As thousands of communities across Canada set local budgets for another year, they’re facing the same national challenge:

How to provide the core services our families, businesses and economy need for today and tomorrow, while protecting local taxpayers still recovering from a global recession.

To get there, our communities need an ongoing partnership with federal, provincial, and territorial governments.

Municipalities simply don’t have the tools to do the job on their own.

As chambers of commerce, boards of trade, and Ottawa’s own independent Competition Review Panel have all concluded, Canada’s municipal funding system is unfair, inadequate, and needs long-term reform.

Municipalities collect just eight cents of every tax dollar paid in Canada, with 42 cents going to the provinces and territories, and the other 50 cents going to the federal government.

Despite this, municipalities build and repair more than half of Canada’s public infrastructure, pay the salaries of two out of every three police officers, and meet a growing list of social and environmental responsibilities, many downloaded by other governments.

Canadian municipalities depend overwhelmingly on the property tax, a ‘regressive’ tax that hits middle and lower-income Canadians especially hard.

To fund local needs – and support economic growth – municipalities are forced to rely more and more on those who can least afford to pay.

In many parts of the United States and Europe, municipalities receive a share of tax revenues created by economic growth, to reinvest in the roads, water systems and public transit that both workers and businesses count on.

In Canada, however, even when municipal property taxpayers invest in local projects, the tax revenues flow straight out of the community.

For every dollar a municipality invests in infrastructure, federal, provincial and territorial governments receive a combined 35 cents in new income and sales taxes.

Not a single cent is collected by the municipality itself.

In recent decades, federal and provincial downloading turned Canada’s property tax problems into a crisis.

Downloading is a back door tax hike, pure and simple.

It’s what happens when other governments balance their books by shifting unfunded responsibilities – for national policing, affordable housing, or environmental protection – on to municipalities.

It forces local governments to raise taxes, cut core services and delay infrastructure repairs.

In the 1990s Ottawa and the provinces relied on downloading to reduce their budget deficits.

Municipal finances were stretched to the breaking point. The municipal infrastructure deficit exploded to $123 billion.

In the last few years, all governments have worked together to repair some of the damage done to our communities and put the brakes on the infrastructure deficit.

Federal investments are not only creating jobs, but helping build communities that can meet the needs of working families and growing businesses for many years to come.

As governments work to balance their books during the next few years, they must continue working together to protect recent gains in our cities and communities.

As the budget outlook improves, they must be ready with a long-term strategy to ease the burden on property tax payers and build the infrastructure, transportation networks, and quality of life Canada will need to compete in a tough, post-recession world.

http://timestranscript.canadaeast.com/opinion/article/1367939

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