Why Cities Matter


What is the most important issue of this election? Simple: cities. If the next government does not come forward with a new deal for cities which enables them to pay for the services they require, that government will have doomed Canada to failure.

Municipal interest trumps everything, including a functioning military, including a national health care system, but possibly excluding a strong education system. The overwhelming majority of our nation's business is conducted in our cities. If our streets are crumbling and gridlocked, if too many people are unable to find shelter, if we can't deliver goods, if we can't promise safety, if international investors turn away in disgust over our litter, if we are unable to live and do business, then nothing else will matter. Businesses will close. Our economy will grind to a halt and no level of taxation will be sufficient to pay for a functioning military or an effective health care system.

While our senior levels of government have coped with such big issues as health care, education and military spending, the oil that keeps our economy moving has been carefully and effectively maintained by our municipalities, most of them acting without our notice. But as the deficit problems of the eighties and the nineties were solved by shoving the costs onto the level of government immediately below, our cities find themselves without the power or the tools to keep the process working.

This must be reversed. We have to acknowledge that our cities have been saddled with responsibilities they are not equipped to handle. Is homelessness and social security a municipal issue, or is it a national problem? If the latter, what is the responsibility for paying for it doing on the property tax rolls? And as for property taxes, there is no more limiting and regressive system of taxation in this country. Property taxes and development charges punish those on fixed incomes and directly encourage urban sprawl by favouring the development of undeveloped land over reinvestment in aging infrastructure. This leads to increased congestion on our roads, and further strangulation of our economy.

Responding to the cities' growing understanding of the nature of their problem, Paul Martin has talked a good game about the need for a new deal for municipalities. He has talked about federal funding of infrastructure, a national strategy to help the homeless, and more. He has delivered far less. Rebates on the GST and vague promises are hopeful, but if things don't go beyond that, his contribution to the future of Canada will be next to nil.

Stephen Harper doesn't address the issue of municipalities at all, preferring instead to throw the matter back to the provinces with tax transfers. Constitutionally, some of his arguments are sound. The British North America Act and the Constitution Act both place the responsibility of urban affairs in the hands of Canada's provinces. If Mike Harris of Ontario had done his job and funded the Toronto Transit Commission properly instead of pursuing tax cuts during his time in office, there'd be little need for Paul Martin to step in and help. But knocking the ball back in the provinces' court does little to help our ailing cities; rather, it prolongs the game that got us into this mess in the first place. It makes the future of our cities dependent upon governments which have, in the past, deferred responsibility.

Our municipal councils know the challenges ahead, and they know the limitations of their resources. If the provinces and the federal government refuse to take major responsibilities such as social services and housing out of the municipalities' hands, then it is time for the provinces and the federal government to give the municipalities the power to raise the funds required to pay for these responsibilities. It is time for the tax structure of our cities to be reworked so that the system no longer encourages urban sprawl and no longer punishes the most vulnerable of our citizens. Replacing property taxes and development charges with income and sales taxes would be a start. Letting the municipalities set their own rates would be even better.

The deficits of the eighties and the nineties may have been beaten at the federal and provincial levels, but they remain in place in areas where the accountants can't reach. Even Waterloo Region, one of the economically healthiest urban areas of Canada, is spending half of what it should to maintain roads and sewers over the next fifty years because to pay the full amount would place too much of a burden on middle class Waterloo Regional taxpayers. If nothing is done, the infrastructure deficit will join the baby boomer retirement as the great challenge of the next two decades. If left unaddressed, it could seriously compromise our federal and provincial governments' ability to operate.

This election is important to the future of Canada, but not in the way that many think. The shape of our country in 2020 is being set not in the corridors of power of Ottawa and Queen's Park, but by the construction workers repairing roads and building subways, and by the municipal councils who pay them and direct them. To ensure our future, it's time for the federal and provincial governments to lend us a hand, or get out of the way.

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