Amarjeet Sohi, Edmonton Ward 12 Councillor

While our City has made remarkable investments in capital projects and continues to provide many high-quality services, we’re looking at a tough financial future. The City’s 2012 projected debt load is $2.4 billion. Looking ahead to 2012, we estimate that we will be about $10.9 billion short in funding for capital (building/renewal of infrastructure) as compared to what we require. As the City grows and as our roads, sewers and buildings age, it is getting more expensive to pay for services and infrastructure. 

 

There is no single party to blame here – our situation is not due to this or that decision made by the current Council or past ones. Our financial challenges are the result of problems and gaps that have accumulated over decades. One of the biggest problems is the limited choice municipalities have when it comes to how to pay for their needs. 

 

The municipal-provincial relationships in Alberta are still based in the 1867 British North America Act, which set up a paternalistic relationship, with provinces looking out for their municipalities like a parent might. But now, in the twenty-first century, municipalities are taking on ever-growing significance: more Canadians live in urban areas, and economies are increasingly geared toward them. So, doesn’t it make sense to re-evaluate the powers municipalities have, particularly when it comes to funding?  

 

As a City, we get revenue mostly from a combination of your property taxes (54%) and the user fees/permits you pay. But of every dollar you contribute as a taxpayer, the Province gets about 30 cents and the City gets about 5 cents. This is partly why Council just approved a 5.39% property tax increase for this year – we simply don’t bring in enough revenue from property taxes to pay for all services. But we can’t keep relying on property tax hikes and user fee increases every year. We need to work together, as governments, to redistribute the money collected from taxpayers in a way that better represents each government’s responsibility to provide for your most basic, day-to-day needs like clean streets and functional sewers. Municipalities across Canada are now responsible for 53% of the country’s infrastructure – yet we continue to collect only 5% of the total taxes you pay to all orders of government. 

 

There are some promising ideas out there about how we could get a better deal for municipalities, thus taking the pressure off your property taxes. Some suggest getting rid of property taxes altogether and instead using a municipal income tax. Income taxes increase as your wage does, which makes them fairer than property taxes (which can increase even if you’re on a fixed income, for example). Some want 1 cent of the GST to be allocated for funding municipal infrastructure. Cities need to sit down with the Province right away to find solutions for how to fund municipalities into the future.  

 

In this, there is a role for Edmontonians to play. First, it helps if taxpayers understand how taxes and other revenues are distributed in Canada among the federal, provincial, and municipal governments. City staff have collected some helpful information and charts. Take a look, and then talk about it. How do you think municipalities should be funded? How much of your tax dollars should go to each order of government? 

 

Ask the following question of Provincial candidates: What is your vision for ensuring municipalities have sufficient funding in the future to pay for aging infrastructure, critical expansion (e.g., LRT), and top-quality services? 

 

We need a better deal for municipalities, but we aren’t going to get one unless we continue to ask.