This was an archived interview that was done while Mr. Rossini was still CFO at the City of Toronto, in the summer of 2017.
As I walked into the famous 7th floor at City Hall, I was greeted by Rob Rossini’s incredibly friendly assistant Tiffany. She talked with me briefly while Rob finished a conversation with someone that just snuck in to get a minute of his time, something that happens very often according to Tiffany. I wasn’t particularly surprised by this. Rob’s reputation as an honest and hard-working public servant precedes him. Having about 32 years of experience, he has taken the reigns on the finances for a number of municipal and regional governments, with his latest role being the Deputy City Manager & CFO at the City of Toronto. His experience has given him the ability to face the toughest of decisions, sometimes on a daily basis. Anyone that knows Rob has no doubts about his talents as a finance chief, but it is his sense of humor and ability to make you comfortable that separates him from his peers. As his quick conversation finished, and I was welcomed into the room, it was exactly that characteristic that made the first impression.
After quickly chatting about my day, some discussion about Project20, and a number of well-placed compliments from the Chief Financial Officer of the City, we moved into the question portion of our time together. To provide the most depth, our interview covered a number of points, some being global economics questions, and others being specific to the City of Toronto. As per usual, the following answers provide a paraphrasing of Rob’s answers, and are not to be taken as direct quotes.
TN: The recent decrease in natural-resource prices has had a disproportional impact on Canada’s economy compared to some other developed economies. Do you think this is yet another sign that we need to diversify our economy away from natural resources, and is this a problem in the City of Toronto?
That’s the age-old question that has been facing Canadian economists for as long as I can remember. We have been talking about diversifying our economy for quite a long time, and since you are still asking the question now, have clearly have more progress to make on that front. Since this is not a new problem, it is a common belief that the Canadian Dollar will not rise until the price of oil does the same. That's the reality of being a petro-currency. In Toronto, we do not have to deal with this particular problem, and that is because we have a much different basis for our economy here. We have the financial and business services sector, real estate, construction and recently an emphasis on IT, “start-ups” and entrepreneurship.
TN: Specific to the City of Toronto, you know better than anyone else the major capital requirements needed for infrastructure and programs in a major city like this. Should government work towards a model that includes private ownership?
The City of Toronto currently has about a $30 billion capital shortfall. Before we begin talking about public-private partnerships, it is important for our Council to prioritize what we spend money on. We cannot afford it all. In terms of including the Private sector, I think we have to understand that there is a “want” within Council to keep certain things public and not transferring them to the private sector. However, is there benefit in looking at different delivery strategies, such as Alternative Financing & Procurement (AFP)? Absolutely. That said, this cannot be a blanket-like thing that covers all projects. It will only work if it is a case-by-case analysis where each and every proposal is analyzed and tested to see if it would provide greater benefit under a delivery of that sort.
TN: Before we move forward, there has recently been talk about the City of Toronto investing in less traditional sources. Any comment
There was a legislation change in 2016 that gave the City “Prudent Investor powers”, meaning that we are allowed to invest in anything that prudent investor or trust-fund would invest in. Before that can happen, an Investment Board needs to be set up, and Council needs to decide on an Investment Policy, which is a question that will be posed in the upcoming Council meetings. This is a bold new area for the City of Toronto, and there shouldn’t be an expectation of a sudden change in earnings. It will most definitely be a “Crawl - Walk - Run”, cautious approach when it comes to these new powers.
It will most definitely be a “Crawl - Walk - Run”, cautious approach when it comes to these new powers.
TN: We cannot have an interview with you without asking about housing. I am sure you have heard every possible question asked on this, and so I will simply ask: What are your thoughts?
Ah, the question that everyone wants answers to. The one thing that no one wants to be doing is being the one standing next to the balloon with a needle. Well, as you know, the Province recently released 16 measures related to the issue. From a CFOs perspective, the way that the market will react does not have an impact on our property tax revenue as the calculation is not directly affected by these changes in price. However, one particular, and rather important area where the City is vulnerable to sudden changes in the market is in the Municipal Land Transfer Tax. For example, a 20% reduction in the MLTT would be a $140 million hit in terms of tax revenues. That is a difficult issue for a CFO to deal with, especially if it comes mid-year. That said, affordability is a problem. The province has granted the City of Toronto with the power to apply a vacant-homes tax, and it is something that is being analyzed now. In addition, there are a number of efforts in place to carefully monitor the issue.
That is my answer as a CFO. However, as a father, I am worried about this. I have kids that are going to start looking at the market very soon, and will want to take the same steps that I took when I was a young adult all those years ago. Frankly, the conditions and prices that I faced back then are very different than the ones they face today. It’s a scary thing to think about as a father.
However, as a father, I am worried about this. I have kids that are going to start looking at the market very soon, and will want to take the same steps that I took when I was a young adult all those years ago.
TN: Going off of that, what about the current interest rates. Do you think they are sustainable?
Frankly, as long as inflation is under control, it is likely that we are in a longer term period of sustained low interest rates. That said, especially with the housing situation, a small change will have a major impact. Will rates increase? It’s possible that that is the case, and maybe by a magnitude of 1% to 2%. However, it won’t be the type of increase that brings us to the same levels as in the 80s.
TN: Now for some more fun questions. What is your favorite sports team? The Jays? The Leafs?
A lot of people will be unhappy about this, but I am a Montreal Canadiens fan. That, and a Hamilton Tiger cats fan. Have to stay true to my home roots! All that said, there is quite a bit of excitement surrounding the Leafs. There is a lot of young, exciting potential there!
TN: Last question, if you could give any advice to 20-year old Rob, what would that be?
Firstly, and most importantly, you have to do what makes you happy. You need to do work that you are passionate about, and you need to put your heart and soul into it. However, as I tell my kids, eventually, happy has to make a living. Secondly, you can’t get enough education in today’s economy. A four year degree is simply not enough anymore, and you need to work towards a designation, grad school, etc. This is just so you can distinguish yourself from everyone else in this flooded market! Lastly, and 25-year old Rob was likely already aware of this, don’t be afraid of change! Oh, sorry, one last thing - don’t forget the public sector. It’s not sexy like working for the private sector, but you do rewarding work that has a clear and tangible impact. There’s few things better than this in life.
You need to do work that you are passionate about, and you need to put your heart and soul into it.