Policy
May 7, 2012

Strong communities: A long-term bargain for cities

When the global economic crisis hit, the federal government called on municipalities to turn its stimulus plan into action, creating thousands of jobs and repairing the country’s aging roads, bridges, water systems and community centres. These investments will leave a legacy of stronger communities, and a new model for meeting our most pressing national challenges.

As we continue our economic recovery, Canada needs to establish a more secure economic future supported by safe, strong and sustainable communities. No government can achieve this on its own. All orders of government must work together, tear down the silos standing in the way of delivering results, and reform the antiquated funding tools and intergovernmental relationships that have held municipalities back for too long.

In the last few years, the federal government has helped repair some of the worst damage done by decades of downloading and under-investment in municipalities by investing billions of dollars in local roads, water systems, public transit and affordable housing. And through new programs like the permanent Gas Tax Fund (GTF) the government has moved away from the short-term, ad-hoc infrastructure funding models of the past.

Despite these gains, municipalities still lack the funding tools to support the national economy and meet Canadians’ needs. Municipalities collect just eight cents of every tax dollar paid in Canada. Meanwhile, they build more than one-half of the country’s core infrastructure and pay the salaries of two out of three police officers as well as downloaded responsibilities for social services, immigrant settlement and law enforcement.

This fiscal imbalance places a growing burden on property taxpayers, strains local services and forces municipalities to defer essential infrastructure repairs. As a result, Canada’s municipal infrastructure deficit – which stood at $123 billion in 2007 – continues to grow. Canadians experience this problem each day, in the form of crumbling roads, traffic congestion and boil water advisories.

Moreover, rising housing prices and rental shortages are making it difficult for cities to attract the workers they need to support the economy. At the same time, aging social housing units are leaving many single-parent families, low-income seniors, and new immigrants struggling to find adequate shelter. More than four million Canadians cannot find housing they can afford to pay for on their current household salaries. At last count, there were 175,000 families across the country on waiting lists for social housing. As well, there were four cities each of which had more than 10,000 on local waiting lists. More than 40,000 Canadians sleep in emergency shelters every night, including families with children.

To address these issues, we must:

Give municipalities the tools to support economic growth: Municipalities do not have access to revenues that keep pace with their growing populations and economies. Until they do, Canada’s infrastructure and local services will always lag behind the needs of businesses, workers and families.

Put recent gains on a long-term track: Canadians do not want to relive the 1990s, when other governments pushed their budget deficits onto the backs of municipalities by cutting transfers and downloading responsibilities. The federal government must extend investments in cities and communities within its long-term fiscal framework.

Expand intergovernmental partnerships: Too often, governments work separately when cooperation is required. This leads to confusion and waste. Elected government must work to build communities and drive the economy.

Deliver the best value to taxpayers: Set measurable targets for every dollar invested, and report back to Canadians on the results. Build on federal infrastructure program reforms to cut red tape, streamline approvals and eliminate duplication among different orders of government.

Get the private sector involved: Save taxpayer dollars by engaging the private sector. Start by reducing barriers to building new rental housing, introducing employer-provided transit passes and building municipal capacity to undertake P3s.

Municipalities were once viewed as the junior partners of confederation. Today they are on the frontline of our most important social, economic and environmental issues. As the federal election comes to an end, all parties elected to the House of Commons must commit to working with municipalities to build communities that will drive our economy and protect our quality of life for years to come.

To compete globally and protect that quality of life, we need cities and communities that are innovation and investment hubs, with the infrastructure and services to support growing businesses and working families. Municipalities cannot do it all on their own. All orders of government must work together.

 

Hans Cunningham is president of the Federation of Canadian Municipalities.

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