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News

The Big Download Whacks Cities

As feds and province keep cutting, 86 BC mayors meet to share their pain.

By Adam Pez 16 May 2012 | TheTyee.ca

Adam Pez is a completing a practicum at The Tyee. Robyn Smith provided files to this report.

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From housing to health, more and more responsibilities are being shifted down to cities.

Eighty-six B.C. city mayors are huddling in an Okanagan resort over the next three days to strategize and confront what might be called The Big Download.

Most of the discussion will boil down to one thing: money. The federal and provincial governments are making cuts, and analysts say that's shifted the costs and responsibilities of providing many services onto cities, which are struggling to cope in tight economic times.

The so-called "caucus," being held in Penticton, is a first, spearheaded by mayors from some of B.C.'s biggest cities.

In an op-ed that appeared in the Vancouver Sun last week, nine B.C. mayors acting as the steering committee of the caucus called local governments the "front lines" of Canadian government, and warned they face "a time of incredible challenge."

"We have a broad service mandate of core responsibilities that include, but are not limited to, transportation (streets and roads and in some cases, urban transit); protection (including police and fire services); environment (including water treatment and supply, waste water treatment, refuse collection/disposal); recreation and culture (including recreation centres, playing fields, aquatic centres, parks and libraries); land use planning and regulation, building regulations, zoning and regulation in a number of areas ranging from animal control to public health to business licensing," the mayors wrote.

Other levels of governments are reducing services, and more of the core social services fall to them, they continued. 

"That leaves no choice for municipal governments -- we must provide these services that are so needed in our communities because we do not have the ability to download to another level of government."

'New deal' needed: Surrey mayor Watts

Surrey Mayor Dianne Watts, one of the caucus steering committee members, said in a press release that B.C.'s municipalities need to strike a "new deal" with other levels of government in order to continue providing the services their constituents expect, adding that the current model is "broken."

"Municipalities provide the vast majority of the service in areas such as infrastructure while being given only eight cents out of every tax dollar to do it," Watts stated. "We know that taxpayers are at their limit, so it's time to discuss new partnerships with the other orders of government."

Over the last two decades, provincial and federal governments have chosen to reduce transfers to cities as they balance their budgets. The result is that Canadian cities have had to take on more responsibilities and costs as they've grown, said Charley Beresford at the Columbia Institute's Centre for Civic Governance.

The problem has extended over nearly two decades, she said. For example, in the early 1990s, then Liberal federal finance minister Paul Martin cut social housing from the federal budget to balance it, she said.

"That's still a huge problem," Beresford told The Tyee. "The shortage of rental stock and affordable housing is part of the legacy of federal government reducing their commitment there."

As part of a municipal election promise last year, Vision Vancouver council said it would construct over 1,100 new units of social housing. The price tag: $60 million.

And Vancouver, like many other B.C. cities, is expected to pick up more than just the cost of housing. Homelessness, drug addiction and mental illness as well as other public health issues -- normally under the provincial government's jurisdiction -- are all problems seen and felt most acutely in cities, which are hence often tasked with dealing with them, she said.

These costs have to be met while cities face big expenses of their own, Beresford said. Many city sewer pipes, roads and bridges -- built decades ago -- are in need of replacement. Some infrastructure has started to fall apart. The cost cities face replacing that ageing infrastructure will be immense, said Beresford, who added a conservative estimate comes in at $120 billion.

Cities' 'limited toolkit'

The statements by B.C. mayors are a reflection of the pressure on city governments to come up with new sources of revenue, and cities currently have few options, said Beresford.

Eight out of 10 Canadians now live in cities, according to 2006 Stats Canada figures.

But much of the money cities collect to provide for those residents comes in the form of property taxes. That's a "fairly inelastic way" of getting revenue, Beresford said.

"This severely restricted revenue base makes it really challenging. (Cities have) a limited toolkit so to speak," she said. City governments only collect eight per cent of total Canadian tax revenue. The federal and provincial governments, in contrast, pocket 92 per cent of annual tax dollars.

Many of the items covered in the caucus will concern issues with big pricetags. Indeed, the first day of discussions will include a roundtable on how B.C. municipalities can negotiate a "new deal" for city finances.

According to the schedule of events, the mayors will gather tonight at the Penticton Lakeside Resort for opening remarks. On Thursday morning they will discuss their cities' "financial environments" and the need for a new deal to fund B.C. communities. Later that afternoon they will share "challenges and opportunities" in relation to local economic development.

Participating mayors will pay $200 for the three-day conference and cover their own accommodations, according to reporting by the Nelson Daily News.

On Friday, mayors will discuss the scope and frequency of future mayors' caucuses.

'Frank' talk needed with higher levels: Penticton mayor

The caucus and the statements by its steering committee reflect the increased swagger of city governments, said Beresford, who added that confidence is part of a growing trend. Mayors meetings are becoming more frequent as cities recognize their growing importance, she said, noting the growth of cities has lent them increased "gravitas" at policy discussions, and more importance in tackling global problems.

For example, she said, "Cities have the ability to impact about 50 per cent of greenhouse gas emissions just in the way they make their decisions. That's a pretty powerful place to be."

While increased city prominence hasn't yet netted the needed funds and powers from the provincial and federal governments, that is beginning to change, she said. A recent redrafting of municipal powers by the provincial government expanded B.C. city control over revenue; so there's an "appetite" for that expansion, she said.

However, as cities increase their control, some mayors call for a need for increased responsibility.

In Penticton, the caucus's host city, city staff are going to have to "sharpen their pencils" if they're to deal with tight budgets and increased demands for services, said Mayor Dan Ashton.

The mayor said he's somewhat of a contrarian when it comes to concern over the provincial and federal governments downloading costs onto local governments.

He said that Penticton, like many other B.C. cities, will need to take responsibility for providing the services residents want on a tight budget. That means belt-tightening and looking for ways to be creative, he said.

One way cities have coped with their new role has been to turn to private donors and companies for funds. A 2011 report by the Canadian Federation of Independent Business found municipal operating spending has grown nearly fourfold over the last decade. Meanwhile, the report added, contributions from private sources have grown sixfold.

"There's no free lunch," Ashton said.

However, he added, the problems B.C. cities face will require cooperation from other levels of government if they're to be resolved.

He said the time has come for a "frank" conversation with the federal and provincial governments.  [Tyee]

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