Beyond the New Deal for Cities

Centre for Urban and Community Studies Research Bulletin #21 March 2004 Beyond the New Deal for Cities Confronting the Challenges of Uneven Urban Growth by Larry S. Bourne Department of Geography and Programme in Planning, University of Toronto 1. A Debate out of Context The continuing debate on a new urban agenda in Canada has largely focused on the striking imbalance between the revenue sources and service responsibilities of cities and other local municipalities. Newspaper stories and images abound of decaying infrastructure, under-funded transit, housing shortages, rising deficits, and concentrated poverty. The recent Speech from the Throne of the new federal Liberal government promises a New Deal for cities that will address part of the underlying fiscal imbalance, using GST exemptions and possibly assigning a proportion of the federal gasoline tax to local municipalities. These announcements, while generally welcomed at the local level as a step in the right direction, are nonetheless inadequate. First, they represent little more than attempts to rebalance accounting practices rather than to address the serious problems cities face, or to achieve urban sustainability in any comprehensive sense. No matter how the term urban sustainability is defined, it involves a much broader set of issues than those represented by the tax base. Second, the debate lacks context. Cities and local municipalities are often treated as separate entities, divorced from each other and detached from national and global forces of change. Few proponents of the New Deal address the fundamental economic, social, and demographic processes that are reshaping urban Canada, processes that will be far more influential in determining whether we can sustain, let alone improve, our urban living environments. This research bulletin provides a context for recent policy initiatives that purport to achieve urban sustainability by summarizing the new economic, social, and demographic realities driving change in urban Canada, especially the decreasing rate, increasing temporal variability, differential character, and geographical unevenness of urban growth. Enhancing urban sustainability depends, in the first instance, on recognizing the challenges posed by uncertainty and uneven growth. Local municipalities are not the most suitable frame for the debate. They vary immensely, not only in their size (from small towns, counties, and rural districts to large cities and metropolitan areas), but in terms of their revenue sources, social capital, and fiscal capacity, as well as the range of services they offer to residents. City-regions are the emerging spatial form of the new urban dynamic. They also have the advantage of not being provincial creations or dependencies. 2. Uneven Growth Patterns Growth and change in Canada has never been even across the country. Cities in the east, for most of the last 50 years, have grown more slowly than those in southern Ontario and the west. Larger cities, on average, have usually, although not invariably, done better than smaller places. Small towns, rural areas, and the northern periphery have always shown wide swings in population and employment growth rates over time, largely in response to fluctuations in global commodity prices. Yet the results of the 2001 Census suggest that we are entering a new urban era (Simmons and Bourne 2004). This era is characterized by much slower growth

CUCS Research Bulletin #21 page 2 overall, especially in population, and wide variations in growth rates over time. It is also a period characterized by a markedly uneven geographic distribution of that growth, and an increasing differentiation between growing places and stagnant or declining places. The outcome is likely to be sharper differentials in the quality of urban living conditions, in the work opportunities available to Canadians in different regions and in their ability to accumulate assets, and in the challenges posed to governments and the public sector generally. Few of these trends are responses to municipal tax rate imbalances. The traditional view has been that most urban centres in Canada could look forward to a future of continued growth, albeit in some cases slowly, largely as a response to high fertility levels. Almost everywhere in the country would continue to grow. Population growth would be generally matched by economic growth (that is, jobs), and for municipalities, by revenue growth. Mobility rates would remain high. When opportunities presented themselves in other locations, people would be able to move to those places, carrying with them skills, income, assets, and political affiliations. The end of high levels of growth This high-growth period has clearly ended. Fertility rates, and thus rates of natural increase, are at an alltime low. The blanket of fertility-based growth has been removed. In most parts of the country, fertility rates do not come close to replacing the base population. Mobility rates have declined and people are more selective in their reasons for moving and their choice of destinations. Moreover, population movements are now more detached from employment growth than in the past. At the same time, economic activity, within a highly competitive global climate, has become more concentrated in a few large metropolitan regions. Population aging The result is a rapidly aging population, and, for urban places unable to compete for in-migrants, widespread decline. Of the 140 urban areas that had populations over 10,000 in Canada in 2001 defined by Statistics Canada as census metropolitan areas (CMAs) and New patterns of growth The 2001 Census results suggest that we are entering a new urban era characterized by much slower population growth and wide variations in growth