INDEPTH: MUNICIPALITIES
City States - Series Finale: The Panel
CBC News Online | September 10, 2004
Glen Murray, the former mayor of Winnipeg - defeated in a bid for a seat in Parliament but still an outspoken urban advocate (CP PHOTO/Winnipeg Free Press/Joe Bryksa)
Larry Bourne of the University of Toronto's Centre for Urban and Community Studies, a believer in regional solutions to municipal problems
Anne Golden - currently head of the Conference Board of Canada, and the author of two major government reports on big-city problems and solutions (CP PHOTO/Jonathan Hayward)
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Producers: Margaret Daly, Alan Guettel
When the City States series began in the spring of 2004, there was a federal election pending. The leaders of Canada's biggest metropolitan areas had high hopes for Paul Martin's promised New Deal for Cities.
Urban advocates have since become disillusioned. Ottawa is backing farther and farther away from the original concept of the New Deal: That the country's major cities are in dire straits and need help. Not in the form of cash handouts, but in the authority to raise revenues of their own - and to solve their own problems.
CBC News put together a panel of three urban advocates with strong views about what's needed and why.
Here are some edited excerpts from their discussion:
On what the problem is:
Larry Bourne: There's clearly an imbalance between what cities are asked to do, and the
revenues and legislative tools they have to deal with those issues. And those issues differ from place to place, so cities need a degree of flexibility in how to address their problems. There's no way that senior levels of government can apply one policy to each and every municipality.
Anne Golden: The New Deal for Cities has somehow morphed into a broad policy to help "communities". This means, since 80 per cent of the country living in urban communities of some sort, that you're spreading your resources over the country like a
thin layer of peanut butter. There'll be no strategic impact and no payback. The New Deal originated because the major city-regions, the drivers of our economy, are in trouble. Special priority must be given to major cities like Toronto, Vancouver and Montreal.
Glen Murray: We've got to think about taxes in more sophisticated terms than the tired old song about how there's only one taxpayer in the country. Canadians distinctly understand that their taxes are used for different reasons, and have different outcomes, depending on which government they go to. And the federal and provincial governments have fiercely guarded all the growth taxes.
In the last 10 years in Winnipeg, federal revenues grew by 70 per cent, provincial revenues by 50 per cent, and city revenues by just 8 per cent. Inflation in that period was 21 per cent. So city government was collecting taxes at a rate well under inflation, while the feds and province collected from that same pool of taxpayers at rates three or four times that of inflation.
No wonder there's an infrastructure crisis in the country, and city services are so badly under funded! All the tax revenues that grow with the economy, that are results of good public and private decisions in the urban centres of the country, go to other orders of governments, while cities are left with sweet nothing.
That's the underpinning of the crisis, and what Ottawa and the provinces don't
want to face -- that fiscal imbalance. And it's hurting the ability of cities to create economic growth - which is going to hurt those same federal and provincial revenues in the long run. It's a zero-sum game.
On stimulating the urban economy:
Anne Golden: I took a trip to the World Bank recently. They look at cities - and not just in developed countries but even in the less developed countries, as the source of creativity, for new ideas and new solutions, for the entrepreneurial spirit… When we
think about the productivity of country, it's essential to understand that the key to that productivity is innovation - the whole innovation dynamic centres on cities. We're short-changing ourselves, we're not fulfilling our potential as a country, because we're not investing in our cities - and also because we're not investing in the human capital, in the
immigrants who come mainly to cities, and ensuring that they're able to maximize their own potential.
Glen Murray: Cities have to get some share of existing tax revenues, whether it be the
income tax or sales tax or corporate taxation - but taxes that grow with the economy.
When I was mayor of Winnipeg we cut our debt in half. City governments are
usually very efficiently run. We discovered that if you took every tax dollar we paid as
Winnipeggers, it took a only a 2 per cent shift in distribution to run the city right. That is, if we went from getting 6 per cent of all tax revenues to 8 per cent we would have enough money to fix all our streets, fix all our pipes, have enough police officers and so on. That basic 2 per cent shift meant that the province, which collects 44 per cent of tax revenues and the federal government, which collects 49 per cent, would actually have to give up just 1 per cent each of the total revenue collected out of the city. (The figure will vary slightly from city to city.)
Now what will that do? If you look at the examples of many U.S. cities that have a share of those tax revenues, those investments translate into the kind of public infrastructure required for real growth in the economy. You see stronger GDP growth. If we give cities in Canada the same tools that cities in the U.S. and Europe have, and they can create the kind of private and public partnership investments that will see real economic growth, then Ottawa and the provinces end up with net new tax revenues from a growing tax pie, rather than taking an exaggerated or unfair amount out of the existing tax base.
And that means cities become bigger tax engines with lighter tax burdens, as we will see a stronger economy with more jobs, more investments, more exports. And that is particularly important as we move toward free trade and a very integrated North American economy. Our cities become very important because you only really grow a national economy with exports.
