Balancing budgets: Don’t do it on backs of cities

Balancing budgets: Don’t do it on backs of cities - thestar.com

Balancing budgets: Don’t do it on backs of cities
Published On Thu Nov 18 2010EmailPrint(36) Share Rss ArticleComments (36)Ads by Google
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If history is any measure of what’s to come, Canada’s municipal leaders have good reason to worry about a possible new round of downloading by federal and provincial governments. In the 1990s, cities nationwide were saddled with downloaded costs as the upper levels of government balanced their books by slashing transfers and forcing more responsibilities onto communities. Now Queen’s Park and Ottawa are, again, struggling with multi-billion-dollar deficits.

Seeking to avoid a repetition of past disaster, more than 100 civic leaders in Ottawa Wednesday urged the Conservative government to exempt the municipal level from future cost-cutting and new federally-imposed expenses.

“Canadians want Ottawa to deal with its budget deficit without shifting more costs onto their property tax bills,” said Hans Cunningham, president of the Federation of Canadian Municipalities (FCM). He’s right. When cities are stuck with bills that rightly belong to another government, they are forced to divert scarce property tax dollars from their core services, including efforts to fix a $123 billion municipal infrastructure deficit.

Diversion of spending away from infrastructure can lead to lost productivity as a result of worsening transportation gridlock and corroding water systems. The FCM was especially concerned yesterday about new federal wastewater rules that could impose $20 billion in additional costs on communities, mainly outside Ontario.

Municipalities are primarily the responsibility of the provinces. Burt since 2004, Ottawa has made a series of commendable investments in the municipal sector, including sharing money from the federal tax on gasoline, rebating the GST charged on city purchases, and funding certain infrastructure projects. Toronto has also received federal funding for waterfront redevelopment.

It would be a major step backward if the federal government were to attempt to balance its budget by rolling back these gains.