I don't have the answer - and I notice that you don't really offer one - but I know that the answer is not to throw out all our laws in a short-sighted imitation of some polluted Chinese metropolis.
Not really. See Edward Glaeser's The Triumph of the City, Matt Yglesias's The Rent is Too Damn High, and Ryan Avent's The Gated City for more; pay particularly close attention to the sections about how urban life tends to be far more sustainable than alternatives.
As all four books point out, there's basically no intellectual case to be made in favor of low height limits, strict parking requirements, and lot setbacks in urban or heavily urbanizing places. The only "case", such as it is, comes from NIMBYism and existing landlords or landowners who are seeking to nominally protect their perceived investment.
But all that's not the same thing as adding skyscrapers today's mid-Peninsula. Most of these responses are coming from an idealistic blank-sheet mindset. In the real world, we don't have the option to start from scratch.
I left Montreal to go to "30 year recession" Japan and the difference is night and day. I don't believe in the future of Japan, but I am even more skeptical of Quebec's. Bringing it up as a success story makes me doubt your comment, eventhough I strongly want to believe what you said.
It may be falling down and overrun with student protesters but at least it is not the never ending soulless sprawl that is Toronto.
If the government cannot confront organized crime and its parasitic presence in its construction requisition system, it is basically engaging in selective budgetary restraint - which means it doesn't believe it "really" has to engage in budgetary restraint. Mind you, the budget problems are real - but attacking soft, weak targets means the gov't doesn't believe it.
It is easier to ask for sacrifice when you are seen as having tried to avoid it. That didn't happen. Now we see the inevitable outcome, and the media spin on it is shameful.
My personal belief is that Jean Charest's administration will be remembered akin to Nero's, except that JC's administration will actually deserve the dishonour.
"Le déclin inexorable de la ville de Montréal
C'est pas ma faute
C'est la faute du fédéral!"
The problem is far from being solved. However, it's true that the pollution per inhabitant is much lower than in the Silicon Valley.
I also know it can be much better.
You had poor people living in rookeries and tenements up against the wall of the smoke and pollution belching dark satanic mills. So philanthropic reforming politicians introduced zoning laws to separate industry and housing and move all the people out to fresh air of the suburbs.
100 years later it's not too much of an issue to have your air-conditioned condo tower in the same zip code as your air conditioned office tower - but the rules still apply.
The downtown core here is ringed with self-store, car lots, freight terminals and other low rent low density industry. While the area around every suburban transit station is ringed by condo towers.
But you can't build in the industrial zone around downtown because of planning rules and taxes. Amazingly you pay 20% tax to build on a brown field site and nothing to bulldoze trees in the suburbs.
For water, the problem is the same.
More to your point, dense cities can be much more sustainable than suburbs. Money spent on infrastructure benefits more people. People living in apartment buildings use less energy for heating and cooling. Commuting doesn't necessarily require a car so you use less fossil fuels.