Yes Virginia, Ford did save taxpayers $1B

Mayor Rob Ford's 2014 budget passes on Oct. 8, 2013 (c) The Globe and Mail / Chris Young

Did he, or didn’t he?

The late Rob Ford, former Mayor of Toronto and his brother Doug, then a Toronto City Councillor, used to boast they’d saved the taxpayers of Toronto $1 billion. Doug Ford, now the leading candidate to be Ontario’s next Premier after the June 7 provincial election, continues the boast. Every time the boast is uttered, critics explode with cries of “lies!” Who’s right?

They’re both wrong.

And, they’re both right. It depends, entirely on how you phrase the boast. It is true that Rob Ford saved Toronto taxpayers over $1 billion. It is also true that Rob Ford did not save the City of Toronto $1 billion. How can that be? Well, they’re two different statements – often mistakenly used interchangeably. Making matters more confusing, the Ford brothers themselves have often use the incorrect statement.

Let’s start with the facts.

Toronto’s Chief Financial Officer Rob Rossini confirmed in a March 27, 2014 briefing note to Council that the Mayor’s administration had saved the city $972 million. This was comprised of $753 million in savings in service efficiencies, $138.2 million from collective agreement savings, $44.8 million by contracting out residential garbage pick up in District 2, $30 million in user fees, $6.4 million in reductions to councillor’s office budgets, etc. Admittedly, that’s not $1 billion – but, it’s pretty damned close. The Toronto Star’s take on that briefing note is here.

The Ford brothers like to add in the $64 million annual savings to taxpayers created when Ford axed the vehicle registration tax. Critics leap to point out that this represents a cost to the city in the form of reduced revenue. The critics are right on that one. It should not be added to the total of savings to the city.

But, the $64 million savings from repealing vehicle registration tax is legitimately money saved by taxpayers. As such, it is completely appropriate to add it to the $972 million savings for a total savings to taxpayers of $1.033 billion. But, the Fords talk about cumulative savings over the 4-year term. So, they count the $64 million four times, i.e. $256 million – bringing the total savings to taxpayers to $1.229 billion.

Mayor Rob Ford added the savings up yet another way on his NEWSTALK1010 radio show on June 9, 2013 as described in the Toronto Sun.

The City Manager later “clarified” the CFO’s $973 million sum to mean budget savings rather than expenditure savings, pointing to the $30 million from user fee increases – which are additional costs to users. Ford himself, would have agreed (were he not the mayor) that those are akin to taxes. But the difference between budget savings and expenditure savings is moot from the taxpayer’s point of view – as are the protests of other critics (e.g. Councillor Gord Perks) that Ford’s savings are against projected vs. actual costs. That’s because tax rates are set at the beginning of the year, based on those projected costs, not at the end of the year based on actual costs. It’s the projected budget that taxpayers must pay for.

So, there you have it, folks. Here’s the truth:

  • Rob Ford saved the City of Toronto about $973 million (not quite $1 billion) according to the city’s CFO.
  • Rob Ford saved Toronto taxpayers about $1.229 billion.

It’s also true that Rob Ford introduced a time-limited special property tax levy to fund the Scarborough Subway. But, the Ford’s aren’t counting costs, are they? In the 2010-2014 council term, that levy cost taxpayers about $12 million. So… you be the judge.

Either way, the genius of the $1 billion savings claim is that – even if you argue he’s wrong about the number, you’re agreeing he’s saved the city hundreds of millions. And, there aren’t many other politicians in Canada who can say the same.