Today, 86 per cent of Canadians live in cities, transforming urban centres into Canada’s economic engines. Globalization has heightened competition, but the battles waged aren’t among nations, but city-regions and urban economic units.
Cities face many obstacles that impede their growth and prosperity: an over-reliance on property tax, provincial legislation that restricts the type of revenue models and taxes cities may utilize, and the downloading of responsibilities (i.e. - transportation and infrastructure) from other governments.
While the federal and provincial governments are seeing their treasuries expand in response to a growing economy, cities are not. From 1995 to 2000, federal government revenue from personal and corporate income tax grew by 14 per cent and 35 per cent respectively. Manitoba personal and corporate income tax revenue swelled by 16 per cent and 84 per cent respectively. Winnipeg, in comparison, saw its revenue from property and business tax drop by 10 per cent and five per cent respectively.
This scenario is true for many other Canadian centres due, in large part, to civic revenue models, imposed through legislation, that bear little to no direct correlation to economic growth. In Toronto, municipal property taxes comprise only 4.8 per cent of the total taxes paid to all levels of government by an average family. In Vancouver, civic government revenues amounted to seven per cent of total taxation revenue collected in 1999 by the three levels of government; in Calgary, the civic share of taxes was eight per cent in 1996.
Steps must be taken by the federal government, in concert with provincial governments, to properly equip urban centres with the tools to compete.
Winnipeg Chamber of Commerce Recommendations:
- Implement an urban development strategy that addresses the critical role and importance of cities in advancing economic prosperity and quality of life.
- Expand the federal government’s involvement in civic development, in particular, downtown revitalization, infrastructure and transportation.
- Promote among provincial governments the need for cities to have the legislative flexibility to adjust civic revenue models to better link revenue to economic performance, without increasing the tax burden on citizens.
Adopted by the Winnipeg Chamber of Commerce board of directors, July 2001