This article appeared in the Guelph Mercury, May 2003  by Steven Petirc for the Guelph Mercury Editorial Board.

In Canada, cities have no power. They are creatures of the provinces, and as such anything they do can be undercut or overcalled by a provincial government. We have seen that in recent years, for example, in Ontario. The provincial government dismissed city councils and mayors, restructured local governments at its whim and often against the best advice available to them, and set particular parameters around how local government can operate.

While this has been most dramatic with the current Ontario government, it is only a few degrees different from what previous governments have done and have been capable of doing. The problem is that cities have no constitutional power to resist. This is also particularly difficult because there are few people in provincial governments who think very much about cities, or have very much experience in the governing or management of these tremendously complex
metropolitan areas.I find it revealing when provincial ministers speak about cities, they seem to be making it up as they go along, with most of their comments
displaying an alarming lack of substantive knowledge of what is actually going on. Dealing with cities has just become part of the political scrimmage. It is
also alarming to me when the provincial premiers gather in their semi-annual conferences to demand more power from the federal government. Never is there a
mention of the entities in which most Canadian live, the cities. Never is there a realization that the specific issues in cities demand specific attention.
It is a continuing political charade that moves further away from reality as the country becomes more urban.

One of the big problems today is that we are living with a system of government that is probably 50 years out of date.  It is way past time that both the Federal and Provincial Governments found a funding formula that would help remake Canada’s urban areas – many groaning under multiple stresses like gridlock,
waste management worries, affordable housing shortages, and crumbling infrastructure. Both provincial and federal politicians have to find a
strong, fairand stable funding formula for cities that is not based on band aid solutions like grants or Superbuild funds. Revenue sharing seems the most logical step in helping cities grow and prosper.

Revenue sharing has to be consistent, and long-term. Let’s allocate money based on priority or need, not on politics. Twisting the arm of the current government in power via the latest lobbying techniques, doesn’t help the country as a whole, and it sure doesn’t solve the fundamental problems that run deep at the local level.

All cities need stable revenue, a instant solution and talked about the most is a share of the fuel tax, now divvied up by both the federal and provincial
governments. Both Alberta and British Columbia assist cities with a tax share, and this money goes directly into infrastructure improvements, making the cities
more livable.

The Federal Government’s most recent budget allotted $3 billion to the urban areas of Canada. It a mere pittance of what the real needs of our communities
are. Once again its lots of talk but no real sustainable action. Ottawa simply had to read the proposals put forward from the reports from the Federation of Canadian Municipalities to get the clear message.

The economic health of the country is based on the economic health of the cities and if the current governments at the provincial and federal level aren’t
interested in helping, we should all band together and rise up and take them to task for it – if need be, at election time.
 
Prudent fiscal management is also what all cities should strive for. It is very critical that cities “build trust” between themselves and the other levels
of government so that when, or if, they do send more money, it won’t go down a giant sinkhole.

Local governments can’t keep raising property or business taxes to make up for shortfalls, either. We can’t tax people out of their homes. Property taxes
are starting to reach the maximum threshold.

As recent research commissioned by the Toronto Board of Trade has estimated that the difference between tax dollars leaving Toronto and tax-paid goods and
services returning to it is over $8 billion a year. These are funds that go to the senior levels government. Toronto is asking for some of this money to deal with the homeless, to restore the transit system to its position of leadership, to develop the lake front, to upgrade infrastructure critical to bolstering the economy, or many of the other things the city wants to do. At the same time this capital is being exported, cities like Toronto hear lectures from provincial governments about “living within their means” The fact appears to be that our cities are living below their means, while the provincial and federal governments are living well above theirs.

The critical point to make about this situation is that our cities are beginning to fall behind their competitor city regions. In the United States, money has been pouring into cities for the last decade or so, as that country has come to realize the drastic effects of ignoring them. From the upgrading of transportation infrastructure through creation or expansion of new cultural facilities, through the reclamation of destitute downtown neighbourhoods, to the building of inner city housing, the investments are plentiful and apparent.Canadian cities, of which Toronto, Montreal and Vancouver are good examples,
have a long history of good management and smart development, which have rendered them both livable and highly productive. But we as a countr ystopped
seriously investing in cities almost two decades ago, and instead are saddling them with new costs as a way of handling deficits of the federal and provincial
governments, the so-called “downloading.” We stopped building low-income housing, we cut back on funding transit, we cut cultural funding to the bone, and we saddled cities with extra costs of settling new immigrants. While the US increased its support of its cities, we decreased it, and in the process began to squander what was a tremendous competitive advantage we enjoyed in our cities.

What downloading should imply, although it has not to date, is that when duties move from one level of government to another, the requirement to pay for them
moves too. So when a province unloads some roads toa city, for example, it means the province can stop paying for those roads, so can stop collecting the tax
dollars that paid for them. If a city has to raise a tax to pay for the new responsibility of those roads, as far as the taxpayer is concerned it should be a wash.

There is a fundamental opportunity for leadership by the federal and provincial governments to transform Canada’s cities into fully mature, independently
sustainable financial entities. The solution is not simply kinder, gentler and more generous federal and provincial governments but more open, realistic and
responsible with the centre pieces that make this nation what it is.

Until all our urban regions can exercise a fuller responsibility for policy and programs for their citizens, and have the sources of revenue to pay for them, Canada will continue to operate suboptimally and risk losing to competing urban regions. As our cities decline competitive ability, we risk our sovereignty
as a country, as our citizens begin to look else where for the provision of goods and services. It is not enough for the Federal government or Provincal
Govenment to ask why they should support the cities but needs real leadership and  leaders who recognize the real urban reality of the 21st century, who will
accept the responsibility of communicating it to the country, and who will create an environment that will build better cities for all citizens.