Imagine our various levels of government as being like the decks on a B.C. ferry. The federal government would be the ship itself, the provinces would be the upper passenger decks and the municipalities the car decks.
Keeping with the analogy, imagine increasingly over the years the car decks have been expected to take on more and more of the ship’s weight. The passenger decks, which used to get more structural support from the larger ship, have weakened so fewer passengers can be supported on those floors.
And the passengers are grumbling about the cost of the ticket.
This is the scenario that leaders of municipalities and academics who study governments say they are seeing play out at the local government level.
The District of Squamish, for example, is bowing under the weight of paying for many services that were once covered by other levels of government, according to Mayor Patricia Heintzman.
“There are definitely things that are directly downloaded onto us,” she said. “All of a sudden you are responsible for dikes, or you have to take over these orphan bridges.”
In 2005 amendments to the provincial Drainage, Ditch and Dike Act meant that while the district still received some funding for dikes, it also came to own the infrastructure.
“Prior to 2005, dikes were a provincial asset, and now they are a municipal asset and we are responsible for them: upkeep, maintenance, replacement and all those things so that has been a huge expense and probably one the normal taxpayer wouldn’t know used to be done predominantly by the provincial government,” Heintzman said.
According to the Federation of Canadian Municipalities, local governments own more than 60 per cent of the country’s infrastructure but collect just eight cents of every tax dollar paid in Canada, with the other 92 cents going to federal, provincial and territorial governments.
Heintzman said indirectly there are policy decisions of other orders of government that end up costing the district.
“For example, chain of custody issues at the RCMP… it cost us about $130,000 to put in cameras so that we could have a visual chain of custody within our police station. So new rules come in and they cost us money,” she said.
This year, Heintzman, said the RCMP have to have C8 carbines, high-powered assault rifles, and that cost falls to the district.
“I am not necessarily begrudging these decisions, I think most of them are needed, but they are decisions made by other orders of government or other agencies that get put on our taxpayers and we don’t really necessarily have the ability to say no,” she said.
The province weighs in
According to Coralee Oakes, provincial minister of community, sport and cultural development, the B.C. government has since 2001 provided more than $3 billion to local governments, in addition to existing funding.
“We know that all levels of government face tough questions about what is affordable, and set priorities for what programs they can afford. We also believe that every level of government should seek opportunities for economic activity that can support community revenues and increase the property tax base,” Oakes said in an emailed statement.
Jordan Sturdy, member of the legislature for West Vancouver-Sea to Sky, has been on both sides of the funding debate. Sturdy was mayor of Pemberton for eight years before running for provincial government.
“I recognize that municipalities are the front line – they are the ones that deal with the majority of services that a taxpayer or consumer uses on a daily basis,” he said.
Communities like Pemberton and Squamish are especially challenged when it comes to rapid growth and keeping up infrastructure, he said.
“It is an interesting discussion: Where should those dollars come from? Should they be fueled by that growth or should there be revenues coming from other levels of government that go back into that sort of infrastructure funding, be it water and sewer, be it diking?” he said.
Sturdy said the federal government has gone some way to increasing transfers to the provinces over the last 10 years, but more could be done at the national level.
“I know what your municipality does, and I have a pretty good sense of what the province does with our 25 per cent of the revenue, but what has your federal government done for you today?” he said.
The Feds have their say
John Weston, Conservative member of Parliament for West Vancouver – Sunshine Coast – Sea to Sky Country, said B.C. is receiving more money than ever before and much of it is more predictable than it’s ever been.
“B.C. is receiving 34 per cent more money than when the Liberals were in power,” he said, referencing $33 billion in the Building Canada Plan in 2007 and a 2013 $53 billion investment in infrastructure over 10 years.
Funding from the gas tax fund was doubled to two billion per year, made permanent and indexed at two per cent per year beginning 2013-14, he said, “so that allows municipalities to budget better than they ever could before.”
Expert offers solutions
According to Charley Beresford, one of the authors of the 2014 report Who’s Picking up the Tab? Federal and Provincial Downloading onto Local Governments, provinces and the federal government have more sources of revenue than municipalities and so more of an ability to manage expenses.
“The federal and provincial governments have other revenue tools, including income tax, which is more along the ability to pay. They also have a larger regulatory tool kit,” she said.
Beresford’s report recommends there be no transfer of responsibilities to local governments without funding or revenue streams; a review of municipal funding models, stable revenue as opposed to grants; and considering constitutional recognition of local governments with rights, powers and responsibilities.
Currently there is a global push for cities to have more say over funding and revenue streams.
“In the [United Kingdom] they are just about to consolidate some larger city areas and give the mayors more powers to deal with issues,” said Beresford.
In the meantime, the primary source of funding for Canadian municipalities is property taxes. Where individuals may also see downloading is in user fees at the local recreation centre, “because that is where municipalities have had to turn is the recovering of fees and funding for fees and services,” said Beresford.
