Future Infrastructure needs funding growth

NRU
Feb. 3, 2016
Leah Wong

With more than 13-million people expected to move into the region by 2041, Greater
Golden Horseshoe municipalities need to have a hard discussion about infrastructure funding.

“We’re going to be dealing with a different magnitude of growth,” former Toronto chief planner Paul Bedford told participants of the Cities of Tomorrow conference Tuesday. “We’re going to need more of absolutely everything.”

Given the influx of new residents expected, municipalities will need more transit, more affordable housing, more social services and more hard infrastructure. While incoming growth will fund some of these needs through development charges, municipalities will need to expand their budgets to build, maintain and operate infrastructure and services.

IBI Group Canada East deputy regional director Audrey Jacob told participants that while the onus and responsibility for infrastructure investments presently lies with the municipalities, she feels the province will need to get more involved. She said further provincial investment will help municipalities meet service standards imposed by the province.

In addition to seeking more funding from higher levels of government, municipalities may need to look beyond existing models of funding for services and capital projects. Jacobs suggested that both property taxes and user fees are underutilized in many municipalities. However, many municipal leaders have been hesitant to increase property taxes so there may need to be a serious discussion about alternative revenue tools.

Jacobs said increasing the amount of gas tax revenue municipalities receive and allocating money from the existing sales tax are two ways senior levels of government could invest further.

“This would be appropriate as both the federal and provincial governments benefit from the growth [in municipalities],” said Jacobs.

While he sees no silver bullet for the funding challenges, Bedford suggests it is important to think about equity when considering new revenue tools. He is supportive of road tolls, municipal sales taxes and municipal income taxes, but recognizes that each targets the population differently. He considers income taxes to be the most equitable as they are applied to the broader population and are paid for on a sliding scale based on income.

The challenge for municipal leaders is selling the need of new revenue tools to residents. Bedford suggests winning hearts and minds and getting personal is the way to do it.

He said if politicians outlined the choices for increasing funding alongside the consequences of doing nothing it would better demonstrate to residents that improved infrastructure will not come without broad investment.