LARRY'S CORNER- Hamilton's Former Mayor Speaks

It's The Economy, Stupid

By Larry Di Ianni
(posted November 24, 2008)

Bill Clinton won the presidency of the United States in 1992 by having the slogan "It's the Economy, Stupid" apparently stapled on every office wall belonging to his major campaign strategists. The epithet was a constant reminder that elections are won, or lost, on economic matters. People care about jobs. They care about opportunities for themselves and their families. And as President-elect Obama also discovered as he rode the winds of economic uncertainty to electoral victory, fully sixteen years after Bill Clinton, times may change, but the essential interests of voters are immutable.

Stephen Harper also learned this lesson during the Canadian Federal election campaign. What Harper hoped would be a majority cakewalk for his Conservatives, tumbled badly because the economy unravelled much faster than he had predicted. His reaction to the failing economic times was half-hearted and his poll numbers plummeted. Had it not been for a hapless Liberal party that was unable or unwilling to adjust to people's concerns and hammer away at an economic message, Harper may well have lost. Now, the Prime Minister is embracing a need to stimulate the economy as his personal mantra over debt-reduction and deficit-avoidance. He knows that it is all about the economy if he is to successfully defend himself at the polls in 18 months time. At that, he may find it difficult to undo the ravages of what many consider to be his fiscal irresponsibility thus far in frittering away a found $12 billion surplus to bring us to a $4 billion deficit.

Premier McGuinty's Liberals are safe for now, if only because his election is still three years away. His government has been prudent in balancing deficit reduction with the provision of adequate dollars for health care, education and municipal support. He, however, will have to face the same music from voters because Ontario's economy is suffering harshly especially in the manufacturing sector. As well, our collective psyche has taken a bruising in having descended to have not status for Ontario, the first time in history that has happened. People don't understand that Ontario gives the Federal government $20 billion yearly to redistribute around the country at the same time as our citizens and our economy is suffering. Premier McGuinty's "Fairness for Ontario" campaign during the federal election only worked to free up an additional $300 million or so from Federal coffers, a mere pittance of what is required. Time will tell how Ontario voters will react to these dynamics: a prudent government, a diminished status, and economic havoc.

Municipalities are the most vulnerable in tough economic times. Cities have the fewest levers to pull in order to advance economic issues. These levers are mostly in the Provincial and Federal arenas. As well, municipalities, unlike the other orders of government are prevented by law from going into deficit. This is not a bad thing, but it does limit the choices available to communities when striking their budgets. They can either raise taxes, or slash costs thereby reducing programs. Neither choice is a palatable one for local politicians, especially in tough times when those programs are more and more needed by out-of-work citizens. So, given what is coming, one has to feel sincere sympathy for Mayor Fred and his Council colleagues. However, there are some things that can be done.

In the long term, of course, Council should plan for Hamilton's place at the job-creating table. Despite anti-business organizations such as CATCH and Hamiltonians for Progressive Development who are trying to stop the Airport lands development, Council should heed the words of none other than Mayor Hazel McCallion, the doyenne of municipal leaders, who commented directly on what Hamilton should do to improve its economy. Her advice was to develop the lands around the airport! Many of us have been saying this for years now, with ample studies and reports to support the policy. This is a long term strategy, of course, but a necessary one. I would add that the North Glanbrook Industrial Park, for which we received $20 Million from the province to service the area, needs to be a top priority. It has been lagging for a couple of years now and I'm not sure why.

As well, Council should maintain its focus and programs on downtown redevelopment to encourage residential and business growth in this needy, but potential-filled area of the community. Recently, the City purchased a seedy adult entertainment building in our downtown core. This good move remedies two problems. It allows an unattractive business to leave the core, and it offers a new property for potential redevelopment. The city now needs to be aggressive on this newly purchased building as well as the former Sandbar building which has been languishing for a couple of years since I signed a deal with the province to take over that site.

As well, Council should control taxes. The equivalent mantra at the municipal level to "It's the Economy, Stupid" should be "It's about Taxes, Stupid". Local governments are judged by the tax increases they pass on to their residents. In Hamilton, area-rating makes this exercise a trickier one than most municipalities have to face, but it is nevertheless imperative that Council hold the line on taxes in this tough economic climate. Mayor Fred has to be commended for lately seeming to focus on this issue. I am not sure if shutting City Hall down for a period of time is the answer, but if his comments signal a 'not-business-as-usual" attitude, that is good leadership on his part. As well, the Mayor has been quoted as wanting reasonable increases for services such as HSR and that too is courageous given the opposition that he will meet. The fare increase will, of course, be more palatable if we find the $1.5 million that has disappeared from the fare boxes. You can't ask people to pay more if there is a perceived lack of diligence about the money that is collected.

However, Council needs to watch its costs in other areas as well. A hiring freeze is a good place to start, but there should be continual service delivery reviews to ensure reasonable standards of service and efficient cost-effective delivery of these services. For example snow clearance is a topical issue right now. We have a standard in Hamilton that may be higher than the provincial norm in terms of our snow removal. We pay a very high dollar to maintain that standard. I approved the higher dollars when I was Mayor. But in hard economic times is it a topic that should be broached with the community in striking this year's budget? I think, yes. Similarly, there are Councillors around the table who, while talking budget reductions, are expert at cranking up the expenditure side. This kind of politicking should be done away with during this tough period ahead.

And lastly, Council should differentiate between its wishes and its needs, and act accordingly. It would be great to clad the City Hall with marble or limestone, but is it affordable? It would be nice to have a pedestrian bridge in a number of places in the city, but is it affordable right now? It would be nice to enhance some by-laws but is it affordable right now? And there are many other examples where costs can be avoided.

Especially at a time when provincial assistance seems to be in greater jeopardy, beyond what the McGuinty government has generously done to this point, our Council will need its citizens' full support and understanding as they craft a budget for the tough days ahead. Their skill in presenting what is affordable and fair will be rewarded. The converse may also be true, however!

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