A taxing issue for our cities

Allow me to interrupt the glowing promises of politicians and wall-to-wall coverage of polls with an actual issue. As a public service, to insomniacs and voters alike, I'd like to suggest that cities should get to raise more taxes. More taxes?!? Yes. Paul Martin was actually right in a recent bloviation: "our municipalities are the most underfunded of the three levels of government, and they have the least amount of say, when the policies of other governments have an impact on them." Or, in English, cities need more money and power.

At Confederation, our five biggest cities held just one-in-14 Canadians, and infrastructure was mostly railways, canals and really bumpy roads between places where people lived. The cities' limited taxing powers were sufficient to their limited responsibilities especially as, in those benighted days, citizens were thought capable of such prodigies as managing local school boards all by themselves.

Today, almost four-in-five of us live in cities and nearly two-thirds in the 27 largest ones. Infrastructure is mostly stuff like streets and sewers in places where people live, and the property tax is not efficient, fair or lucrative enough to fund what cities must do, let alone what they take it upon themselves to do. Thus, last Friday, Mr. Martin unveiled a plan-like object, promising to do a thing at a time in a way: "a Liberal government will, beginning in 2005, set aside for the benefit of municipalities a share of the federal gas tax -- a share that will be ramped up to five cents a litre, or at least $2 billion a year, as soon as we can within the next five years. The precise formula we'll use to get to five cents will be the subject of an agreement."

While we await the details, let me lay out four main options to give cities enough money to remove snow, maintain roads, cut the grass and, if they must, provide social services. The federal government or provincial governments, or both, could provide money to cities with tight controls on how to spend it. They could provide money to be spent in ways mutually agreed. They could provide money with no strings attached. Or the provinces (who have constitutional responsibility for cities) could give cities power to levy sales or income taxes.

Which is best? As so often, it depends on what you're trying to do. I agree with G.K. Chesterton that the true notion of self-government is that ordinary citizens "are to be, within reasonable human limits, masters of their own lives." By that he meant they should have power over "the moulding of the landscape, the creation of a mode of life..."

On that basis I say we nix Option 1. If municipal funding decisions are made federally, you the happy taxpayer become just one of 30 million citizens and perhaps 22 million eligible voters casting ballots on national issues from defence to corruption to health care. Federal elections are not about municipal transit or trash collection. And between elections, you are just one of about 100,000 constituents of an MP who must, in caucus, reach accommodations with colleagues from P.E.I. to Baie Comeau to Comox.

If municipal decisions are made at Queen's Park, the numbers are only slightly better: 11 million citizens and eight million eligible voters; issues from health to education; MPPs with about 115,000 constituents and colleagues from Brockville to Niagara Falls.

Having higher levels of government provide funding based on agreements with cities might sound better because city councillors get some input. But from a voter's point of view, it's worse. You get politicians from all three levels of government scrambling for credit, and no information even about good decisions, let alone weird or bad ones. (My wife wrote a book, Down the Road Never Travelled, about Canada's giant hideous 1993 experiment with this approach.)

The third option, money from above with no strings attached, is far better. You still get little control over the federal or provincial taxes you pay to fund municipal activities. But when spending decisions for Ottawa are made in Ottawa, and for Thunder Bay in Thunder Bay, residents of both have far better control of their local landscape and mode of life.

Even our megacity has under a million citizens and perhaps 700,000 eligible voters and most councillors fewer than 50,000 constituents. (I said far better, not ideal; perfection is not to be found in human affairs and if it were government would definitely still be the wrong place to look.)

So the fourth option is best. Provinces should tax less and give cities the power to tax more so local residents can vote on local taxes and local spending. I know, I know, there's an election on. But we're still allowed to discuss how we might best govern ourselves.

I say let my cities tax.

[First published in the Ottawa Citizen]