Cities need stable funding, not one-off spending sprees
With access to little more than property taxes, cities are the paupers of Canadian federalism.
Thestar.com
Jan. 24, 2016
By Christopher Hume
Except for the dead, being “shovel ready” is a relative concept. For the federal government, the term refers to projects on which it hopes to spend its stimulative billions immediately. What that means, of course, is that from Ottawa's perspective, the spending of federal money is more important than what it's spent on. The stated purpose of the exercise is to boost the economy; building, or repairing, the infrastructure is a happy byproduct of the process.
That's fine as far as it goes; but Canada's infrastructure deficit won't go away until it becomes the end not the means. The national government's role will be crucial. That has been the case since the construction of the transcontinental railroad in the 19th century.
And although cities are officially “creatures” of the provinces, without Ottawa's financial resources, they cannot undertake such large projects. This is important because most of the country's infrastructure involves cities. They are where most Canadians live and where the lack of infrastructure is most keenly felt.
Even so, their economic clout is limited. With access to little more than property taxes, cities are the paupers of Canadian federalism. Clearly, the country's founders never envisioned the urban nation that is Canada today.
This fundamental imbalance is the subject of much of the discussion now taking place in cities across the country. That's why mayors are finding new strength in numbers. When 82 Montreal-area municipalities joined forces recently to fight the proposed Energy East pipeline, they could not be ignored. Their legislative powers may be limited, but who would dismiss municipal leaders who represent 3.9 million people, nearly half of Quebec's population? By contrast, one of their most vocal critics, Saskatchewan Premier Brad Wall, speaks on behalf of that province's 1.1 million residents.
Even internationally, Canadian chief magistrates are out and about. Who was surprised to see “Canada's mayor,” Calgary's Naheed Nenshi, sharing the spotlight with Prime Minister Justin Trudeau at the World Economic Forum, the annual one-percenter blowout in Davos, Switzerland?
These may be the people who have the money, but they don't like to spend it, not even on the taxes that so burden the rest of us, the hard-toiling 99 per cent.
Which brings us back to that infrastructure we hear so much about. The endless debate about “revenue tools” is symptomatic of a cash-starved public sector. The best way to help Canada's beleaguered cities is to provide stable long-term funding, not to set off a mad scramble for projects ready to go at a moment's notice.
The most worthy projects aren't necessarily the most politically expedient. Even with the best intentions, the federal government is unlikely to achieve its secondary goal of infrastructural adequacy through such roundabout means.
Even if Ottawa's objective were economic stimulation, the criteria would be different. The most desirable projects would be those that promote long-term growth, not just those that lead to short-term jobs.
At the same time, one understands Ottawa's reluctance to sit and wait while cities like Toronto take forever to make up their mind. Also worrisome is the cities' willingness to spend other governments' money as if it came from somewhere else.
The answer is to give cities the powers they need to raise the money they need. That means a portion of the HST as well as income tax. Only then will cities cease to be Canada's junior partners. Only then will they grow up, though they'd rather not.
Look no further than Rob Ford.
Until then - and no one's holding his breath - cities have little choice but to wait for the next stimulus package and hope for the best.
