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Bulletin No. 38, June 2003
LOCAL GOVERNMENT BULLETIN – No.38, June 2003
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 web site is http://www.localgovernment.ca

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In this issue:
1. The Incredible Elasticity of Being a City
2. This just in: Canadian Municipalities in a budget crunch
3. Band-Aids for the City
4. Subscribe to the Bulletin
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1. The Incredible Elasticity of Being a City

That Canada’s population is mostly urban is in no doubt, nor is the need of urban governments to possess more legislative authority and financial resources. But in a recent essay “Elastic cities, Inelastic governments’, Professor Larry Bourne asks what exactly is the local government institution to which these new powers and authorities would be granted.

Bourne argues that well over half the population of Canada lives in five mega regions – Toronto, Montreal, Vancouver-Victoria, Edmonton-Calgary and Ottawa-Gatineau. These five regions are responsible for 80% of the country’s population growth in the last ten years, and home to more than 80% of immigrants arriving in the last ten years. But none of these regions have an over-arching governance structure – each region consists of a plethora of small local governments often in competition with each other, often incapable of dealing with the large processes and problems that confront them.

Bourne argues that special regional service agencies (such as those dealing with transit or water) are not broad enough to respond to the problems, and these agencies have difficulty coordinating their actions with other elements of the governing structures. He notes that even in cases of the recent amalgamations (Toronto, for example) these new mega-governments cover but a fraction of the whole region. Hence the title of his paper “Elastic Cities; Inelastic Governments.” The urban area keeps growing and the local government structures can’t keep up.

This problem of governance is not one that civic leaders have come to grips with. Mostly, they’ve just assumed existing local structures will continue with enhanced powers. Bourne asks that a grander approach be taken. He hints that at some kind of two-tiered structure might suffice, where one government with almost provincial powers would govern regionally and a second tier (probably the existing local governments) would deal with local issues.

Whether or not Bourne’s particular proposal is to anyone’s liking, the issue is certainly one that should receive wide debate among civic leaders. Perhaps several different models could be advanced to complement the charter city approaches being developed by Winnipeg and in British Columbia.

Bourne makes one other, and perhaps contentious, point. He argues that in the areas outside of the five city regions almost all other city governments are managing decline, not growth. “Smaller metropolitan centres such as Saskatoon, Winnipeg, Halifax, and Quebec will continue to dominate their respective regions, but are not likely to attract substantial future growth. For the rest of the country, with a few small exceptions, the combination of an older and aging population, and the absence of domestic in-migrants and immigrants, ensures that decline will become more widespread in the future.”

That may be uncomfortable news, and it may also be accurate. It might be changed by entirely different urban policies, ones that might parallel those in France where the central government has done much to strengthen smaller centres. Clearly, the problem needs to be addressed rather than dismissed.

This second observation by Bourne provokes another question: Would local government in Canada be better served with two organizations – one representing the five large urban regions and another representing the rest of Canada? Would both kinds of communities be better off, since they’d be bedded with others facing similar challenges, rather than yoked to others who don’t understand?

Bourne’s paper is available in the Library, http://www.localgovernment.ca, titled `Elastic cities, Inelastic governments.’ The paper was published in February 2003 in `Canadian Issues’, by the Association of Canadian Studies. For subscriptions, phone 514 987 7784.

2. This just in: Canadian Municipalities in a budget crunch

Statistics Canada has (once again) confirmed what local politicians know too well – the budget crunch is at the local level.

In a June 18 report, Statscan’s analysis of 2002/2003 government finances show that the federal government experienced a healthy surplus - $13.9 billion. Provinces like Alberta and Ontario also experienced surpluses, although as a group provincial and territorial governments registered deficits totalling $5.6 billion.

But local governments, with their limited tax bases, have experienced the most strain. “Local general governments (which exclude school boards) have seen revenue growth lag behind expenditures for the last three years, resulting in a deficit of $41 million – the first in five years,” states the Statscan report. “In 2002, municipal revenue increased by $666 million or 1.4%. An $815 million increase in property and related taxes, the primary own source revenue of municipalities, helped prevent the deficit from being larger by compensating for a reduction of $302 million in provincial transfers. The 2002 deficits are mostly concentrated in Ontario (-$314 million), British Columbia (-$199 million) and Quebec (-$155 million.) Alberta ($686 million), Newfoundland and Labrador ($37 million) and Saskatchewan ($27 million) were the only provinces [where local government were] recording a surplus.”

The report records the extraordinary decline in provincial transfers to local governments – from supplying 25 per cent of total municipal expenditures in 1992 to less than 15 per cent in 2002. While some provincial politicians claim they have suffered a decline in federal government transfers, that decline is quite limited – from 18 per cent of total provincial expenditure in 1992 to 16 per cent in 2002.

The Statscan report can be found at http://www.statcan.ca, click on `The Daily’, scroll down to recent issues and click on June 18, 2003.

3. Band-aids for the City

The Federation of Canadian Municipalities has recently popularized the advertising campaign it is proposing for its members, “Stronger Cities Stronger Canada” which features a photo of cracking cement being held together with a band-aid. The campaign argues that local governments are facing a $57 billion repair bill to fix aging infrastructure which can’t be funded by property taxes alone. The campaign hopes to pressure MLAs and MPPs into action.

Recent data presented from the polling firms Cameron Strategy Inc. and Probe Research Inc., discussed at Mayor Glen Murray’s Creative Cities Conference in Winnipeg in late May, shows that about two-thirds of urban Canadians think senior governments should be spending more on cities, and an even larger number believe senior politicians should be paying more attention to cities. According to recent polling, more than 80% suggest that the gas tax is the key tax to use for transportation infrastructure.

A summary of the poll, which was done across the country, can be found at http://www.probe-research.com, click on `News Releases’ and scroll to February 17, 2003.

The polling data also concludes that at least half of those living in cities think that they receive good or very good value for money spent by local government. This compliment creates something of a conundrum - if people are so content with their local governments, how will they create enough muscle against senior governments to fix something they think is not broken? It is hard to argue successfully that there’s a big problem with something that works reasonably well. This may explain the reluctance of senior federal politicians to jump to attention when local governments say they need more money.

Perhaps the FCM campaign will shed some light on the comparative strength of these two different (competing?) ideas – that city residents generally think their cities are well run, but they also think they need more financial support from senior governments.

3. 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.
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