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Bulletin No. 53, January 2005
 Local Government Bulletin No. 53, January 2005

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. Is there a municipal infrastructure deficit?
2. Finding the proper provincial/municipal relations model in Alberta
3. New legislative powers for a large city
4. Subscribe to the Bulletin
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1. Is there a municipal infrastructure deficit?

While municipalities and the Federation of Canadian Municipalities argue for more federal and provincial funding to renovate existing public infrastructure, a response is emerging to claim that there is no serious infrastructure deficit of $1400 per capita or whatever. Instead, so goes the response, municipalities have decided to spend less money on infrastructure and more money on other matters. Infrastructure just isn’t the priority it used to be at the municipal level.

This is the argument of a C.D.Howe Institute paper released in mid-December, “Holes in the Road to Consensus: The Infrastructure Deficit – How Much and Why?” The paper is a brief three pages, and it looks at municipal spending over the last 15 years using information pulled together by Statistics Canada in 2003.

A chart shows that per capita municipal expenditure on infrastructure has increased from $351 in 1988 to $361 per capita in 2003 (using constant 1997 dollars), whereas municipal revenues in that period have increased from $1,299 to $1,432 per capita. In other words, the increase in infrastructure spending is less than 10 per cent of the extra monies available. A breakdown shows that spending on roads and streets (the loudest complaints are about their condition) has actually declined during that period. Should municipal infrastructure receive a larger share of increased municipal revenue than it is already receiving? This paper argues that if there is an infrastructure deficit the remedy lies more at the municipal level than with other levels of government. It’s a question of priorities.

The paper can be found at http://www.cdhowe.org/pdf/ebrief_9.pdf

2. Finding the proper provincial/municipal relations model in Alberta

Sometimes the simplest expression of good intentions creates more trouble that it is worth. This seems to be the case in Ontario where Bill 92 is causing a significant division between the Ontario Municipal Association (AMO), the City of Toronto, and the provincial government. The province had hoped this Bill would ease, not enlarge, tensions.

Bill 92 consists of three short sections. One section gives the bill a the title, one says the Act comes into force when it receives Royal Assent, and the third reads as follows:

“Subsection 3(1) of the Municipal Act, 2001 is repealed and the following substituted: `The Province of Ontario endorses the principle of ongoing consultation between the Province and municipalities in relation to matters of mutual interest and, consistent with this principle, the Province shall consult with municipalities in accordance with a memorandum of understanding entered into between the Province and the Association of Municipalities of Ontario.’”

The words proposed to be added to the 2001 version of this subsection and "and, consistent with this principle..." to the end. The terms of the memorandum referred to were outlined in Bulletin No. 50 (September 2004) and the full text is found at
http://www.mah.gov.on.ca/userfiles/page_attachments/library/1/1311447_MOUAgreement.pdf . The MoU generally states that the way consultation will happen between provincial and local governments is through AMO.

Toronto thinks this is inappropriate as a method of consultation. “Toronto is the sixth largest government in Canada,” says Toronto mayor David Miller. “We are the largest provider of childcare in Canada except for the Province of Quebec; and we are the largest social housing provider in Canada,” He says that Toronto is large enough to have its own consultations with the province without have to go through AMO.

What is left unsaid by city politicians is that AMO generally represents the interests of many smaller municipalities, not big cities, since every member municipality, no matter what its size, has one vote in AMO decisions. As Toronto councillor Howard Moscoe remarked recently, “The issues are too important for Toronto to submerge its needs in a municipal organization.”

A city committee has recommended to City Council that Toronto not renew its membership in AMO for the current year (this represents a loss to AMO of $72,000). It also recommends that the province use a consultation model similar to that in Alberta where that province consults concurrently with Calgary and Edmonton and with municipal associations, recognizing that Calgary and Edmonton are different than other municipalities in that province. Toronto suggests that in Ontario the province should sit down with Toronto, and perhaps with other large cities such as Ottawa, London and Hamilton, and with AMO and the rural municipal association.

The province has yet to respond to the city’s request and it has yet to suggest amendments to Bill 92, which received First Reading last June.

3. New legislative powers for a big city

In Toronto there are rumblings that the Mayor’s Office will undertake some public process to start a more wide-ranging discussion about the powers that Toronto as a large city should be asking from the provincial government.

As pointed out in previous Bulletins this is no small matter. The opportunity presented by a provincial government that says it is interested in bestowing more powers is not one that should be missed. To help provoke debate, here is a brief proposal about legislative powers for big cities in Canada and what might be requested. In the next newsletter some suggestions about powers concerning revenues and protection from unilateral provincial action will be addressed.
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Affordable housing, air and water quality, civic beauty, child poverty, immigrant opportunities, public transit – there’s a long list of big city problems that virtually all thinking people in large cities agree need to be resolved. But how?

