Municipal governments are responsible for operating, maintaining and rebuilding almost 50 per cent of Canada’s public infrastructure, yet they only directly receive eight cents of every tax dollar collected in Canada.
Making matters worse, the tax revenues Canadian municipalities are allowed to collect—mostly property taxes and user fees—are regressive, taking proportionately more from middle- and lower-income residents. Meanwhile local governments in other countries have access to a much broader range of revenue sources, including income and sales taxes.
This problem has made municipalities more dependent on upper levels of government for transfers. But transfers are uncertain, usually restricted to capital projects, and now come with federal pressure to use public-private partnerships.
A significant fiscal imbalance remains: the municipal infrastructure deficit is at over $100 billion, while the federal government will soon be going into surplus.
To provide better information and education on the subject, CUPE has produced a research report, Funding a better future, and a toolkit, Building better communities. Both provide a strong emphasis on how municipalities can gain more progressive revenue sources that enhance equality in their communities.
Municipal finance can be complicated but these resources help make it simpler. If your local community is facing budget pressures, these tools can be an essential resource to get a discussion started with local councillors and activists.