Strategy

Politics: Toronto is 'open for business'

Toronto's mayor–elect Rob Ford has declared the city "open for business."

As he celebrated his victory of Toronto’s recent mayoral election, a triumphant Rob Ford reiterated the catchphrases that gave him a decisive 47% of the popular vote. Still locked in campaign mode, Ford repeated his pledge to get respect for taxpayers and “stop the gravy train.” But it was another of his mantras, tweaked slightly to reflect the win, that best captured Ford’s transformation from hopeful to mayor-elect. “Toronto,” he declared from the podium of his victory party, “is now open for business.”

As the reality of Ford’s accomplishment sinks in, this bold proclamation, oft-repeated in media reports, has shifted from a victory slogan to something like a mission statement for his regime. But the extent to which the gregarious 41-year-old will be able to make good on the sound bite remains to be seen. While some observers take issue with the suggestion that the city is in some way “closed for business,” others wonder if Ford’s penny-pinching, tax-cutting agenda goes much beyond the platitudes that helped vault him into the city’s top office. “We can’t oppose somebody who is saying, ???Lets shake things up a bit,'” says Harry Kitchen, an expert in municipal politics at Trent University. “But I just don’t know how Ford is going to do it.” Or as Julia Deans, CEO of the Toronto City Summit Alliance, observes, “There are a lot of question marks about what [Ford’s] road map for attracting business will look like.”

In many ways, it’s this lack of specificity that defined the Ford campaign. “This was a pretty unique election in Ontario,” Kitchen says. “You had a person essentially running on ???Get off the gravy train,’ but not really spelling out how he was going to do it.” Not much has changed since. When asked to explain his “open for business” declaration, Ford, who is CFO of his family’s multimillion-dollar label-printing company, offered simply: “I’m a business person. I welcome people to come to the city and open up their businesses.” He was equally short on details to support the assertion, implicit in his open-for-business declaration, that the city’s current leadership and policies are somehow acting to deter commercial interests. As Ford told Canadian Business, he believes that a few unnecessary taxes, graffiti on the streets, and the fact that his predecessors at city hall “aren’t business people” are turning companies away.

But according to Alan Broadbent, Toronto entrepreneur and author of Urban Nation, there are no “undue barriers to business startup and development.” As he points out, when a review of the city finances under Mayor David Miller called for improved economic development, Toronto created Build Toronto and Invest Toronto, arms-lengths organizations with a “mandate from the mayor and council…that the city is indeed open for business.” (Broadbent sits on the Invest Toronto board.) Blake Hutcheson, CEO of Oxford Properties, concurs: “From a real estate standpoint, the City of Toronto has been very pro-business.”

Few members of the business community would protest Ford’s pledge to cut spending and taxes. As Lionel Miskin, head of the tax committee for the Toronto Association for Business Improvement Areas, puts it, “Anything that eases the burden helps.” But according to Broadbent, aside from Ford’s proposal to scrap the land-transfer tax, which he describes as a bid to “mollify some realtors,” there’s nothing that suggests a plan to significantly change the city’s relationship with the private sector. For all the mayor-elect’s bluster, says Broadbent, “I’m not aware that Rob Ford has any policies related to business.”

But Ford has made at least one promise that could have significant ramifications for the independent corporations: putting the city’s garbage collection contract out to tender. According to Benjamin Dachis, a policy analyst for the C.D. Howe Institute who authored a recent report on the benefits of competition in municipal waste services, fully contracting out garbage collection could save up to $50 million per year. Though he says that change is extremely unlikely until the current union contract expires in 2012, he insists, “the city could be open for business if this is something that the mayor and his staff and the city is really willing to push on.”

There are, however, several other big-ticket items that Ford has yet to address. Most pressing, perhaps, is the troubling migration of businesses from Toronto to the suburbs in recent years, which, says Miskin, is due primarily to the city’s high commercial tax rate, not the relatively insignificant taxes Ford has pledged to abolish. Likewise, says Deans, while Ford “seems to have an appreciation of the needs of business,” he has yet to signal his willingness to adopt a regional economic strategy — which she sees as one of the major roadblocks to securing outside investment.

Ford regularly cites his background as proof of his ability to bring fiscal responsibility to city hall. But history has shown that business experience is not always the best prerequisite for leading a city. In Ottawa, for instance, businessman Larry O’Brien was elected mayor in 2006 on a promise to cut spending and taxes. But by the time he was ousted in October, taxes had gone up 14%, and the city’s debt had more than doubled. The problem, says Kitchen, is that balancing dozens of competing interests is “a totally different ball game” than running a business. “It’s not as easy as a lot of these guys think.”

As Ford’s critics have been quick to point out, he’ll have to overcome significant political barriers to put his strong words — whether they pertain to cutting expenses or opening the city for business — into action. But as his win suggests, there is power in posturing, which can often have a profound effect regardless of actual policy change. As Kitchen observes, the very fact that Ford is threatening to cut back at city hall may cause staff to look for efficiencies — and “rethink the way in which they do business.”