TORONTO - Toronto, the city the rest of Canada loves to hate, has fallen on hard times according to its leaders and while that might stir schadenfreude in some, experts warn ignoring the plight of urban economic engines can put the country in financial peril.

And for those who think big cities are immune to economic ruin, New York City's near declaration of bankruptcy in the mid-1970s should be a sober lesson.

In fact, Toronto's mayor is looking at the Big Apple's multitude of taxation powers -- drawn on after its near collapse in 1975 -- with envy as Canada's largest city faces service cuts to public transit, among other things, in the face of a budget shortfall.

Cities across Canada are plagued by similar financial squeezes -- yet the financial health of the country depends on the strength of urban economies, said Glenn Miller of the Canadian Urban Institute.

"It is true that the large urban regions are the engines of growth, that's fairly well accepted now. Our problem, as a country, is that we don't have very many," said Miller.

"People who say, Toronto -- they deserve what they get, it's really cutting off your nose to spite your face."

While the sheer size of Toronto, and the multitude of social programs downloaded on to the city by the Ontario government, presents unique funding challenges, its financial woes are similar to other large Canadian municipalities in at least one respect.

"It relates to the fact that their principle source of revenue comes from the property tax," said Miller, who added crumbling infrastructure is a pressing issue for many cities where bridges, roads and sewers are well past their "best before date."

Last week, the Quebec government banned heavy trucks from more than 100 bridges and overpasses across the province, saying they needed immediate inspection. The announcement coincided with the final day of testimony at an inquiry into the deadly overpass collapse near Montreal.

The ability of cities to maintain and improve infrastructure is key to the nation's economy, said Gord Steeves, president of the Canadian Federation of Municipalities.

"Regrettably, we've already seem some circumstances of infrastructure failure... I actually do worry, at some point you might see more of these things happening because cities are having a tough time keeping up with replacement," said Steeves, who declined to discuss specific incidents.

"The economic result of something like that would be nothing short of catastrophic."

Including municipalities in so-called growth taxes, like the GST, is among the measures Steeves said must be considered.

In Toronto, Mayor David Miller wants to expand the city's tax base beyond just property. A vote to bring in a municipal land transfer tax, like the one paid to the province when buying a home, was deferred last week.

"If you look at New York City today... they tax corporate income, personal income, they tax property, land transactions, all sorts of things," said the mayor.

"The City of Toronto, on the other hand, has property tax... What that means, in practical terms, the economy is pretty good in Toronto, but the city doesn't get any share out of the economic growth."

The mayor is spearheading a campaign to wrest one cent of every six cents collected in GST from federal coffers - something the federation is considering adopting as policy.

In the years leading up to New York City's near economic collapse during the recession of the 70s, its taxation system was dominated by property tax.

Since 1975, the city has increasingly leaned on growth taxes, including personal and corporate income tax, to fund its operations.

While the Canadian Urban Institute didn't forecast a disaster scenario for Canadian cities on par with New York's, Glenn Miller did say "we should look over our shoulder."

"Look what happened to Buffalo, to Detroit. Cities do decline, the key word is resilience," he said.

"A city's public realm is really the backdrop for private sector investment. The quality, the reputation of a city is very dependent on all of the things in all of those intangibles."

Three decades ago, New York was "back on its heels," Glenn Miller said.

"We don't want to get to that stage."