Canadian mayors plead for greater fiscal autonomy

Toronto Mayor John Tory was one of several Canadian officials warning that cities need increased revenue powers to make full use of a new infrastructure stimulus program. (DayOwl/Shutterstock)

As Canada’s federal government kicks a USD 61 billion infrastructure stimulus package into high gear, five big-city mayors are warning that they need increased revenue powers to make full use of the new program.

The country’s liberal prime minister, Justin Trudeau, campaigned on a promise of economic stimulus to boost Canada’s ailing economy, hit in part by declining oil prices. With strong public pledges on the importance of Canadian cities, infrastructure investments in metropolitan areas are at the heart of Trudeau’s plan, which was unveiled early this year.

But as that money — set to be spread over a dozen years — begins to arrive in provincial coffers, the mayors of Calgary, Edmonton, Ottawa, Toronto and Vancouver are concerned that they do not have the tools at their disposal to access those funds easily.

“When cities do well, our entire country benefits,” they state in a public letter published online 13 December. “But still, we find ourselves begging for control over our own finances.”

The mayors explain that cities must ask permission from their provincial capitals in order to introduce revenue measures necessary to meet the “matching” conditions of these new federal funds.

[See: New solutions to close the gap on municipal finance]

While the letter offers approval of this idea in principle — both spheres of government having skin in the game is “a good deal” and “a real partnership”, it states — the local authorities say they are frustrated by the hoops they must jump through to generate the necessary funds, a process that can become mired in politics.

In the meantime, the mayors insist they have projects that are ready to go and could benefit from the infrastructure spending spree. Toronto would like to implement road tolling to finance transit expansion, for instance. Ottawa just completed a feasibility study of an underground tunnel to remove heavy truck traffic from the city centre.

“These large infrastructure projects come at a great cost, and it is imperative that we collaborate with the provincial and federal governments to move forward with a solution that works for all,” the letter states.

The appeal comes as Montréal is preparing to negotiate more fiscal autonomy from provincial legislators in Québec via new status as a “metropolis.”

[See: Montréal pushes for more revenue and responsibility]

Canada’s current angst over the issue is part of a global trend whereby cities are calling for more fiscal autonomy. Demands range from the authority to access international capital markets to the right to collect property tax. Cities are emboldened in part by their role in major international agendas to improve livelihoods and combat climate change, notably the United Nations accords known as the Sustainable Development Goals, Paris Agreement on climate change and New Urban Agenda.

Trudeau’s infrastructure plan has hit some bumps in the road since his budget was announced in March. Bloomberg News reported in October that the federal government has struggled to move the money out of the national treasury and into projects across the vast country. The article claimed that since the budget was approved in June, with 860 infrastructure initiatives slated for investment, only one project had broken ground by the end of October.

However, the Trudeau administration appears ready to turn the corner into the new year. In November, the finance minister announced the establishment of a Canada Infrastructure Bank, capitalized to the tune of USD 26.7 billion.

Mayors say they are excited about these prospects — provided they have more input in how they are implemented. “Our request is simple: give us the tools to do the job and the accountability that goes with them and we’ll build great cities for the benefit of all Canadians,” the letter concludes.

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