On how Canada's immigration policy affects cities:
Anne Golden: Immigration sums up the entire problem we're discussing today in microcosm. Here's a situation that, clearly, disproportionately affects three cities in the country. Fifty per cent of immigrants come to Toronto, the next 25 per cent are split pretty evenly between Vancouver and Montreal, and the remaining 25 are spread out
around the country. The amount of money available to cities to help them settle is
insufficient, it's not fairly allocated, and it could be easily be rectified. That would be a good place to start.
Larry Bourne: The average federal subsidy to new immigrants for settlement is between $1,200 and $1,500. That is way too low. In fact I've made the joking suggestion that we might as well hand every new immigrant a backpack. In it we could put some maple syrup, one or two Macintosh apples, a little Canadian flag, and a check for $5000 - made out to "where you live" - and cheque is handed to the municipality where they take up residence. And that municipality uses that money to provide the schools, services, infrastructure, roads, buses to accommodate that population.
Glen Murray: The changing environment that results from immigration is what I call the anticipatory power of government. A city needs to have enough authority,
commensurate with its responsibilities, to develop plans for then years out, to anticipate that the city is going to be very different. We're going to have a much older population, a more multicultural population, that in turn will mean different transportation systems, different types of health care and social services, housing, linguistic services, education.
And in Canada we haven't even inventoried the responsibilities of our cities and our provinces and our federal government, sorted out who is doing what. Within each government, departments are siloed; but from government to government, with the three orders of government we have, they're incredibly siloed.
On the current state of the New Deal for Cities:
Larry Bourne: The proposed New Deal is not a New Deal - in fact at this point it's not a deal, either.
Whatever direction the current New Deal discussions go in, we have to go beyond those. If we were able tomorrow to rejig finances so that local governments get a share of tax revenues, we still wouldn't have solved problems... Like homelessness, social inequities, congestion, environmental issues. These won't be solved simply by rejigging the revenue/responsibility balance. But we do have to get that right before we move on. So the ND is really, however it turns out, Step One, in looking at a variety of urban issues down the road.
Anne Golden: By morphing the original intent of the New Deal, it has lost a lot of its potential. The New Deal was beyond simply giving more money, in a one-shot grant for transit. It was intended to create a situation where the fiscal shortfall was solved, where there was a new level of respect for the municipal level of government, in allowing
it to be empowered to solve its own problems. That hasn't happened. There's been a tremendous momentum building for the last decade. And I think there's a certain amount of disappointment at this point in time among urban advocates that it seems stalled. Hopefully shows like this will help!
Glen Murray: I was joking with some other former mayors who are involved in the drafting of the New Deal, that we should have copyrighted the name, because it's been so misrepresented. The New Deal was initially about recognizing that cities, first off, have a huge level of responsibility, and cities do not retain a sufficient share of the public-sector revenues that are generated to sustain their existing systems. And that unless there's an alignment of revenue with responsibility, cities are going to start to break down very badly over the next decade.
More important even than revenues is having the autonomy, having the authority commensurate with the responsibilities of cities. The provincial and federal governments can't continue to hang onto the city's authorities and final decisions - which they (the feds) never make because they're not that important to them but which are critical to every mayor and city council in the country.
The other important point is that we're living in an export-based age. We often talk about the century becoming the Age of Cities. It's also the Age of Integrated Nation-States, of regional trading areas like NAFTA. It means that wealth is increasingly being created by the export of goods and services and ideas. And that is predominately an urban creation.
Most of the wealth and prosperity of our nation is going to be created in urban centres, in urban regions, based on export. Which means that you need healthy cities, good transportation and infrastructure to support those exports. And you'll have to have agile local governments. And agile local leadership in the private sector that can anticipate those opportunities and capitalize on them. Cities as political and economical units are critical to the success of any nation state and ours in Canada are grossly under-invested-in and grossly disempowered.
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List of big city mayors, from the Federation of Canadian Municipalities:
Vancouver: Larry Campbell
Surrey: Doug W. McCallum
Calgary: David Bronconnier
Edmonton: Bill Smith
Regina: Pat Fiacco
Saskatoon: Don Atchison
Winnipeg: Sam Katz
Brampton: Susan Fennell
Hamilton: Larry Dilanni
Kitchener: Carl Zehr
London: Anne Marie DeCicco
Mississauga: Hazel McCallion
Ottawa: Bob Chiarelli
Windsor: Eddie Francis
Toronto: David Miller
Gatineau: Yves Ducharme
Montréal: Gérald Tremblay
Laval: Gilles Vaillancourt
Québec: Jean-Paul L'Allier
Longueil: Jacques Olivier
Halifax: Peter J. Kelly
St. John's: Andy Wells
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Watch Brian Stewart's documentary "Cities: The Last Colonies"
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