We can continue to ask the other levels of government to solve these problems for us, but it’s hard to catch their attention – they have many other things on their plate that they think are equally or more important. Those governments have their own priorities.

Or we can take the direct route - we can decide that we should address these issues ourselves. We can begin to take full responsibility for city problems.

It’s a challenge for a city government to take responsibility for the problems it thinks needs solving. One fear is blame: if problems aren’t solved, the city government may feel it has failed with no one to blame but itself. Another worry is money: some problems need money to fix, and cities currently complain they don’t have enough funds to deal with their very limited responsibilities. The third fear is that maybe some problems can’t be fixed.

But for a smart mature city, these answers sound like excuses. If city government doesn’t take responsibility for its problems, chances are those problems won’t receive the attention they deserve. Why? Because of the feedback loop. The city is close enough to problems to get good feedback quickly on whether or not its solutions are effective. Other levels of government don’t have that advantage. When (and if) those other levels get feedback, it’s as likely from a small town or small city as from the big city, and problems are different there. Provincial welfare systems might be entirely appropriate for rural or suburban communities, but we know they’re not appropriate for large cities because they don’t help people get out of poverty and back on their feet. (If welfare systems did work well in big cities, given all the money spent on them, poverty would already have been substantially reduced, as it has been in some Scandinavian countries.)

Feedback loops are critical for good government policy – as critical as the market is to assess the success of consumer goods and services in the private sector– but they don’t work well at a distance.

Is big city government capable of delivering good programs? We know the populations of our biggest cities are larger than some provinces in Canada. We know their economies are very powerful, currently producing tax surpluses (about $10 billion a year within Toronto, and comparable amounts for other large cities, proportionate to population.) These surpluses flow into provincial and federal coffers to be spent elsewhere in the country. We know big city government is more transparent than any provincial government – by law city meetings must be held in public unlike all provincial governments where the Cabinet (the real decision-maker) meets in private. Big cities have annual budgets larger than some provinces.

Admittedly, too often city councilors seem not to think as big as they should, but that’s a short-coming of many provincial MLAs and federal MPs as well, a short-coming they try to hide from us by their spin-doctors. City decision-makers aren’t any less intelligent or concerned than other elected officials at other levels. They can act smart and mature if given half a chance.

What big cities need to start addressing their problems is the power and responsibility to do so, and the ability to raise money through taxes to meet their obligations. They don’t need all the powers at once, nor all the money in one fell swoop – they must grow into this mature status over time. But they need a wide enough band of the power and financial authority to begin addressing the most serious problems, and once those are well in hand, they need the facility of moving on to other issues.

In short, big cities need a legislative framework that allows them to stretch and expand into their responsibilities and obligations, knowing that nothing will stand in their road as they decide to move forward – nothing, that is, except their own sense of self-worth. They need a legislative framework that allows them to be smart and mature.

The required package comes in three parts. First, cities need general unrestricted powers to pass laws, with appropriate controls to ensure there is no conflict with provincial laws. In that way, provincial decisions can continue to be effective in areas where big cities have decided not to act, or in areas where provinces have claimed for themselves the exclusive power to make decisions. In the latter case, there will certainly be useful discussions between the city and the province in areas where the city feels not enough is being done and the province tries to prevent the city from doing more.

The form of the needed legislation is similar in scope to that given provincial governments in the British North America Act of 1867 (now the Constitution Act, 1867), which divided powers between the federal and provincial governments. Here’s the wording from the 1867 document, modified to reflect the real powers being assigned to a city government:

The Council (of the specified big city, say Toronto) may make laws in regard to all matters it regards as appropriate for the good governance of the city. Any law of the city will have effect in and for the city only so far as it is not repugnant to any act of the provincial Legislature.

Some might suggest that the powers should be specified – for transportation, child care, housing, air quality, and so forth – but where does the list end? It’s better to grant powers as wide and general as possible (as was done for original provinces) recognizing that there might be provincial limits against which the city could bump, but no other restrictions. Conflict will occur only in cases where the province has passed legislation – big cities can’t be restrained by provincial intentions – and where that exists, there will have to be negotiations between the two governments. Who could complain about that?

Using the same language as was used to grant powers to provinces means that there’s no necessity to tinker with definitions of `natural powers’, an endeavour that has eaten up much time with the recently enacted Municipal Acts. It will be necessary to exempt big cities from the confines of existing Municipal Acts, probably best done by the province declaring that big cities are not municipalities for the purpose of those Acts.

Addressing legislative powers in broad terms allows the greatest scope for action. It’s the best start.
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The other parts of the package – taxing powers and protection from unilateral provincial actions to change powers or relationships – will be addressed in the next Bulletin.

4. Subscribe to the Bulletin

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