rates over time. The period is also marked by an uneven geographical distribution of that growth, and an increasing differentiation between growing places and stagnant or declining places. smaller census agglomerations (CAs) more than 40% saw an absolute decline in population during the 1996-2001 period. Indeed, more than half of all places with populations of less than 250,000 lost population. The aging demographic structure of these communities will ensure continued population decline in the future, unless they can attract in-migrants. As the local market shrinks, the number of jobs and fiscal resources will also decline, likely at a faster rate. Immigration As fertility has declined, an increasing proportion of the country s annual population growth, now over 50%, can be attributed to immigration from abroad. This flow has a different set of causal factors and destinations from domestic migration. Indeed, immigration is increasingly concentrated, focused on a few metropolitan gateway centres. This concentration reinforces the uneven geographical pattern of population, economic, and fiscal growth. Focused immigration is also contributing to an even sharper differentiation in the social characteristics of urban areas, and in the life prospects of Canadians. Most successful urban places are those that attract migrants, especially immigrants. These immigrants, in turn, transform these destinations, in social and cultural terms, further distinguishing these places from the rest of the country. Concentration in large metropolitan areas The concentration of growth in a few favoured locations, notably the larger metropolitan areas, is wellknown, but the consequences have yet to be identified. These metropolitan areas are not only the destinations for most of the country s new immigrants, they are attracting previous immigrants who had initially gone to other parts of the country. They are also becoming the principal locations of the country s social transformation. The combination of declining rates of natural increase and highly focused immigration flows has divided the country into growing and declining places more sharply than in the past, and into communities that are increasingly homogeneous or increasingly heterogeneous in social characteristics.

CUCS Research Bulletin #21 page 3 Decline in smaller places Growth rates decline systematically with increasing distance from a metropolitan area. For those areas of the country that are not within commuting distance of a metropolitan area in other words, that lie outside the influence of the metropolitan labour market average growth rates are negative ( 0.4%). Few places outside the area of metropolitan influence, with the exception of a limited number of retirement and recreational centres in scenic areas, are currently growing. Viewed through this lens, much of Canada s settlement fabric is not sustainable at its current level. Decentralization of jobs and people At the local scale, the decentralization of jobs and population has continued, spreading urban development and influence over vast territories and many local municipalities. This decentralization process has left many older municipalities with reduced economic bases, declining fiscal capacity, and pockets of concentrated poverty. Although many people are leaving the metropolitan areas in search of green space, cheaper housing and reduced congestion, they are not with the exception of those destined for popular retirement or recreational centres going very far. The unevenness of growth limits facing and change, fragmented and the municipal structural jurisdictions in responding to that unevenness, are clearly evident at the local and regional scales as well as the national scale. 3. How Do We Respond? The first challenge is simply to recognize the scale of the transformation that is under way in urban Canada and to move beyond the limited scope of the New Deal discourse on fiscal arrangements. This is the beginning of a difficult task of designing appropriate measures to deal with the consequences of that transformation for the sustainability of communities of all sizes. The challenges are perhaps most difficult, however, at the extremes of the distribution of growth. On the one hand are the challenges posed by the rapid growth and increasing diversity of larger metropolitan areas, especially the immigrant gateway cities. These places are playing a game of catch-up in terms of infrastructure and social services, but without help they will fall farther behind. On the other hand are the challenges posed Two sets of challenges Larger metropolitan areas require a strategy for accommodating growth that takes into account the demands of in-migrants, notably those from outside the country. Declining places, on the other hand, need strategies that recognize their vulnerability and limited resources. by widespread stagnation and population and employment decline in communities in the country s nonmetropolitan areas, in its aboriginal communities, and in the resource-based periphery. These are the communities at risk. These two sets of challenges require different policy responses. The former places, for example, require a strategy for accommodating growth that takes into account the demands of in-migrants, notably those from outside the country. Since growing places tend to be larger and thus have higher land and congestion costs, they will also require different kinds of housing and transportation strategies, and a differing mix of social subsidies and services. Urban governments in such regions need access to a wider variety of revenue sources and funding instruments, and the ability to borrow against anticipated growth. To the extent that the growth of individual city-regions is driven by immigration, they will also require