the provincial Office for the Greater Toronto Area. These forums have generally only been successful where the Councils of the affected municipalities could reach a mutually beneficial agreement, often with provincial subsidies provided as an incentive. They have failed to resolve major issues related to growth management in the GTA. In addition, they lack formal powers or even the formal accountability structures to be persuasive.

The GTSB will provide a more balanced forum for the debate of GTA issues. Its representative structure and legislated mandate will provide a more accountable means for setting and addressing the region-wide agenda than groups such as the GTA Mayors' and Regional Chairs' Committee. It is recommended that Council support the establishment of a GTSB as constituted in Bill 56, subject to the following comments.

Growth Management Issues:

Ensuring that urban growth respects the natural environment and provides the most cost effective and efficient use of infrastructure and scarce public resources is a major challenge facing the GTA. Growth management requires co-ordinated decision-making and the co-operation of all levels of government in the development of land and the provision of infrastructure and services. Bill 56 is a significant first step in meeting the challenge but has some shortcomings that can be addressed through amendments to the Act.

Paragraph 1 in section 3 of the Act lists one of the objects of the GTSB as being to "promote and facilitate co-ordinated decision-making among the municipalities in the Greater Toronto Area."

Section 22 (1) states that "for the purpose of carrying out its object under paragraph 1 of section 3, the Board may promote and facilitate co-ordinated decision-making among and adopt, by by-law, strategies for municipalities within the GTA with respect to the provision and optimal use of infrastructure.

The Executive Director of City Planning/Chief Planner advises that the provisions in section 22 give rise to the following concerns:

(i)Fundamentally, the Act does not link strategies of the Board respecting inter-regional infrastructure to land use and planned growth as expressed in approved official plans. The "Planning Act" provides that all municipal by-laws and public works must conform to the provisions of official plans. The "Planning Act" also provides that, where regional official plans are in effect, local municipal plans must conform to them. The Ministry of Municipal Affairs and Housing has approved official plans for all regions within the GTA. These plans provide for long-term population and employment growth and establish urban settlement boundaries. It is important that the pre-eminence of planning policy be recognized in the provisions of Bill 56.

(ii)Bill 56 contains no definition of the term "strategy." A definition would provide clarity.

(iii)The adoption of a strategy under section 22 is not a requirement of the Board. It is an option. This weakens the Board in its role of promoting and facilitating co-ordinated decision-making.

(iv)There is no provision for the Board, its operators and agents to act in a manner consistent with Board strategies. This is an important omission. For example, a Board strategy aimed at curbing urban sprawl could be compromised if, under section 61 (1) (j), the Board entered into agreements with upper tier or single tier municipalities for the provision of transit services outside the transit area (that is, the GTA and Hamilton-Wentworth), which could promote sprawl.

(v)The Act makes no reference to provincial infrastructure planning being required to have regard to the strategies of the Board. This type of co-ordination is necessary for the Board to be effective.

(vi)There does not appear to be any requirement for new municipal infrastructure to be consistent with the Board's strategies. It is not clear how compliance would be assured.

In order to address these concerns, it is recommended that the provincial government make the following amendments to Bill 56:

(a)provide a definition of the term "strategy" in section 1 (1);

(b)amend section 22 to provide that:

(i)the Board be required to adopt strategies for municipalities within the GTA with respect to the provision and optimal use of infrastructure;

(ii)infrastructure strategies that the Board adopts respect the provisions of official plans as amended from time to time;

(iii)infrastructure planning undertaken by the Province has regard to the strategies of the Board;

(iv)the actions of the Board, its operators and agents be consistent with the Board's strategies; and

(v)municipalities be required to certify to the Board consistency of proposed new municipal infrastructure with Board strategies as part of the demonstration of need in the Environmental Assessment process.

Financing Issues:

The Chief Financial Officer and Treasurer advises that the draft legislation's provisions concerning the GTSB's ability to finance its proposed responsibilities give rise to several issues. These issues include the manner in which the GTSB apportions costs and is able to levy a charge against member municipalities, and implications for the management of debt.

