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July 13, 2011, Toronto – This week, the City of Toronto implemented a buyout program under which 17,000 of 53,000 staff are eligible for up to six months salary to walk away.

July 13, 2011 
By Peter Sells

July 13, 2011, Toronto – This week, the City of Toronto implemented a buyout program under which 17,000 of 53,000 staff are eligible for up to six months salary to walk away.

Firefighters are not included in this particular offer, but the magnitude of the program should serve notice that Mayor Rob Ford is serious about downsizing. Fire staffing cuts are still coming, buyout or no buyout.

Although I covered Toronto’s budget woes in a previous blog, I must stress that this is by no means exclusively a local issue, nor is it only a concern for career departments – all municipal, regional, provincial and federal agencies need to look at their financial bottom lines very carefully right now.

The phrase think globally, act locally is usually applied in the context of environmental sustainability, but I’m going to employ it in a broader sense; something like; be aware of global trends and anticipate how they can affect your local operations. The terms global and local refer not only to geography, but also to wide or narrow spheres of business activity. Can you imagine that tremors in the world of international finance could impact your usually insular local fire service?


Well, let’s see. Staying away from Canada for the time being, two of the most powerful people on the planet – President Barack Obama and Speaker of the House John Boehner – have been cloistered away negotiating spending cuts, revenue options and how far into debt the world’s largest economy can be allowed to wallow. All of this mess needs to be resolved within the next two weeks or the United States will not be able to pay its bills.

Yesterday, Moody’s bond rating agency downgraded Ireland’s government bonds to junk status on expectation that a second bailout from healthier European countries will be needed to prop up the Irish economy. This is in the immediate wake of a similar but more severe downgrading of Portugal’s status in recent weeks. Greece is already negotiating a second bailout and faces the possibility of a credit default.

By now, you may be saying, “Interesting, but so what?” Some of you may not find this so interesting. This is why all of this is relevant to the Canadian fire service (as well as Canadian investors and consumers): even though the Canadian banking system is well regulated and emerged relatively unscathed in 2009, credit defaults or other significant problems in the world’s two largest economies (the United States and the European Union) cause ripples across the globe. Your bank may not be invested in Greece, but it is probably invested in American or German banks or funds that are invested in Greece. A Greek default ultimately hurts the bottom line of your bank, your credit union or your pension fund. The budgets of our upper-tier federal and provincial governments are also affected negatively, as their investments get hit and international aid obligations kick in. All money becomes more expensive.

The end result – because we all know what runs downhill – lands on your municipal budget. What does this mean for you?

  • Your staffing is subject to review at any time.
  • Pension contributions by members and employers are likewise not carved in stone.
  • Commodities go up in uncertain times (your fuel costs will continue to rise).
  • Your plans for that new station may not come to pass as soon as you thought.
  • You need to review your personal financial situation, especially if you are closing in on retirement (this is always a good idea, not just now).

Fire services are expensive line items in municipal budgets – essentially insurance policies with escalating premiums. Governments – and not just Toronto – have some tough choices to make.


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