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Richard Florida, director of the Martin Prosperity Institute at U of T's Rotman School of Management, spoke about dismantling the divisions between urban and rural issues, local and national issues.

"We need to move across the divide," Florida said, bemoaning the state of U.S. affairs. He said cities shouldn't be isolated from other concerns. "It has to be our obligation in urban areas to lead and help ... to benefit everyone."

During questions, one member of the audience raised the spectre of the Canadian Constitution, which delineates the provinces' authority over municipalities.

"The Constitution is an excuse not to do something," Miller said later, pointing to overlap in areas such as immigration, which is a federal responsibility, yet is an issue for cities, where most immigrants settle.

Most of the panel, which included environmental philosopher Ingrid Stefanovic, argued that urban issues were inseparable from national issues – from climate change, transportation strategy and the country's economic health, to immigration and concerns about urban sprawl and the environment.

Stefanovic, who argued cities and the environment should be viewed as one issue, said: "I think all political parties have to recognize cities are going to be playing an important role – should be playing an important role – in this election."

According to Miller, "We have tied ourselves up in political correctness and NIMBYism. People have such a fear of change, but at some point things have to change."

The status quo, he warns, will lead inevitably to declining productivity and quality of life.

And while cities everywhere else are busy renewing themselves, Miller fears Canadians have grown complacent, taking the nation and cities' prosperity for granted.

"We need to develop a sense of urgency," he says. "Toronto is such a rich city, but we're not marshalling our strengths in an effective way."

At this point, Miller suggests, the best way to overcome inertia and get some momentum going is simply to pick a project and start.

Broadbent shows the shortcomings of the current model of large-city municipal governance, in which cities of millions of people, with complex social and infrastructure needs, are governed according to rules set out in 1867 when Canada’s largest cities were little more than towns. While there are many individual problems, such as revenue sources restricted to property taxes and fees, the crucial problem is that cities are entirely dependent on provincial governments for permission to do anything new in any field of activity.

This situation makes it impossible for Canadian cities to develop coherent, long-term programs and infrastructure to deal with the challenges faced by jurisdictions with millions of residents and billions of dollars of economic activity, because funding and powers can be arbitrarily changed or removed at any moment. The various current programs and proposals to “share” federal and provincial revenues (gas taxes, 1% of GST) are not much use because they can be taken away at any time, wrecking whatever programs were dependent on them. Broadbent argues

Control of destiny is at the heart of the new deal for cities. Cities need to be able to have a vision of their future, to create a credible plan to get there, and to implement the policies and programs that make that future vision a reality. (76)

People worry that cities would make mistakes, but, as Broadbent notes in a key passage:

The practice of provincial and federal governments treating city governments like children tends to make them act like children. And anyone who has raised children knows that they become responsible people by being given responsibility. (77)

It’s time that big city governments were allowed to take full responsibility for managing municipal issues as they wish, with all the risks and possibilities that entails.

"Although we also need interest rate cuts, there is legitimate doubt about how quickly lower rates from the Bank of Canada will translate into lower borrowing rates for consumers and businesses," Weir said. "In this context of financial uncertainty, direct public investment becomes even more important as a potential source of economic stimulus.

"Infrastructure investment would be a particularly effective type of stimulus because it would necessarily create employment in Canada," he added, noting the construction work would have to be done here and that many of the materials used in construction, such as concrete, would be produced here as well because it is impractical to import them.

The federation released poll results Tuesday that it said "shows Canadians overwhelmingly want the federal government to provide greater financial support to municipal governments."

"More than 90 per cent say the federal government should help municipal governments deal with infrastructure issues, a view shared across the country, including in Quebec and Alberta," the federation said.

The opposition Liberals also say the federal Conservative government should have spent most of last year's $10.2-billion budget surplus on upgrading the country's public infrastructure rather than paying down more debt.

Under the Liberal plan, any surplus greater than $3 billion -- which would be used for debt repayment if not needed for emergencies -- would be added to the $33 billion the government has already committed to infrastructure from 2007-2014.

While the author of the Statistics Canada report, economist Ryan Macdonald, said the study didn't attempt to measure whether there was a net benefit to government investment in infrastructure, it did stress the importance of such investment to the economy.

This week's meeting comes in the wake of last fall's fact-finding visit by the UN's Special Rapporteur on Adequate Housing, who called on the federal government to work with the provinces to implement and fund a comprehensive national housing strategy to meet the housing needs of Canadians.

Canada is the only major country that doesn't have a national housing strategy, the report notes.

The idea did not infuriate everyone. Opponents hiss that the newspaper editorial boards and many other media were in favour. But others, like ex-mayor David Crombie, also saw value in it.

Proponents viewed amalgamation as part of a normal evolution that reduced the Toronto area to 13 municipalities by 1953, six by 1967. Others suggested one big Toronto would provide a citywide equity of services otherwise missing.

The province's position was that huge savings would be exacted. But once the entire Harris plan was unveiled – amalgamation plus a huge download of social services and an end to transit funding – opposition was cemented.

The city talks of Queen's Park owing it $700 million to $1 billion. On the other hand, it got a $1 billion asset in Toronto Hydro, and the province took on $600 million in education costs.

What is irrefutable is that the city was set on a path to fiscal failure. Amalgamation was supposed to deliver three main benefits: savings, greater equity and more clout.

"Savings" were wrung from the system, all right: thousands of jobs cut in the first three years. But that wasn't sustainable. At the same time, more staff were hired for police and transit to cope with growth.

On equity, the megacity has been a big success, spreading the social safety net across the city. York, the poorest of the old municipalities, has benefited most.

But as an experiment in local democracy, merger has been a huge failure. The megacity's continued survival is a testament mainly to the efforts of a great civic workforce. Its creation was too hurried. Too much was heaped on its head.

What now? Do we de-amalgamate, as the school board is now pondering? A few diehards have always harboured such thoughts. But the former mayors and Metro chairs, except Prue, say going back is not an option. Better to have the province fix the fiscal mess by taking back social services costs and giving Toronto some breathing room.

Mayor David Miller has staked his own political survival on the province riding to the rescue.

These are the factors that are starting to drive businesses, employees and infrastructure to places such as Richmond, Surrey, Langley and Abbotsford. In the recent economic boom, jobs in Vancouver are growing at less than 2 per cent, compared with 10 per cent for Metro Vancouver's 21 municipalities. Combine all this with downturns in the export industry from the rising dollar, and it spells trouble for this growing city.

In the VEDC report, business and community leaders speak about a hollowing out, the prospect that Vancouver could be a bedroom community enjoyed by the wealthy, owned by absentee condo owners who prefer to do business elsewhere.

How will Vancouver keep businesses from voting with their feet, and taking their jobs and tax payments - and thus quality of life - with them?