Policy
May 7, 2012

Teetering on the tipping point

Policymakers agree that municipalities are critical to Canada’s future prosperity and sustainability. Brock Carlton, Chief Executive Officer of the Federation of Canadian Municipalities (FCM), sat down with Editor-in-Chief Toby Fyfe to discuss what must happen if Canadian municipalities are to succeed.
 
 
There seems to be broad agreement that urban areas will drive a prosperous Canada and yet, as a country, we seem to have trouble getting there. Why do you think this is?
 
Part of the problem is that I don’t think municipalities are understood to be real partners by the federal and provincial governments. There are some pretty fundamental issues around prosperity and the future of Canada that require federal, provincial and municipal engagement in planning, strategy development and targeting resources.
 
Having said that, I do think there are examples where the country has come together around specific issues and where the federal, provincial and municipal governments have worked together respecting jurisdictions, but with true and clear national objectives. One can think of the recent stimulus package where the federal government took a leadership role and made a decision that the municipalities were a critical player in helping the country manage through this recession. It’s worked pretty well.
 
If there doesn’t appear to be an understanding of the role that municipalities play, at the end of the day what would you like to see?
 
I think what is required is a stronger sense of leadership from the federal government that recognizes that, in a country where we are aiming for environmental sustainability, economic prosperity, social cohesion and cultural development, all three orders of government are essential. 

Is it just a matter of money?
 
No, it’s not just a matter of money. Money is clearly an issue but a big part is about getting the right players around the table and coalescing around a long-term vision. Regarding money, we’ve made a lot of progress with this government and with the previous Liberal government, particularly under Paul Martin, toward programming that addresses some of the issues and challenges that municipalities and communities are facing. But one of the big challenges we face is that these are mostly short-term programs that are application-based and therefore not strategic or part of a long-term plan. The exception is the Gas Tax Transfer, which is $2 billion a year in perpetuity and isn’t tagged to a particular program. While all these programs are really important and are getting better in their design, they’re short-term and highly responsive.  
 
The corollary of that would be that if you’re following a responsive approach there’ll be winners and losers because some municipalities will be better able to apply and qualify.  
 
Exactly. Think of any of these infrastructure programs. You’ve got to get all your documentation in order, you’ve got to apply, and then you wait at home. You can’t put a shovel in the ground until everything is signed off. With the gas tax, the revenue is predictable. Every municipality in this country knows what their gas tax revenue is this year, what it was last year, what it’s going to be next year and the year after. It’s also bankable, so they can go to a lender and say: “We’ve got this capital project that we need to do and we need to borrow X dollars and here’s our capital, it’s the gas tax over the next five years. We’re going to get this much money so we have the resources to service the loan.” But if you’ve got a project-based or application-based program, you don’t even have that – you can’t bank it in any way. 
 
Richard Florida argues that cities need to attract the right kind of people to become prosperous. What does that statement mean to you?
 
It’s interesting because he’s talking about the fact that people need to choose places to live where they can fulfill their sense of purpose. So if you flip that around, I think what he’s saying is that municipalities need to better understand what their unique features are, what their unique competitive advantage is, within the Canadian political economy so they can then tailor some of their programs to attract the kind of people that match the vision and purpose of that municipality. 

Municipalities do this. They do develop strategic plans and long-term visions that set a direction for a community that then define where that community wants to go and the kinds of people it needs to move it in that direction. Clearly, there’s a fundamental, basic level of services, of quality of life that any viable municipality needs to be able to provide.
 
Our immigration population is going to grow by leaps and bounds and it will probably be concentrated in the cities. How should municipalities respond?
 
It’s an important question. Some of our members have done research on what it is that immigrants are looking for when they come into a community and the key issues are housing, employment, language instruction and access to basic services. Most of these issues are not exclusively municipal. Housing, for example, varies across the country, and municipalities have a role to play in accessible and affordable housing. But they’re not alone; the province is there as well. Unemployment is obviously a mix of stakeholders and actors. Then you look at access to basic services and there are some things that are municipal – transit, access to recreational facilities, access to libraries, for example. These are important services and indicators of local quality of life that are generally under municipal jurisdiction.  
 
But we have to be really clear that municipalities can’t solve this alone. It really does require federal, provincial and municipal effort to make our cities and towns better places for immigrants to settle and enables our economy to take advantage of the skill sets that come into those communities.  
 
We know 75 percent of immigrants come to Toronto, Vancouver and Montreal, but then you’ve got small places like Winkler, Manitoba that are trying to attract immigrants to settle there. They’re trying to link immigration to family relationships and the local economy so immigrants who come to Winkler have a pretty good sense they’re going to have a reasonable quality of life and access to employment fairly quickly. There are programs around the country that municipalities are using to attract immigrants, recognizing they will revitalize their labour force.
 
The FCM argues that cities and communities are at a tipping point. What do you mean?
 
There is a tipping point in a couple ways. In 2007 we did a study of what we call the municipal infrastructure deficit and we estimate that to be about $123 billion. If you think of the importance of infrastructure for the economic foundation of the country, environmental sustainability and social cohesion, that infrastructure is not in good shape. We’re not saying fix it in five years, but if we don’t do something it will continue to deteriorate and it will undermine the economic and environmental viability of the country. That’s part of the tipping point.  
 

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