Ability to Levy the Member Municipalities:

While the Act does not provide the GTSB with the authority to tax directly, it proposes that the GTSB would levy against the Regions of Durham, Halton, Peel and York and the City of Toronto an amount sufficient to pay the estimated operating costs of the GTSB. These levies would be apportioned among the GTA municipalities in accordance with the legislation and the monies owed by the GTA municipalities under this levy would constitute debt of the municipalities.

With respect to GT Transit, the GTSB would be able to impose two levies on its member municipalities (including the Region of Hamilton-Wentworth):

(i)to cover the amount by which the cost of operations and non funded liabilities exceed revenues; and

(ii)for the cost to the GTSB of capital borrowing for GT Transit.

These levies would constitute debt of the member municipalities.

Levy Apportionment:

The method of levy apportionment, as set out in section 28 (2) of the Act, would be based upon the total weighted assessment of each of the member municipalities in proportion to the total weighted assessment of the GTA. This method bears no relation to the issue of affordability and ability to pay or to the amount of service that would be utilized by the residents of a municipality. If this method is used to apportion debt obligations and debt charges, it could have negative implications for Toronto's credit rating since the City could be responsible for a level of debt that is in excess of its capacity and impair the City's ability to issue debt for other projects.

In time, if the GTSB's role evolves to encompass a broader range of responsibilities, the balance of whose benefits are broadly distributed across the GTA, including the City of Toronto, a system of levy apportionment based on weighted assessment may make sense. At present such an approach is not in the City's best interest. It is recommended that Council inform the Minister of Municipal Affairs and Housing that the City of Toronto opposes the method of levy apportionment based on weighted assessment, as set out in section 28 (2) of Bill 56, and request the provincial government to work with City staff to identify alternative approaches to levy apportionment by the GTSB.

Borrowing for Capital Purposes:

The draft legislation provides for the GTSB to be permitted to borrow for GT Transit's capital requirements (not including operating) with the passage of a by-law by a 2/3 majority of the Board. Subsections 61 (1) (b) and (c) establish that the GTSB has the power to borrow money to fund the capital requirements of GT Transit and issue debentures, subject to the "Ontario Municipal Board Act." Under subsection 61 (1) (d), the GTSB also has the authority to direct one or more member municipalities to pay money to GT Transit in respect of its capital requirements and it is assumed that these municipalities will probably be issuing debt to finance these contributions. Thus, it appears that the legislation is contemplating a two-stage procedure. Initially the GTSB will require its members to issue debt to provide some initial start-up capital. The GTSB will then enter the financial markets on its own behalf in the future after it has had an opportunity to establish some credibility with potential investors and the credit rating agencies.

Until it becomes clearer how the GTSB's role within the GTA is going to evolve, it should not have direct borrowing powers as these could bring instability to financial markets and impair the flexibility of member municipalities with respect to the issuance of debt. Therefore, it is recommended that the provincial government be requested to amend Bill 56 by removing the GTSB's power to directly access financial markets. Instead, the Board should determine its capital financing requirements and request funding from the member municipalities, which would have the flexibility to raise the funds from reserves, current operations or the issuance of debt. This method could create more flexibility for the members who would not be subject to paying future debt charges that they cannot control and could substitute various forms of capital depending upon their individual circumstances. This would require the GTSB to have some "levying powers" as provided for in the Act.

Representation Issues:

In its response to the draft legislation of March 1998, Council expressed concern that the City of Toronto would be under-represented on both the GTSB and GT Transit in matters concerning GO Transit. The provincial government has addressed this concern in Bill 56 by ensuring that the City of Toronto has half the votes on the GTSB for all matters. The initial composition and weighted voting system gives Toronto 59 votes out of 118 on matters related to GT Transit and 55 votes out of 110 on other matters.

The composition of the GTSB will be reviewed after each national census of population and the composition of the Board will be adjusted to reflect the distribution of population in the GTA. Over time, Toronto's representation on the GTSB will decline as its share of total GTA population declines. However, given the timing of the census, Toronto's initial representation on the GTSB is expected to hold through the 2000 - 2003 term. If the results of the 2001 census are not available in time for the 2003 election, the initial representation model could hold for the 2003 - 2006 term as well.

