Tuesday, February 19, 2013

Bankrupting Brampton and Cities

Today I was going through the Brampton Guardian when I got to the Commentary page. Terry Miller, a columnist with the local paper, was discussing Brampton’s budget, link here. Reading Miller it seems that Brampton is faced with the same budget issues it is always faced with. Funding is allocated, there is a proposed property tax hike and while the budget is mostly set there is a massive gaping hole in the projections.

The reason for this is simple – capital funding. Financing the expensive business of building/maintain roads, bridges, and other basic infrastructure is immense. It is critical because a basic level of infrastructure support is necessary for the stable operation of a city. In the case of a city like Brampton, which is undergoing rapid expansion, makes these gaps acute.

Brampton is (tragically) not alone in this. The cities in Ontario and across Canada are dependent upon the support of the provincial and federal governments. However, unlike in American jurisdictions these commitments are not made consistently or within a concrete framework. The city (and others) rely on one-time transfers. As Miller puts it, “The current budget makes the best of what is available but doesn’t provide for the future except for a 1% tax transfer into infrastructure spending, federal gas tax sharing, which could change up or down, and federal provincial infrastructure funding schemes that are usually project based and most often require local financial participation…usually 1/3. But the sources of revenue won’t match the need to keep building the services needed to service this city. Added to those problems are the city’s share for the new Peel Memorial Hospital and Highway 10 transit requirements soon to be unveiled by Metrolinx.

The funding expected from these sources and the expected growth of expenses in Brampton do not come close to matching one another. In less than a decade the shortfall will be roughly a billion dollars that the city alone will have to meet.

The city does what it can to keep taxes low. Brampton, like all local governments in Ontario, is dependent upon property taxes which are highly regressive and punishing to property owners. Sources of revenue such as development fees will one day vanish as the last green-field site turns into homes. Brampton fights to maintain a balanced budget and to not borrow money, but it is left with few choices.

Why do the federal government and provincial governments refuse to support cities? Canada is an urban nation, and despite the need for basic services the higher levels of government choke resources from our local institutions. The Ontario and Canadian governments need to take cities more seriously if they are to thrive and serve their residents. Bankrupting the engines of our economy will do little to solve the bottom line for the province or federation.

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