By JENNIFER LEWINGTON
Tuesday, March 12, 2002
Canadians will learn today how much they've become an urban nation when Statistics Canada releases its first snapshot from the 2001 Census. Look for the population numbers to confirm the quickening pace of urbanization that already has 60 per cent of Canadians clustered in the top 25 cities. What's not so clear is who will release cities from their fiscal and legislative straitjacket -- for the good of the country.
The drumbeat to think differently about Canada's urban regions has been building for some time. After a decade of senior governments downloading services, cities of all stripes are lobbying for more flexible fiscal arrangements in line with their added responsibilities. Think tanks across the ideological spectrum have joined the chorus of calls for reform, documenting the financial and social price paid for inadequate investments in urban infrastructure (waters, sewers, transit) and social services, such as affordable housing.
This is not just a Toronto problem. In 1996, 0.7 per cent of local revenue in Calgary, the fastest-growing city in the country, came from federal government transfers. Calgary officials say that figure is half the average for Canadian cities, and well below the level of 3.3 per cent for U.S. cities and 31.1 per cent for those in Europe. The Federation of Canadian Municipalities estimates that over the past five years, revenue from local governments (dependent on property taxes) rose by 7.7 per cent, compared to 33.2 per cent for the federal government and 26.1 per cent for the provinces and territories.
Ever since it returned to power in 2000, the Chrétien government has been tiptoeing around an urban agenda. The reluctance to act is understandable: No one wants a fight over the Constitution, which makes local government the ward of a province. Instead, the Prime Minister lowered expectations by turning the urban issue over to a Liberal caucus task force -- a low-rung form of political commitment -- which is due to make an interim report next month. From the outset, task force head Judy Sgro (a Toronto MP) put money and constitutional change off-limits, focusing instead on what Ottawa now does for cities but could do better.
Last month, in a tantalizing hint of new thinking on urban issues, Finance Minister Paul Martin declared, "I do believe that cities are entitled to a new deal." What that means is still a mystery. Mr. Martin rejects the cities' demand for a share of the $4.8-billion in gas taxes that Ottawa collects from local citizens, but he promises to look at other long-term sources of funding. At best, that could give cities something they really want -- a predictable flow of federal dollars to pay for infrastructure and other services that underpin healthy urban life.
However welcome, the current federal and provincial capital programs for water, sewer and roads are one-time programs that usually take time to gear up, fall short of needs and wind up as ribbon-cutting ceremonies for ministers. The result, too often, is sandbox politics. Last fall, when the Ontario government got back into funding public transit, Ottawa balked at putting up new dollars right away, complaining that the provincial commitment of $3-billion over 10 years was lower than historic levels.
The provinces play games, too. Although the provinces sought and won control over some aspects of affordable housing, Ottawa offered $680-million over four years for new projects. With matching funds from the provinces, that should mean $1.4-billion to house lower-income families who spend a disproportionate amount on shelter. A lot of provinces signed on -- but it was Quebec that moved fastest to add its own money to federal dollars to address the low-income housing shortage. Other provinces stalled, fiddling with definitions. When governments are more interested in scoring points than making deals, the citizen is the loser.
None of what Canadian urban advocates have in mind requires constitutional change. The new Organization for Economic Co-operation and Development report, Cities for Citizens, puts it well: "To be good places to live, cities need to be competitive: The quality of life is a key factor of competitiveness." The report heralds the rise of the "entrepreneurial city" that puts its social, economic and political resources to work for a livable community.
What if Ottawa were to play a bigger role in the life of cities, in co-operation with the provinces and local governments? Analysis from the Conference Board of Canada makes clear how far Canadians have moved off the land, as either a place to live or as a source of wealth extraction. Last year, the nine biggest cities in Canada accounted for 55 per cent of the value of Canada's goods and services, up from 53 per cent in 1995. Over the period 1995-2001, these same nine cities accounted for two-thirds of expansion in the national economy. Put another way, Winnipeg accounts for 67 per cent of the economy in Manitoba, while Calgary and Edmonton together represent 64 per cent of their province's output.
As a second option, Ottawa should acknowledge the inadvertent impact of federal policies on cities. For example, federal immigration policies put a special burden on cities like Toronto and Vancouver, which receive inadequate federal funding relative to the influx of newcomers. Conference Board president Anne Golden has a follow-the-money solution: Pay cities a federal grant per immigrant to help cover their special needs. At the same time, Ottawa should look for ways to assist cities like Winnipeg (which are keen to attract more immigrants).
Third, the federal government could look for ways that cities contribute to national goals, such as the Kyoto accord on climate change. The Federation of Canadian Municipalities estimates that cities -- a prime source of air-polluting cars -- could help Ottawa and the provinces achieve as much as one-quarter of the agreed targets for reducing greenhouse gas emissions by investing in waste diversion, public transit and other environmentally-friendly initiatives.
Fourth, all levels of government, including Ottawa, should reward innovation and experimentation. A good place to start is housing. The Canadian Housing and Renewal Association has proposed a federally-funded housing foundation (like Ottawa's new endowment for "green" municipal projects) to help break the logjam.
With so much at stake, it's time to view Canada's cities in a new light. Reward innovation and experimentation. End the sandbox politics. Think creatively about new alliances -- be they government, the private sector or community groups -- that will improve the quality of everyday life for all Canadians.