Strike rebate cheque not a sure thing

Unlike in Windsor, councillors here don't favour returning money saved during walkout to residents

Toronto expects to reap savings from the 39-day civic workers' strike, but residents hoping for a rebate cheque in the mail are likely to be disappointed.

Toronto city council, unlike Windsor politicians facing a similar question, may hold on to the windfall and apply it to next year's budget, lowering the expected spike in property taxes and garbage fees.

The final tally of strike savings may not be known until October.

Council's budget committee is expected to tackle the tricky issue of what to do with the savings on Sept. 18, with a third option being to simply provide a credit on tax or garbage bills. 

Committee members who typically back Mayor David Miller don't support mailing out rebates.

"Issuing a government cheque can be a costly exercise," said Councillor Joe Mihevc. "It's not just the stamps and the envelopes, it's also the processing."

Miller said a big problem with rebates is determining how to distribute the money fairly.

"It's difficult to figure out the equity, because why should the TD Bank get a tax break when it's the poorest people in this city – who are predominantly tenants – who didn't get the services for their children?" Miller told the Star's Vanessa Lu last week.

Budget chief Shelley Carroll declined to comment on the issue.

Councillor Gord Perks said he wants to avoid sending out cheques and then promptly approving big hikes in property taxes and solid waste fees.

"If we were to give a rebate, we'd spend a whole bunch of money mailing everybody a cheque just so we could tax it back next year," Perks said. "It doesn't make much sense."

While cautioning that no discussions have yet been held, Perks said he thinks the most prudent strategy would be to treat the windfall as a surplus and plug the money into the 2010 city budget.

It's not unusual at the end of the year for various city departments and agencies to have money left over in their budgets. For example, the 2009 operating budget received $74 million of monies unspent at the end of 2008.

The strike savings could be considered part of that surplus, said Councillor Adrian Heaps.

Speaking hypothetically, instead of having to raise residential taxes by 4 per cent in 2010, the hike could be limited to 3 per cent by using strike savings, he said.

"If there was $20 million saved during the strike, that represents a 1 per cent property tax hike. Let's say if property taxes were slated to go up 4 per cent, then maybe they need only go up 3 per cent because we saved a substantial amount during the strike."

Such a strategy doesn't sit well with Windsor Mayor Eddie Francis, whose municipality will also decide next month how to return money it saved during its strike to citizens. 

Francis said Windsor saved about $20 million, but incurred revenue losses and overtime expenses, and the final tally is still being worked out. He emphasized that from day one he has supported returning the savings directly to the voters in some fashion.

"We were being accused of forcing workers out on strike because we wanted to save money to close our budget gap," he said. "So we immediately communicated that any net savings from the strike would be returned to the residents."

Anything less would sow cynicism among voters, he said.

"I don't want the strike savings to be subsidizing the 2010 budget in any way because to do that would then lend credibility to the argument that the strike was just to help us balance the books.

"I think we should be able to balance our books and deliver a zero per cent tax increase without the need for strike savings," he added. "I would rather people get the savings directly."

Toronto residents deserve similar treatment, said Councillor Doug Holyday.

"I'd like to see a credit given so people can actually see that they've received a reduction," he said. "If it goes into the surplus, it's harder for people to see it. And I think it's in the interest of all that they do see it."

But Holyday was also leery of going the rebate cheque route.

"By the time you process it and mail it out, probably a good part of the savings would get eaten up. There's no sense wasting money to give money back. You've got to be able to do it in an efficient way."