On Friday, prime minister Justin
Trudeau meets with the Federation of Canadian Municipalities. A main
topic for discussion is sure to be about where the first round of the
$120 billion federal infrastructure grants will be spent over the
next decade.
Canada's municipalities all have long
lists of upgrades for existing roads and water lines, plus plans for
a lot of new building that has languished on the books for a lot of
years. All that's been missing is for either the provinces or the
feds to turn on the taps for funding. That's because municipalities
are restricted on how they can raise money to support the general
health of the places where the vast majority of Canadians live.
Which may lead you to wonder — as it
has occurred to most Canadian big-city mayors — why the other two
levels of government are so loathe to give up their taxation powers
and cede them to the cities where the people live, and where all
their public services are located.
This week, a pair of federal watchdogs
raised concerns that municipalities are not keeping up with their
reporting duties to the federal government, telling them where their
gas-tax refunds are going.
The federal Environment Commission
works through the Auditor General's Office and its commissioner,
Julie Gelfland, is complaining that Infrastructure Canada isn't
getting its data on the state of city infrastructure spending in a
timely way.
It's federal money, she says, so the
feds need to know how it's being spent.
I say this shouldn't be federal money
in the first place, and barring ensuring good accounting and the need
to keep good statistics, it shouldn't be any of their business.
Currently, the federal government
collects 10 cents on every litre of gasoline and four cents on every
litre of diesel fuel we buy. Plus GST (or HST in provinces where that
applies).
On the fuel tax alone, the take is
about $5 billion a year. Of that, $2 billion a year goes to Canada's
cities for infrastructure spending. As we all know, that's not nearly
enough to keep our current streets, water and sewer lines and public
transit in good repair across Canada, much less allow for growth.
In its first federal budget, the
Trudeau government announced an ambitious spending program for
municipalities of more than $120 billion over the next 10 years. But
at least one province — Quebec — is complaining that bureaucratic
delays have ensured that none of the money will be put into projects
this year.
It's not just cities not getting their
paperwork in order, it's the federal civil service dragging its
heels, sending projects back to Square One with a variety of new
conditions for cities to meet the needs of the program. At least from
Quebec's perspective.
I say the feds should get out of the
city-building business altogether.
Getting a program as big as this online
in a year is pretty well impossible for a government. Especially a
government facing deadlines to pass laws governing doctor-assisted
deaths. Oh, and completely overhauling the electoral system in the
meanwhile. Throw in Senate reform, if there's not enough else to
do.
If we're going to lose a year getting
the economic benefits of stimulus spending on much-needed city
projects, far better to spend that year negotiating a transfer of
taxation powers so that cities can plan their own futures with their
own revenues.
If that power is to become (at least
partially) fuel taxes, so be it. Anything's better than taxing the
real estate value of our homes.
Right now, Vancouver, Victoria and
Montreal have a city tax on fuel. In Vancouver, it's a whopping 11
cents a litre. No wonder the buses are so crowded. No wonder the
routes are at five-minute intervals.
If we're afraid that allowing cities
access to $5 billion more a year in tax revenue could lead to
corruption, well, that fear has already been raised in the federal
sphere with the rushed-forward stimulus spending plan. For their
part, provincial governments have been no strangers to
envelope-passing and bid-rigging on public contracts, either.
We'll need safeguards, and full
reporting on spending could be part of that. If anything, the federal
government is far better placed to be a watchdog than a sugar daddy.
Especially if it's not their money the government is watching. Which
it shouldn't be.
Canada isn't a small-town country
anymore. We have cities with larger populations than some of our
provinces. Mayors get more votes than premiers in some places.
So mayors — whose jurisdictions
manage the delivery of all our tax-paid services — need the ability
to do long-term planning, based on predictable budgets, not the
largesse of federal election promises.
Time for the feds to give up the fuel
tax, and cede that power to the cities where people pay them.
Follow Greg Neiman's blog at
Readersadvocate.blogspot.ca
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