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The bulletin is prepared by John Sewell, the site manager, with the assistance and under the guidance of the advisory committee. It is published monthly, and is being sent to a wide range of people across Canada. Past copies of the bulletin will be archived in this section of the site.

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Bulletin No. 51, November 2004
LOCAL GOVERNMENT BULLETIN No.51, November 2004

The purpose of this bulletin is to focus debate on the need to increase local self-government in Canada and to help local communities achieve more autonomy. The local self-government website is: http://www.localgovernment.ca

In this Bulletin:
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1. The difficulty of wearing two hats
2. Power shift possibilities in Ontario
3. Municipal revenue options
4. No wards in Vancouver
5. Subscribe to the Bulletin
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1. The difficulty of wearing two hats

The biggest problem for David Bell, Mayor of Marathon is not a disgruntled constituency but a disgruntled employer. Marathon has a population of about 6,000 and is on the north shore of Lake Superior in Ontario.

In October 2003, a month before the municipal election, Mr. Bell sought approval from his employer to engage in the election as a candidate only to be told it was not possible. Nevertheless he ran, defeated the incumbent, was elected Mayor in November. The employer then issued an ultimatum: either resign his job or apply for unpaid leave of absence (although it’s difficult to survive on the meager mayor’s remuneration), or resign as mayor. Mr. Bell took neither option but was sworn in as Mayor on December 1.

As report in Bulletin No. 42, the employer wasted no time in suspending Mr. Bell on December 2. That same day he was discharged under the Police Act with discreditable conduct, that is, not following orders.

Mr. Bell’s problem is that he works as a constable for the Ontario Provincial Police. The OPP thought it was impossible to be both mayor and a police officer since the two positions would conflict.

The charges of discreditable conduct were recently heard in the last few weeks in Thunder Bay before Mr. Justice William Wolski who in his decision (pronounced at the end of October) said “I accept that David Bell would be an excellent Mayor. But unfortunately I cannot accept that he can be mayor and a police constable of the Ontario Provincial Police at the same time.”

He said that Mr. Bell would be in a fundamental conflict juggling both jobs. According to the Thunder Bay Chronicle-Journal he said that “a police officer on duty will be drawn into conversations that pertain to his job as mayor – as happened once when Bell was in a courthouse and someone began talking to him about the controversy surrounding the search for a new landfill site. He will be on duty, Wolski said, and engaging in political activity [that] is contrary to the principle that police officers are servants of no one except the law.”

Mr. Wolski considered the idea of the mayor declaring a conflict when council dealt with policing issues but concluded that it short-changed the residents of Marathon. Bell was found guilty of two counts of discreditable conduct, and one of insubordination.

The consequences of the decision are still unclear - a decision on that will be made by Mr. Wolski on November 15. Mr. Bell could face demotion on the police force or dismissal. The decision of Mr. Wolski was oral, and has not yet been reduced to writing. The reports are to be found on the Thunder Bay Chronicle-Journal, http://www.chronicaljournal.com .

2. Power shift possibilities in Ontario

Contrary to the observations in Bulletin No. 50, it appears the Ontario provincial government is quite serious about considering significant shifts in power to local governments.

A committee has been struck with the Association of Municipalities of Ontario so that representatives of AMO and of the Ministry of Municipal Affairs can consider proposals of interest to smaller municipalities to amend the Municipal Act. Provincial staff have apparently been instructed to consider seriously all kinds of changes and to work quickly so legislation can be introduced in 2005.

A parallel process is occurring to consider specific powers required by Toronto and other large cities, and a committee of provincial and city officials has been struck to look at proposals that the city might make. The stated objectives of the exercise are exceedingly broad:

1. Make the City of Toronto more fiscally sustainable, autonomous and accountable.

2. Improve Ontario’s quality of life and competitiveness by equipping Toronto – Ontario’s engine of economic growth – with the legislative tools it requires to thrive as a modern, global urban centre.

3. Reduce red tape and improve the efficiency of the governments of Ontario and Toronto by eliminating duplicative, unnecessary and time-consuming measures that provide little public benefit.

But the city seems not willing to dig its teeth into the issues. Rosanna Scotti, a senior member of the city’s negotiating team and co-chair of the staff working group was quoted in The Toronto Star to the effect that there is no need to make these meetings public since “It’s so boring.”

Unfortunately this seems to signal the approach the city is taking to these discussions, and reports are that little of substance is being put on the table from the city’s side. Requests to Mayor David Miller to hold public discussions on the powers that the city should be asking for have been met with silence. The city’s position was described in a May 2003 report to city council, prepared when a hostile government was in power at the provincial level, and the proposals there are modest indeed. That report can be found at http://www.canadascities.ca/pdf/fulldoc0403.pdf .

