Doing the heavy lifting
A discussion of Red Deer’s budget is a pretty dismal topic to start the New Year. So let’s talk about Edmonton’s and Calgary’s budgets instead.
The combined populations of Edmonton and Calgary are greater than all of Canada’s provinces and territories, except Ontario, Quebec and British Columbia.
De-populate Calgary, and all of Nova Scotia or New Brunswick, Newfoundland and Labrador or Prince Edward Island would fit inside — with room left to include everyone from the Northwest Territories, Yukon and Nunavut.
More than 80 per cent of Alberta lives in urban areas, which also happen to be Canada’s fastest-growing population centres.
That creates huge planning and budget headaches for the mayors and councils of our cities — something our own mayor and council can surely appreciate.
No matter how much the federal and provincial governments like to remind us of the valuable services we taxpayers get from the 30 to 40 per cent of our total annual income that we send them, almost all the services we rely on day-to-day are provided by our cities.
Yet, beyond the handouts strictly controlled by the provincial government, our cities rely on the worst conceivable method of revenue gathering: property taxes. They also get revenue from business taxes, of course, but it is property tax rates that end up creating the bottom line of every city and town’s local budget.
Not to mention, the most grief for locally-elected officials.
Other than your own personal comfort and security, your home provides no added value to the economy at large. A few people (like me) earn a few dollars working out of their homes, but that contribution is immeasurably small (especially mine).
The resale value of your home adds nothing to the economy, so why tax it? It is only cultural inertia and laziness on the part of federal and provincial governments that keeps the system as it is.
The mayors who must budget for two of Canada’s largest and fastest-growing population zones say they want power to generate city revenue out of the economic activity, not land value, of their economies.
Predictably, the province is not overwhelmingly behind them.
Premier Alison Redford and Doug Griffiths, her former minister of municipal affairs, were dead against Edmonton and Calgary gaining additional tax powers in a new set of charters. Especially if it meant the province got less revenue.
They both sang the common refrain: “There’s only one taxpayer.” They have that taxpayer solidly chained to themselves, and they had no intention of sharing.
With the recent instalment of Ken Hughes as the new minister, Calgary Mayor Naheed Nenshi and Edmonton Mayor Don Iveson see an opportunity to restart talks on a charter idea that had been sitting idle since 2012.
While Griffiths said new tax powers were off the table, Nenshi scoffed that they were always on. You can’t simply say an idea doesn’t exist just because you’re the provincial minister. Hughes sees that light and says he’s willing to at least talk about the idea.
Redford says that if Edmonton and Calgary got any new tax powers, any revenues raised would be deducted from the Municipal Sustainability Initiative grants the cities receive. Last year, Calgary got $254 million and Edmonton got $170 million.
Don’t you feel so protected by that? Of course, there is no mention at all that the province would offer any tax relief at all to anyone to offset the revenues that would no longer be sent to the major cities in MSI grants.
See the dichotomy? Taxpayers in Edmonton and Calgary certainly would.
Danielle Smith of the Wildrose opposition says that transit, homelessness and traffic issues will require extra revenue for our cities to pay for them. The pressures of rapid growth are unassailable; you can’t just close your doors to newcomers.
Smith doesn’t know how or where an agreement for that would arrive.
I do. It arrives from the province and feds taking less, because they are doing less.
But as you can surely appreciate, there’s an idea that’s off the table.
Cities do all the heavy lifting for the daily life of this nation. Roads, power, sewers, water, safety, law enforcement — the provision of our daily bread — all are made available where the people live.
When Canada was founded, that was done on farms. Today, it is in cities.
Taxing property value is a quagmire of wilful ignorance. We need less province, more city, in the power structure of this nation — with a revenue system to match it.
Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email email@example.com.