Give local governments more spending power: Yahoo-Leger poll
Municipalities provide the services constituents can actually see
Should municipalities be given more discretionary powers with regard to spending provincial and federal dollars in their own communities?
According to a new Leger survey commissioned by Yahoo Canada, 51 per cent of Canadians believe city governments should be making their own decisions regarding priorities on how to spend taxpayer dollars. Only 27 per cent of those surveyed think federal and provincial governments should have more oversight.
The results are music to the ears of Canada’s big-city mayors and councillors who have been fighting that battle for many years.
“I agree with the majority of Canadians that municipalities in Canada should be able to make their own decisions about how to spend the dollars that are either transferred or granted to them by provincial/territorial governments, or the federal government,” newly-minted Edmonton Mayor Don Iveson told Yahoo Canada News.
“In Edmonton, funding from other orders of government has not always been consistent with our city's priorities as defined by city council, which affects longer-term infrastructure planning.
“The ability of municipal governments to be able to choose their own capital investment priorities is particularly true in light of the infrastructure deficit we are facing in municipalities across Canada.”
Nationally, according to the Federation of Canadian Municipalities, Canadian cities have an existing infrastructure deficit of $171 billion and new infrastructure gap of at least $113 billion. The immediate needs include upgrades to roads and bridges ($91.1 billion), waste management systems ($39 billion) and wastewater and storm water systems ($15.8 billion).
And unlike other levels of government, municipalities don’t have extensive taxing powers and aren’t permitted to run deficits on their operating budgets. As a result, they don’t have the resources to upgrade existing infrastructure or to build new assets in order keep up with the population influxes.
So, not only do they want more money and a bigger say on how that money is spent, city governments also want access to new revenue sources.
“There are a couple of critical issues with respect to municipal taxing powers in Canada,” Iveson said.
“The first is that property tax, which most municipalities must rely on so heavily, is a regressive tax that isn't nimble enough to respond to changes in the economy or personal circumstances.
“Second, municipalities, on average, are working with only 8 cents on every tax dollar collected. This means that the distribution of the tax dollars we are already collecting, particularly as compared to the broad range of services our citizens expect from us, is disproportionate at best.”
Dr. Cheryl Collier, a political science professor at the University of Windsor, says that in recent years municipal governments have actually been getting some more powers.
"Most provinces have gone toward greater devolution of spending and even taxation power over the past few years and municipalities have greater say in decision-making and spending money than they ever have in the past," she told Yahoo.
"The city of Toronto actually has the greatest abilities in these areas (due to its size) although they haven't been as quick to take advantage of all of these."
Obviously the big-city mayors want the provinces to go further. Last month, Iveson and Calgary Mayor Naheed Nenshi met with Alberta Premier Alison Redford about new city charters, which would give the cities more taxing and spending authority.
But there are some who are urging caution.
"If taxpayers understood how poorly many municipalities managed their money, they would overwhelmingly argue for more controls, not less," Jordan Bateman of the Canadian Taxpayers Federation told Yahoo.
"If taxpayers understood how poorly many municipalities managed their money, they would overwhelmingly argue for more controls, not less.
— Jordan Bateman, Canadian Taxpayers Federation
Mike Klassen of the Canadian Federation of Independent Business suggests municipalities haven't proven that they can handle more responsibility and says they need more provincial/federal oversight, not less.
"Municipalities continuously claim they are underfunded, but few of them are actively aiming to reign in their spending to the rate of inflation," he said.
Earlier this year, the CFIB released a report titled The Big City Spenders:
Spending by Canada’s three largest cities – Toronto, Montreal and Vancouver – has grown by 3 to 8 times the rate of population growth over the past 12 years.
The increases in spending are largely driven by public sector wages and benefits which consume between 52 to 67 per cent of local government operating spending in the three big cities.
The conversation needs to include a discussion about budgetary and financial transparency and accountability.
Fiscal performance aside, David Seymour, a municipal affairs expert and senior fellow at the Manning Institute suggests that municipal governments in Canada are just not constitutionally set-up for more powers.
"Their basic set up was designed for small prairie towns 100 years ago. They do not have the same traditions, conventions, and restraints that parliament and the legislatures do," he said in an email.
"The main problem with municipalities having more taxing powers is that it becomes more difficult for voters to monitor the costs of government. Already it is difficult for any individual to calculate the true cost of government, there is income and sales tax, then company taxes employers pay, then property and excise taxes. More taxes will reduce transparency even further.
"The danger is a worst of all worlds where multiple levels of government are responsible for a single task and nobody is accountable."