a much higher level of social and settlement assistance than has been available to date. Current estimates suggest that such assistance from the federal government amounts to about $1,500 per immigrant, which is insufficient to cover the additional costs of accommodating a new member of the community. In other words, the federal government s current urban policy is, in fact, its immigration policy. Since maintaining high levels of immigration is a stated national goal, the costs of accommodating such growth should also be national. Declining places, on the other hand, need strategies that recognize their vulnerability and limited resources and the inevitably of a decreasing population and employment base. Can we develop strategies that allow for systematic downsizing in ways that are both efficient and equitable? Can planned community downsizing cushion the effects for those left behind, by sustaining appropriate, albeit lower, levels of social services and infrastructure, and by protecting the natural and built environments? Can we take an urban region of, for example, 130,000 people and facilitate its gradual shrinkage to a smaller but more sustainable place with an equilibrium population of say 80,000 people? These kinds of questions must be addressed if we are to ensure

CUCS Research Bulletin #21 page 4 a reasonable quality of life in the future for Canada s cities and smaller urban communities. Within metropolitan Canada, the decentralization of jobs, housing, and people raises another set of issues, not only related to the fiscal capacity to accommodate growth on the fringe, but the challenge of maintaining social services and infrastructure in the older core. These locational processes are rarely contained within municipal boundaries. In a politically fragmented urban landscape, externalities (or spill-over effects) almost guarantee intense inter-municipal competition for scarce resources. Potential solutions can be found only when the frame of reference is the entire metropolitan area or city-region, not individual local municipalities. 4. Conclusion: The Need for a City- Region Frame of Reference The current debate on a New Deal for urban Canada fails to take into account the underlying trends in urban growth, and is too narrowly defined, focused as it is almost exclusively on reducing the fiscal imbalance facing most local municipalities. Correcting that imbalance is important, but the challenge of maintaining or sustaining our cities and city-regions and of addressing social issues is a much broader task than rearranging the local tax and responsibility ledger. Furthermore, a focus on individual cities and local municipalities does not constitute a national strategy. Such a narrow, fragmented approach is likely to be inefficient and inequitable, and potentially self-defeating. An approach based on municipalities, given the large number of such entities, tends to diffuse the potential impacts of policy initiatives and public investments over too many locations. It also raises the possibility of political conflicts with provincial governments. Such conflict, in turn, would likely make it even more difficult to implement any new and innovative policies. The most suitable frame of reference for any government strategy aimed at improving urban conditions is that of functional city-regions that combine both city and suburb, as well as adjacent, integrated municipal units. These regions more closely mirror the social and economic organization of contemporary urban society. They can also be used to coordinate planning and enhance cooperation among local municipalities including revenue sharing and expenditure on such items as social services and infrastructure. The future of our urban places will be shaped by the dynamics of population and economic growth. These dynamics suggest that many of our smaller cities, towns and rural communities are not sustainable, at least in their current form or at their current size. We must think about how to address the issues posed by uneven urban and regional growth with appropriate policy tools applied at different spatial scales. The most obvious challenge is the contrast between continued metropolitan concentration and widespread stagnation and decline and the consequences of this divergence for sustaining the quality of life in Canada. Reference Simmons, J. and Bourne, L.S. 2004. Urban Growth and Decline in Canada, 1971-2001: Explanations and Implications. Research Paper 201. Toronto: Centre for Urban and Community Studies, University of Toronto. This Research Bulletin is based in part on the data and analysis published in the following two research papers by Professors Jim Simmons and Larry S. Bourne. The Canadian Urban System, 1971-2001: Responses to a Changing World Jim Simmons and Larry S. Bourne, Research Paper 200, Sept. 2003, viii, 71 pp. 14 tables. 22 figures. $12.00 Urban Growth and Decline in Canada, 1971-2001: Explanations and Implications Jim Simmons and Larry S. Bourne, Research Paper 201, March 2004, x, 43 pp. 11 tables. 5 figures. $10.00 To order a copy: Send your name, mailing address, and cheque or money order payable to Centre for Urban and Community Studies, Publications Office, Centre for Urban and Communty Studies, University of Toronto, 455 Spadina Avenue, Suite 400, Toronto, Ontario, Canada M5S 2G8. Canadian orders add 7% GST (Registration R108162330). Add the appropriate shipping costs: No charge for shipping to users of Ontario's Inter-University Transit Service (IUTS). Canada & United States: $3.00 first item; $1.50 each additional item. All other countries: $7.00 first item; $4.00 each additional item. All rates are for surface mail: information on other rates on request. Special: $25 for both papers, including taxes and postage (in North America only).

