The public sector is not in the driver's seat
It is clear that the public sector is not leading the development process. For all the talk of a policy-driven regulatory environment, the policy process remains fragmented among many competing jurisdictions. Former Premier Mike Harris's "Common Sense Revolution" devolved powers and responsibilities to local governments and then withdrew direct provincial involvement in the coordination of cross-boundary issues. By letting the market allocate population and employment growth based on municipal competitiveness, it was expected that both municipal governments and the province's economy as a whole would become more efficient.
The system has not worked entirely as the Conservatives intended. First, weighed down by their new responsibilities, municipalities have not behaved entrepreneurially with respect to the financing of the capital investment required for expansion. In particular, they are reluctant to borrow to finance large-scale works.
Second, competition for growth to increase tax assessment has resulted in self-destructive growth patterns. Residential units are often built at a price point that will generate less property tax revenue than the amount needed to cover the cost of servicing them.126
Third, emphasis on greenfield development discourages intensification and infrastructure reinvestment in existing areas.
Finally, cross-boundary problems such as investment in water and wastewater treatment and regional transit need attention that the Province has not been inclined to provide and that other jurisdictions, such as Simcoe County, are not empowered to undertake.