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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. 52, December 2004
Local Government Bulletin No.52, December 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
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In this bulletin:
1. The federal transfer of gas tax revenue
2. December Blues
3. Hamilton Election Contributions, Part 2
4. Counting the municipal infrastructure deficit
5. Subscribe to the Bulletin
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1. The federal transfer of gas tax revenue

Rumours have swirled for the last few weeks that a federal government announcement concerning how a share of the gas tax will be passed on to cities and communities is imminent. The decision was apparently made by the federal Cabinet on Thursday December 16, but as of the publication of this Bulletin no announcement has been made.

The best information is that the Cabinet has generally agreed to the proposal endorsed by the Federation of Canadian Municipalities on December 4. The FCM proposal is not entirely clear, but seems to suggest that 25 per cent of the transfer will be based on transit ridership, and the other 75 per cent on population, with minimum allocations for any province or territory set at $25 million. Here are the exact words of the FCM position:

1. Accordingly, we propose to the Government of Canada that the national allocation of fuel-tax revenue be based on a per capita calculation and recognize diversity by providing solutions tailored to the unique conditions and needs of the sector. This revenue would be dedicated to sustainable infrastructure investments.
2. Further, we propose that separate, special regional allocations be established for smaller provinces and territories to ensure that each receives at least $25 million per year. This will ensure that they receive allocations sufficient to undertake strategic investments in sustainable infrastructure.
3. To meet the pressing needs of Canada’s largest cities, metropolitan areas and municipalities, we propose that intra-provincial/territorial distribution (where appropriate) include a permanent dedicated allocation, considering transit ridership, to support transit investments. Funding would not fall below a level equivalent to 25 per cent of total fuel-tax revenue.

The full FCM position, including introductory paragraphs, can be found at http://www.fcm.ca/newfcm/Java/frame.htm . It argues that the funding to smaller municipalities will be used for sustainable infrastructure, but not at the expense of or in lieu of existing federal funding.

Such a formula is a significant blow for large cities, particularly since this whole exercise had been launched when Paul Martin made his pitch for a New Deal for Cities 18 months ago. At that time, it seemed as though large cities would actually get special status in recognition of their importance in the economic and social life of the country. This kind of formula squanders that opportunity, probably for the duration of the Martin government. This was the chance to address the issue of cities, and it has been flubbed. With this federal government, big cities are treated pretty much the same as big towns – and small towns.

In January of this year, Prime Minister Martin’s man on the dossier, MP John Godfrey, concluded a speech saying “In the end, a New Deal for Canada’s cities and municipalities will have three elements: the money, new relationships, and the urban lens.”

The transfer certainly involves new money, however limited the allocation for cities. But there is no new relationship to speak of, and if the FCM proposal is the basis for the federal decision, no urban lens worth speaking of either.

2. December Blues
About 12 months ago it seemed that 2004 might be the year for the turn-around in the fate of Canadian cities. But it seems that hope was misplaced.

Before its (re-)election in June, the Government of Paul Martin was unable to outline effective ways of strengthening cities, either financially or in terms of consultative status, and sadly that has remained the case since then. MP John Godfrey, an MP from Ontario with probably more credibility than any other MP in the province, had been charged with delivering the new deal for cities. But that was diluted to a new deal for cities and communities – that is, a new deal for everyone - and he has been unable to create any excitement of note.

Godfrey and his federal government colleagues are plodding to some arrangement which might release some gas tax revenue in 2005, but as noted above it will be a pittance for large cities. Small communities will find extra dollars at their disposal which will most certainly be welcome, but few of them bear the burden of transit and affordable housing expenditures borne by large cities.

At the same time, the momentum to provoke change seems to have eluded the mayors of Canada’s largest cities. Toronto’s Mayor David Miller and Vancouver’s Mayor Larry Campbell are the leading spokespersons for the larger cities now that Winnipeg’s former mayor Glen Murray proved unable to secure a seat in Parliament, but both of them have been distracted from the larger issue by local problems. Miller has been responding to those who say his first year has been pretty void of significant activity, by announcing a number of new initiatives. Campbell hoped to continue the wave of reform with the institution of a ward system, but a referendum on that question in October was not successful. These kinds of challenges discourage one from taking new initiatives.

In Ontario there are opportunities for Toronto, other large cities, and smaller municipalities to obtain more legislative power from Premier Dalton McGuinty’s government, but to date there seems to be little enthusiasm for making strong requests. Perhaps Toronto fears that increased powers might be accompanied by the need for increased municipal taxes. That’s a trade-off many seem unwilling to consider.

All in all this has been a discouraging year for cities. Could next year be better?

3. Hamilton Election Contributions, Part 2

It promises to be a long story. In Bulletin No. 50 we recounted the application by Hamilton bookseller Joanna Chapman to enforce the election contribution provisions of the Municipal Elections Act against candidates in the November 2003 election in that city. It turns out that being a citizen who wants to see the law upheld is not an easy thing to do.

Chapman had alleged irregularities in respect to the election contributions of three councillors and five other candidates (who were defeated) as well as Mayor Larry DiIanni. She cited very specific irregularities in respect to each candidate but City Council decided not to undertake the compliance audit permitted under the Act and that necessitated Chapman’s application to the courts.

The matter has taken six days of court time so far, and that’s hardly an inexpensive venture for a citizen. So far Councillors Bill Kelly, Tom Jackson and Terry Whitehead have all indicated that they will correct wrong information in their election returns in order to comply with the law. The five defeated candidates have said they will do the same, and Chapman has agreed that when this happens she will drop her demand for compliance audits against them. By dropping these demands Chapman will avoid the extra cost of ten more court days threatened by these candidates. “None of them (the candidates) have said I am wrong, “ Chapman was quoted as saying in the local press, “but this is costing me, the candidates and the courts far more than the amounts of their over-contributions.”

What remains outstanding is the request for a compliance audit of the filing made by Mayor Larry DiIanni. Chapman is alleging more than 30 irregular donations to his campaign, and a court ruling against DiIanni could cost him his seat on council. That application comes forward on February 7 and one can be sure things won’t get easier for Chapman in trying to ensure that the law is complied with. The Municipal Elections Act, unfortunately, is not much of a deterrent to a candidate who decides to act with impunity when it comes to accounting properly for campaign contributions.

Further information on this matter can be found on the extraordinary website of CATCH, (Citizens At City Hall) which monitors the strange happenings at Hamilton City Hall. CATCH reports on city meetings can be found at http://www.environmenthamilton.org/CATCH . For a report on the Chapman case, see `past CATCH articles’, December 10.

4. Counting the municipal infrastructure deficit

Some web sites are just full of activity, and that’s true about the site that claims to accurately reflect, at each minute of each day, exactly how far in the hole municipalities are with respect to the repair and condition of their infrastructure.
See http://fcm.ca/newfcm/Java/deficit/counter_e.asp and prepare to be mesmerized. Of course, it is this web site which provides the rationale for FCM’s position on federal gas tax transfers.

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 January.

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