CUCS Research Bulletin #21 page 5 Larry S. Bourne is Professor of Geography and Planning at the University of Toronto, and is past director of the Centre for Urban and Community Studies. An earlier draft of this paper was presented at a conference on Challenging Cities, organized by the McGill Centre for the Study of Canada. Recent CUCS Research Bulletins (available at: www.urbancentre.utoronto.ca) The housing careers of two immigrant groups in Toronto: A comparison of Polish and Somali experiences, R. Murdie, #9, June 2002. Downtown parking lots: An interim use that just won t go away, A. Belaieff, #10, August 2002. Housing discrimination in Canada: What do we know about it?, S. Novac, J. Darden, J.D. Hulchanski, and A.-M. Seguin, with the assistance of F. Bernèche, #11, December 2002. Ethnic segregation in Toronto and the new multiculturalism, M.A. Qadeer, #12, January 2003. What is the social economy? J. Quarter, L. Mook, and B.J. Richmond, #13, March 2003. The right to adequate housing in Canada, B. Porter, #14, April 2003. Housing as a socio-economic determinant of health: Assessing research needs, J.R. Dunn, #15, June 2003. Rooming house residents: Challenging the stereotypes, S. Hwang, R. Martin, J.D. Hulchanski, and G. Tolomiczenko, #16, June 2003. Housing affordability, income, and food bank users in the Greater Toronto Area, 1990-2000, J. H. Michalski, #17, July 2003. The Canadian urban system, 1971-2001: Responses to a changing world, J. Simmons and L. Bourne, #18, September 2003. Bed bugs in Toronto, T. Myles, B. Brown, B. Bedard, R. Bhooi, K. Bruyere, A.-L. Chua, M. Macsai, R. Menezes, A. Salwan, and M. Takahashi, #19, December 2003. Transforming the Non-Market Housing System in Ontario: How the Distinctions Between Public Housing and Co-operative Housing Are Breaking Down, J. Sousa and J. Quarter, # 20, January 2004. The Centre for Urban and Community Studies promotes and disseminates multidisciplinary research and policy analysis on urban issues. The Centre was established in 1964 as a research unit of the School of Graduate Studies. The Centre s activities are intended to contribute to scholarship on questions relating to the social and economic well-being of people who live and work in urban areas large and small, in Canada and around the world. CUCS Research Bulletins present a summary of the findings and analysis of the work of researchers associated with the Centre. The aim is to disseminate policy relevant findings to a broad audience. The views and interpretations offered by the author(s) do not necessarily reflect those of the Centre or the University. The contents of this Bulletin may be reprinted or distributed, including on the Internet, without permission provided it is not offered for sale, the content is not altered, and the source is properly credited. General Editors: J.D. Hulchanski, L.S. Bourne, and P. Campsie Centre for Urban and Community Studies 455 Spadina Ave, 4 th Floor, Toronto, Ontario, M5S 2G8; tel 416 978-2072; fax 416 978-7162 urban.centre@utoronto.ca www.urbancentre.utoronto.ca ISBN 0-7727-1432-0 Centre for Urban and Community Studies, University of Toronto 2004 Centre for Urban and Community Studies