It’s a double election year, which in some ways sucks because it’s hard enough to drive attention to the issues in municipal politics without the circus of a provincial campaign (especially the coming provincial campaign) taking a lot of the energy and attention off local matters.
On the other hand, it does allow us a rare opportunity to connect key issues and dare to get answers from two levels of government at the same time. For instance, how about that infrastructure deficit?
This is a challenge that is before all Ontario cities and towns, each with their own unique list of needs, but with a problem that comes from the same source: there just isn’t enough money to go around.
The question is then, how do our municipalities not only keep pace with repairing our infrastructure now, but how do we find the funding to fill the gap from years of deflecting? Last year, the City of Guelph fell short again by $20 million in infrastructure spending, and that was on top of the first year of collecting the one per cent dedicated infrastructure levy.
This is a huge problem getting bigger. According to City Hall it could be a problem as big as half-a-billion dollars, and so far the best, most controversial solution the City’s been able to come up with is the levy, which collected $2.2 million in that first year.
Once again, that covers one-tenth of the overhang last year alone. If the City spent that $2.2 million, there would still be a deficit over $18 million in infrastructure projects deferred last year.
In the end, the problem with the levy is that the money comes from the same source, and that’s property owners. Why? Because there are only so many ways for a municipality to raise funds. It’s a vestige of days gone by when the really wealthy owned most of the land, most people lived in rural areas rather than the city core, and local governments weren’t expected to do nearly as much as they do now.
Of course, higher levels of government have multiple revenue sources including income taxes, gas taxes, and corporate taxes. The point can be made that there’s only taxpayer, and it has, but the truth is that we all pay into the system differently. If you don’t drive, you don’t have a car to fill with gas, so you don’t pay gas taxes, for example.
So how about a sales tax? A municipal sales tax?
The Association of Municipalities Ontario has made that a proposal, and before you scream at me and my elitist perch that you’re taxed enough, I have a simple question: What’s the other solution?
Taxes are never popular, which is why you rarely see governments, or people running for government, propose raising them. But at the bottom rung of the ladder, there’s only one way for cities to raise money right now, and unlike their counterparts, they can’t run a deficit in bad times.
The AMO proposal suggests a one per cent addition to the Harmonized Sales Tax, which will be dedicated to paying for municipal infrastructure projects and handed out proportionally. For a city like Toronto, that means nearly $500 million. For Guelph, according to the AMO, that means $17.8 million.
Again, from one year of the infrastructure levy, $2.2 million was raised in the first year.
Now that’s not to say that adding another penny on the HST is going to be painless, and certainly exceptions will be made, but it’s worth remembering that the HST was once 15 per cent.
It was a transparent move by a federal government of the time that wanted to make a very visible tax cut that everyone immediately understood and enjoyed, but sales taxes are, if anything, one of the more fair forms of taxation.
It’s even more fair when you consider that a city is not just used by the people who live there, but by the people that commute their daily to work. Or visit there as part of a tournament, convention or vacation.
An MST is, perhaps, the easiest, most immediate way to raise funds, but the provincial parties have been loathed to support it because of that visibility factor. A bump in the sales tax will be seen, felt, and disliked by just about everyone from the Golden Horseshoe to Hudson’s Bay. It will look cheap, it will look like a cash grab, and it’s likely that no one serious about forming a government will promote the idea.
Still, what are the alternatives?
If there are better ideas, let’s make the back-to-back elections a laboratory to create those new ideas, and to test old ones.
We know the problem, we see the problem, but we’re no closer to solving the problem. We’re listening.