Cities DO NEED A New Deal

And I don't think anyone would deny that but at the same time we need to remember that there is only one taxpayer and the normal taxpayer wants value meaning cities need to show good stewardship. No getting in bed with special interest groups whether they be unions or businesses.

Canada's cities need new deal
By PAUL BERTON
May 15, 2007

Politicians everywhere have come to the realization only recently that cities are the engines of the economy. Not the only engines, to be sure, but certainly forgotten engines.

Property taxes are regressive and unable to fund the kind of responsibilities with which cities have increasingly been burdened.

Urban populations are growing exponentially. Infrastructure is under stress and crumbling. Municipal coffers in many cases are maxed out.

And yet the federal government is clearly collecting more money than it actually needs, based on recent surpluses.

There are a hodge-podge of federal and provincial funding programs for cities across the country for various needs such as immigration, homelessness, residential rehabilitation and even infrastructure, but they have limited lifespans. As a result, cities cannot make long-term plans or even keep good staff because they never know when the show will suddenly stop.

Without stable, reliable funding from higher governments, the federal government in particular, cities cannot hope to plan for the future, a future in which they play a key role in the economic prosperity of Canada.

The best thing to happen to cities was the decision by former prime minister Paul Martin to give them a piece of the gas tax on a per capita basis. Ultimately, that will amount to about $2 billion across Canada and allow cities to plan and prosper.

But more is needed. Indications from the current government are that new programs announced in the last budget will be application-based. That will make long-term planning difficult at best.

At its meeting this month, the Big City Mayors Caucus of the Federation of Canadian Municipalities called on Ottawa for second stable source -- they want the federal government to share the equivalent of one cent of the GST with cities. Much of it will be used simply to ensure municipalities can keep up with urban growth.

The caucus, comprised of the mayors of the 22 largest cities in Canada, no doubt has the support of much of the 40 per cent of the nation's population it represents, so Ottawa is well advised to listen carefully.

It makes good political sense, but it makes better economic sense.