October 27, 2011

Column | Korky Koroluk

Cities still need a better funding deal

The construction industry welcomed the move by the federal government to guarantee an annual transfer of money from the Gas Tax Fund to Canadian municipalities.

The money is to be used for infrastructure, and it’s sorely needed. There isn’t a municipality in the country that isn’t strapped for cash, and cities, in particular, are looking for money to build roads and bridges, public transit systems, water and waste facilities, just about everything that comes under the broad heading of infrastructure.

Many city folks are fed up with long commute times, and for good reason. We think of some of the world’s largest cities, including New York, Los Angles and London as having chaotic traffic jams every day, but commuters in Toronto and Montreal often take longer to get to work.

That’s according to the Federation of Canadian Municipalities, which has asked Ottawa to help commuters on their way to work through a long-term infrastructure spending program that includes targets for performance.

We had a burst of stimulus spending to help lift the country out of recession, but now the government is turning to deficit reduction, and doing it at a time when much of the rest of the world really isn’t doing very well economically.

Still, some economists have been telling us that infrastructure spending is one of the best investments for countries looking for stable, long-term growth.

The guarantee of stable funding from the feds is nice to have, but it alone is not nearly enough. Because, you see, the problem with our infrastructure deficit is not a federal problem. It’s a provincial problem.

In Canada, our cities are creatures of the provinces, as provincial politicians are fond of reminding city mayors. Cities depend on property taxes for the core of their financing, with various payments and allowances coming from the provincial government from time to time as provinces share some of the burden for essential services.

But it’s not enough. It hasn’t been enough for years, which is why the cities’ cry for help sounds so much like an echo chamber.

Let me quote from a letter published recently, from Berry Vrbanovic, president of the FCM: The average commuter, he wrote, spends 32 working days sitting in traffic every year, at a cost to the Canadian economy of $5 billion a year. That drag on our economy needs to be fixed, but Canadian cities don’t have the tools for the job.

“Municipalities collect just eight cents of every tax dollar paid in Canada,” he wrote, “but pay for half of all infrastructure . . . .” On top of that, they pay for other things, including two-thirds of police costs, plus public housing, paramedical services and other things.

Massimo Bergamini, an Ottawa based public-affairs expert, worked as a public servant, and for the FCM, before forming his own public-affairs consulting firm. In a recently published essay, he noted that 80 per cent of our population now lives in urban areas. And if those areas are struggling under the financial load imposed on them, the whole country struggles.

So, he argues, the cities need to stop focusing only on federal spending. They need to “change their song sheet and strategy,” he says. “What cities need most from Ottawa now is leadership.”

The nation’s mayors need to push for a national vision for urban Canada.

He acknowledges that Ottawa can’t simply barge into an area of provincial jurisdiction, but it could “lead a collaborative, intergovernmental process to define what our cities should look like in 25 years.”

For the sake of the country, our cities need a new, better deal. The old system is broken. Fixing it will require leadership from Ottawa. But legislation to frame that better deal can only come from the provinces.

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@dailycommercialnews.com

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