Kathleen Wynne, a Liberal Party MLA and parliamentary assistant to the Minister of Education, introduced a private member’s bill (Bill 120, http://www.ontla.on.ca/documents/Bills/38_Parliament/Session1/b120_e.htm ) which proposes giving more powers to the city. The bill has passed second reading with complimentary comments by all parties in the Legislature on its way to committee, but neither the Mayor nor councilors have shown any interest in it, and have yet to comment on the contents of the bill.

One fears Toronto City Council is not willing to participate with any enthusiasm in a process which gives it more control over, and responsibility for, its own affairs. Maybe councillors are happy to feel like victims. One observer was heard to say that the city is very worried that if it received more taxing powers, it might have to exercise them. If city council won’t take the initiative on this extraordinary opportunity maybe others will. It is not every day that a provincial government says with considerable seriousness that it is willing to give the city more power and authority to be self governing.

The terms of reference for the city/provincial negotiations can be found at
http://www.canadascities.ca/pdf/termsofref_torontoact.pdf . That web site, prepared by the City of Toronto, contains a number of other documents produced in the past four years relating to issues of autonomy.

3. Municipal revenue sharing

A new report on the new tax bases that large Canadian cities should be demanding has recently been completed by economist Enid Slack for some of Canada’s largest cities. Entitled `Revenue Sharing Options for Canada’s Hub Cities’, the report looks at what’s available, and what might work.

Five options are reviewed:
* transferring a share of federal or provincial revenues to cities.
* piggybacking onto federal or provincial taxes and sharing according to a formula; or distributing according to the city where the taxes are collected
* piggybacking onto federal or provincial taxes with locally set tax rates.
* cities levying and collecting their own taxes.

Different tax options are evaluated, and the general conclusions are (quoting from the report’s summary):

“Access to personal income taxes would provide cities with the most revenue. Income taxes are a response to changes in the economy, appropriate to pay for social services because they are based on ability to pay, and easy to administer with locally set tax rates (local tax rates would require region-wide cooperation to avoid tax competition, however). Because income tax revenues are responsive to changes in the economy, revenues will increase during an economic boom but they will also decline during a downturn.

“Corporate income taxes are not an appropriate revenue source for cities because it is difficult to determine where revenues are collected, the tax base is mobile, revenues are volatile, and the tax bears no relationship to benefits received from municipal services.

“Sales tax revenues are responsive to changes in the economy but less so than income taxes. Locally set tax relates would be difficult to administer because of the inability to determine where revenues are collected: revenue sharing on the basis of a formula is possible.

“Excise taxes (including hotel/motel occupancy, meals, fuel, liquor, tobacco, and land transfer taxes) would add to the mix of taxes at the local level but they generally do not yield significant revenues. Hotel/motel occupancy tax revenues are responsive to changes in the economy and could compensate cities for the benefits received by visitors from municipal services. Other excise taxes could be used to a limited extent to provide the hub cities with access to revenues from a range of tax options.”

The report also includes estimates of the kinds of revenues Canada’s largest cities could expect if they collected: 10 per cent of provincial income tax (considered to be roughly equal to one per cent of income), 1 per cent of sales tax, one cent per litre on fuel tax, and a one per cent tax on hotel/motel rooms. Income tax is the clear favourite for sharing, not least because it produces the most revenue.

The full report, which is 20 pages long , can be found at
http://www.canadascities.ca/pdf/revenuesharingoptions.pdf .

4. No wards for Vancouver
Once again Vancouver voters refused to adopt a ward system for the city. The October 16, plebiscite attracted only 22.6 per cent of the registered votes who decided by a margin of 54 per cent opposed and 46 per cent in favour to say No to wards. This matter was reported on earlier in Bulletins No. 48 and 50.
5. Subscribe to the Bulletin
The bulletin is sent monthly, at no cost, to about 1500 individuals involved directly or indirectly in local government in Canada. Those who receive this Bulletin directly (not forwarded by a third party) are already part of the subscription list. Others who wish to subscribe should go to http://www.localgovernment.ca and follow the instructions. To unsubscribe, please send a message to info@localgovernment.ca indicating your wish to unsubscribe.
More information about the sponsors of the bulletin, a library of relevant and useful documents, and an archive of past Bulletins, can be found on our web site. We appreciate your comments, your feedback (to j.sewell@on.aibn.com ), and items of interest that you wish to share with us and others who visit the web site. Our next Bulletin will be in December.

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