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Ottawa - Canadian municipalities are facing mounting challenges with inadequate funding tools. New ideas are needed, says the Canadian Union of Public Employees.

CUPE has published a guide to assist municipalities in exploring and advocating for progressive revenue sources. Building better communities: A fair funding toolkit for our cities and towns looks at the state of municipal revenues, and offers insight into new and fairer sources.

“The need is urgent. It’s crucial for our social and economic health that new funding sources shift costs fairly onto those who can most afford to pay,” said Paul Moist, national president of CUPE during a workshop launching the toolkit at the Federation of Canadian Municipalities annual conference, held in Niagara Falls May 30 to June 2.

“Unlike other countries, our municipal governments are forced to rely heavily on property taxes and user fees. This is unfair, and inadequate,” said Moist.  “These regressive taxes mean lower-income earners pay a higher share than those with higher incomes, contributing to income inequality.”

Although municipal responsibilities are increasing, property tax revenues don’t automatically grow with the economy like income and sales taxes. These limited revenues don’t cover the long-term costs of operating and maintaining public infrastructure. Municipalities are also struggling with the effects of an aging population, climate change, and the consequences of the growing income gap.

“We need a balanced approach, with greater sources of municipal revenue-generating tools,” said Centreville-Wareham-Trinity Mayor Churence Rogers, a panelist at the workshop.

Rogers, who is also president of Municipalities Newfoundland and Labrador, is helping spearhead a provincial campaign for a new municipal fiscal framework that looks at several revenue sources, including a share of provincial income tax.

“Sharing one per cent of the provincial income tax would significantly increase predictable, sustainable revenues – something that’s desperately needed for municipalities to be able to develop proper long-term plans for infrastructure, staffing, and economic development,” said Rogers.

The toolkit looks at various revenue tools, evaluating each for its fairness, impact on local finances, and ease of use. Building better communities: A fair funding toolkit for our cities and towns is available at cupe.ca/municipalities