Victoria's Choice: to be or not to be ...is not the question

[Mike K.]

Title: Victoria's Choice: to be or not to be ...is not the question
Author: Yule Heibel
Published: December 03, 2007

Here's an interesting fact: "Taxes generated in the big city produce enormous revenues for the provincial and federal governments - each big city resident probably pays a sum of $2000 per annum to each senior government above and beyond services received." (emphasis added; see Local Government Bulletin No.3/2000) Note that this applies to Canadian "big" cities (specifically, Toronto), but a similar mismatch in taxes paid and services received applies in mid-size cities (Victoria) or regional municipal clusters (the CRD) as well.

Canadian municipalities rely on property taxes for over 50% of their budgets. Compare this to US cities, which rely on property taxes for ~15%, or European cities at ~5%, according to Alan Broadbent. Unlike other cities, Canadian cities cannot directly collect provincial sales taxes or GST, nor does our city get a direct share of income taxes paid its residents. Consider that for every $1.00 Canadians pay in taxes, the Feds collect $0.50, the Province $0.42, and the municipality in which that Canadian taxpayer lives collects a mere $0.08.

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[Ms. B. Havin]

I don't know if you all saw the CanWest article on Dec.27, France turns to Canada for ideas on how to tame runaway deficit. The article starts with this:

France's flamboyant President Nicolas Sarkozy, whose love affair with an ex-supermodel has gripped French public attention, also has a passion for Canadian policy initiatives and will make his first official visit there in the coming year, says one of his key ministers.

Both Sarkozy and French Prime Minister François Fillon will go to Canada on separate occasions in 2008 to mark the celebration of Quebec City's 400th anniversary, said éric Besson, the minister of state responsible for advising Sarkozy on "forward planning and assessment of public policies."

Sarkozy, called the "omni-president" because of his overwhelming presence in the French media, sees Canada as a source of inspiration as he initiates economic and social reforms in France, according to Besson.

But to my mind, the most telling bit came right at the end, which goes like this:

Besson, a former socialist member whose defection helped Sarkozy defeat socialist candidate Segolene Royal in the 2007 presidential election, stressed that Canada isn't a "model" for France.

Besson said Canada can't serve as a true model for France because the countries, one a federation and the other a unitary state, are so different.

France doesn't have the option, he said, of off-loading spending commitments to another level of government, as former prime minister Jean Chrétien and his finance minister, Paul Martin, did during the 1990s.

That off- or down-loading, which went into high-gear in the 90s, resulted in the Provinces also down-loading to municipalities. Hence, mental hospitals closed, patients were dumped into communities -- which hadn't the resources to handle them. And so on.

We're seeing the fruits of that now, and it's biting us, hard. Canada's competitive advantage is going down as a result. Libertarians like davek, who would privatize everything, notwithstanding: without good government, countries start to fail, and downloading responsibilities to the municipalities, without giving them adequate tools(*) to handle the additional responsibilities, has helped create budget surpluses at the "senior" levels of government, but it has weakened urban infrastructure and safety (including safety nets). (*)= I don't support going back to a paternalistic model, where senior levels dole out help & $$ in a "father knows best" mode; I think cities should have better taxation tools, including getting a percent of the GST for example, and perhaps the PST, so that they can then competitively improve the city, the infrastructure, housing issues, and other areas that cities need to do well in if they want to thrive economically.

If you want to read an interesting PDF on Canada's performance as a whole in the new knowledge economy (and remember that cities are the locus for that economy), take a peek at Government and Globalization: What kind of public service does Canada need in order to thrive in the knowledge economy?, by Michael Lister (Sept. 07, Public Policy Forum).