Under Bill 56, Toronto will continue to be under-represented on the Board of GO Transit, having just one vote out of six. This under-representation is somewhat mitigated by the fact that general direction and control over the GT Transit Authority and allocation of its costs will be exercised by the GTSB, where Toronto will be fairly represented. Nevertheless, it is recommended that Council request the provincial government to amend Bill 56 in order to increase the City of Toronto's representation on GT Transit to 50 per cent.

Conclusions:

Numerous studies have concluded that there is a need to recognize that the GTA is an integrated and inter-dependent social and economic city-region. These studies have pointed to the need to co-ordinate the planning and development of infrastructure across the GTA. The "Greater Toronto Services Board Act" represents the culmination of many years of research and much debate.

The Act is a reasonable starting point and should be supported. It presents a window of opportunity to establish a representative political body that has a legislated mandate to begin to deal with GTA issues. It has taken many years to reach this stage. If the opportunity to create the GTSB is not grasped now, it may not be available for many more years. Yet the problems of uncoordinated growth and inefficient investment in the GTA and their implications for the City of Toronto and, ultimately, the entire city-region, will not disappear.

It is recommended that this report be forwarded to the Minister of Municipal Affairs and Housing, all Regional and Area Municipal Councils in the GTA, the Council of the Regional Municipality of Hamilton-Wentworth and Mr. Alan Tonks, the GTSB Moderator, as the City of Toronto's response to Bill 56.

Contact Name:

Phillip Abrahams, Strategic and Corporate Policy; 392-8102.

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Appendix 1

Highlights of Bill 56: "An Act to establish the Greater Toronto Services Board and the Greater Toronto Transit Authority and to amend the Toronto Area Transit Operating Authority Act"

(A)Composition and Mandate of the Proposed Greater Toronto Services Board

Composition

(1)The proposed GTSB would have an initial membership of 40, including at least one member from each municipality in the GTA, plus a chair, plus one member from Hamilton-Wentworth, appointed only for the purposes of GT Transit.

(2)The chair would be elected by the GTSB members, and would not be a member of any municipal council within the regional transit area, which includes all GTA municipalities and Hamilton-Wentworth.

(3)All GTA regional chairs and Mayors, and the regional chair of Hamilton-Wentworth, would be members. The City of Toronto would have 10 additional members, and the City of Mississauga would have one additional member (who is also a member of Peel Regional Council). The additional members would be appointed by their municipal councils.

(4)After each national census, the GTSB would be required to review the composition of the board to reflect population changes in the GTA. Each municipality in the GTA would continue to have at least one member.

Quorum and Voting

(1)A quorum for non-GT Transit matters must include a majority of members entitled to vote on an issue (at least 21 of the 40 members), and at least one member from a majority of the participating municipalities (one member from within the geographic areas of at least three of Durham, Halton, Peel, Toronto and York).

(2)A quorum for GT Transit-related matters would include a majority of members entitled to vote (at least 21 of 41 members, and at least one member from within the geographic area of four of Durham, Halton, Hamilton-Wentworth, Peel, Toronto and York).

(3)All GTSB members would have at least one vote. Votes would be weighted to achieve representation by population on a regional basis. The Hamilton-Wentworth representative would have a vote with a weight of four on GT Transit issues. (See attached chart.)

(4)The initial composition and weighted voting system gives Toronto 59 votes out of 118 on matters related to GT Transit and 55 votes out of 110 on other matters.

Mandate and Powers

(1)The board would promote co-ordination of decision-making among the municipalities of the Greater Toronto Area.

(2)It would exercise general direction and control over the GT Transit Authority, and allocate the costs of GT Transit and the borrowing to meet the capital requirements of GT Transit.

