Big city mayors say new fiscal framework needed to deal with growing demand for services

Mayors from Canada's larger cities say there needs to be a national conversation to change the fiscal framework to help municipalities deal with a growing demand for services and economic growth in the years ahead.

Kitchener Mayor Berry Vrbanovic is among 23 mayors that make up the Big City Mayors' Caucus (BCMC) advocating for the change to the provincial and federal governments.

The caucus was part of a multi-day Federation of Canadian Municipalities Conference in Toronto discussing the main challenges facing their municipalities, like housing, homelessness, mental health and climate change adaptation.

"We've known this for some time, but [what] is becoming increasingly clear is that the existing fiscal frame work ... has never been designed to handle the kinds of demands that are being put on Canada's cities, like Kitchener," Vrbanovic told CBC News Monday.

"We really need a national conversation to begin among orders of government about how to make the changes that are necessary to make sure that our municipalities have the fiscal tools needed to move forward."

Halifax Mayor Mike Savage, who is chair of the BCMC, highlighted how the role of municipalities have changed in recent decades during a press conference at the event.

He said cities have had to take on additional responsibilities to respond to citizen needs when it comes to health, housing, social services and economic development. Even long-standing city responsibilities like police, waste management and water have become more complex, he said.

"Yet the pace and intensity of those challenges are rapidly outpacing a city's ability to deliver timely, compassionate and effective solutions," Savage said.

"Post-pandemic recovery has led to growth in provincial and federal revenue, through sales and income taxes. Municipal revenue, mainly property tax, have stagnated or declined in the last five years when you adjust them to inflation."

Exploring different options

Vrbanovic said economic recovery out of the pandemic, and climate adaptation, have also been pressure points for the city of Kitchener.

"If cities like us are going to be able to ensure we meet the commitments that all of us have in Waterloo region around the Climate Action Waterloo Region Plan, it's going to mean that we're going to need a different level of support from our provincial and federal partners so that together we can tackle those commitments," he said.

Savage said cities and BCMC want to be partners with the provincial and federal governments in the discussion of a new fiscal framework to come up with sustainable solutions. 

Vrbanovic said cities need access to long-term sustainable funding tools since relying on property taxes is not sufficient.

"For the many decades that we've been dealing with a lot of these issues, we've been doing it based on property taxes and we know property taxes are one of the most regressive forms of taxation," he said.

"I think having a fundamental discussion around what are some of the options on the table and then figuring out what makes most sense for all three orders of government is really where we want to go."