(3)While GTA municipalities would continue to be responsible for all their own service functions, the GTSB could have a number of roles. It could:

(a)promote co-ordinated decision-making;

(b)act as a liaison among municipalities and other levels of government;

(c)facilitate resolution of matters of inter-municipal concern within its mandate when asked by an affected municipality;

(d)facilitate resolution of matters outside its mandate on request from a member municipality and with a majority vote of the GTSB;

(e)provide for the co-ordination of economic development and tourism with the GTA; and

(f)promote co-ordinated decision-making among, and develop advisory strategies for, municipalities within the GTA with respect to the administration and costs of social assistance and social housing.

(4)The GTSB might also prepare strategies with respect to the provision and optimal use of infrastructure. Adoption would require a two-thirds majority vote. Strategies, once adopted, would have a strong persuasive value, but it would remain up to a municipality to determine whether to implement a GTSB strategy when planning for municipal infrastructure requirements. For example, a GTSB strategy that dealt with solid waste management could not mandate the use or location of existing or new landfill sites.

(5)The GTSB would be able to levy, to cover its own operating costs, against the City of Toronto and the Regional Municipalities of Halton, Peel, York and Durham. For GT Transit purposes, it could also levy against the Regional Municipality of Hamilton-Wentworth.

(6)The GTSB would - prior to December 31, 2000 - review its size and composition, the number of votes assigned to members, powers and boundaries. It would report to the Minister of Municipal Affairs and Housing on or after January 1, 2001. The review might consider redefining boundaries to exclude a municipality, but could not consider an expansion of the current GTSB boundaries.

(B) Composition and Mandate of Proposed GT Transit

(1)The legislation would establish a Greater Toronto Transit Authority (GT Transit) as a corporation without share capital. GT Transit's responsibilities would include the provision of GO Transit rail and bus services.

Mandate of GT Transit

(1)GT Transit has four objectives as proposed in the legislation:

(a)operate (or cause to be operated) a regional transit system (GO Transit) serving the regional transit area and other municipalities by agreement;

(b)operate (or cause to be operated) local transit systems within the regional transit area under agreements between the GTSB and the municipalities within which each local transit system is operated;

(c)exchange information on operation and design matters and integrate services with other transit systems; and

(d)perform duties and exercise powers conferred by this legislation or any other Act.

Composition and Chair of GT Transit

(1)Until 2000, members of GT Transit would include a chair appointed by the Lieutenant Governor in Council, the mayor of Toronto and the chairs of Durham, Halton, Hamilton-Wentworth, Peel and York regions. These are the members of the current Toronto Area Transit Operating Authority, which now operates GO Transit.

(2)After 2000, GT Transit would consist of six members, who are also members of the GTSB, and a chair. One member would be from Toronto, one from each of the regions of Durham, Halton, Peel and York, and one would be the chair of the Regional Municipality of Hamilton-Wentworth. If one of these members is chosen to chair GT Transit, the municipality that appointed the member would appoint another of its GTSB members as its GT Transit member.

(3)Each member of GT Transit would have one vote. The chair would vote only to break a tie.

Powers of GT Transit

(1)GT Transit would be subject to the general direction and control of the GTSB.

(2)Subject to this direction, GT Transit would have the power to undertake the objects set out above. Powers would be similar to those currently provided to GO Transit, including powers to:

(a)acquire and sell land, transit vehicles and equipment;

(b)operating parking lots; and

(c)enter into agreements in connection with the operation of a regional transit system.

GT Transit would employ a managing director, and such other officials and employees as it considered necessary to carry out its mandate.

GT Transit Levy

(1)In addition to levying for its own operating costs, the GTSB would be able to impose two levies against member municipalities for GT Transit purposes - one for the amount by which GT Transit operating costs and unfunded liabilities exceeded revenues, and the second for the cost to the GTSB for capital borrowing for GT Transit.

(2)The levy arising from operating costs would be determined for the transitional period by a formula set out in the legislation and in regulation. The GTSB would be able to amend the formula by a two-thirds vote.

(3)The levy for the cost of capital borrowing would be allocated by the GTSB, by a two-thirds vote, against one or more participating municipality.

(4)The GTSB could also direct regional municipalities and the city of Toronto to make payments for GT Transit capital requirements. They would have the power to borrow to make such payments; if they do so, this debt would be a debt of the participating municipality and not of GT Transit or the GTSB.