The business "drive out the tax" voices are going after the wrong target in Translink.

I can understand Councillor Geoff Meggs’ frustration with the “Drive Out the Tax” campaign, as it does seem to let the province entirely off the hook from the equation that is causing the coalition members such heartache.

It is the province that needs to take a hard look at itself and the burdens unfairly being spread around to sources that cannot possibly pony up enough to bridge these shortfalls.

As I have mentioned in a previous post, I feel that Translink held the Mayor’s Council at Metro Vancouver for a $130 million ransom back in October – give us more cash, or your transit service levels go back to 1990 levels.  This of course was caused by the complete lack of interest in taking responsibility for public transit by the Gordon Campbell administration:

“Cities had been poised to consider a bigger funding increase, stumping up $275 million in large part by charging an annual vehicle levy, provided the province delivers other sources, such as road pricing, to add another $175 million.

That’s off the table because Victoria balked and [Shirley] Bond on Monday continued to argue that local cities can raise more for TransLink from property taxes – an option the mayors reject.”

I do agree that the downtown businesses most definitely played their cards wrong by not protesting as loudly as possible when the province eliminated Translink’s ability to levy  the parking stall tax.  They continue to miss the buck with this campaign, largely out of fear of pissing off the Premier.

So as a result, an organization that is cash-starved gets the brunt of the attack.  Am I suggesting that Translink and the way it is administered can’t be dramatically improved?  Absolutely not.

But realistically, like Meggs suggests, a couple of fired executives and internal cutbacks are not going to solve the chronic crisis of underfunding that Translink currently faces.  We are talking hundreds of millions – even billions – of dollars that need to be kicked in before any 10-year transportation dream can be properly contemplated within Metro Vancouver.

Once again, these kinds of funding gaps are far too massive to expect homeowners, businesses and municipalities to make up.

Ultimately, whatever “restructuring” and “mandate shifting” that I am predicting will occur with Translink over the coming years, the burden of failure will fall squarely on the shoulders of the Premier – an individual that unfortunately continues to fall through the cracks when it comes to British Columbia’s business community.

Retiring Toronto City Councillor Kyle Rae is sick and tired of the hopeless fiscal situation of municipalities.

The political retirement of veteran Toronto City Councillor Kyle Rae is not particularly significant for us here on the west coast as a stand alone story. Rae was Toronto’s first openly gay politician, and spent 18 years as the representative for Toronto Centre-Rosedale.

What is significant from the perspective of Vancouver, and indeed all BC municipalities however, is his reasoning for doing so.

In fact, in light of Vancouver’s current budget crunch, local Councillors and critics alike would be wise to use his experience as an indicator of what could be our future.

The most glaring message that I take from Rae’s words (read ahead) is a warning that municipalities are financially handcuffed by their provincial masters, and that without fiscal responsibility and tough decision making at the civic level, all hope for effective local governance is lost.

Allow me to contextualize.

Most politicians leave office claiming success with their work and a legacy of positive change. The straight-shooting Rae does not fall into this group, as evidenced by this excerpt from an email to supporters:

“I wish I could say that I have left the City in a better state than I found it.”

In fact, Rae’s prognostications about Toronto are very bleak:

“This is my 19th year and I don’t see a very healthy future in the city’s fiscal situation and I’ve spent 18 years trying to improve it.”

Why does Rae feel this way? Well, it has to do with the unbearable costs that have been shifted to Ontario’s municipalities over the past 15 years:

“I arrived before the Harrisite amalgamation and download. Queen’s Park has hobbled the City’s ability to deliver municipal services. Downloading provincial programs and services onto the municipal taxpayer has wrecked havoc on our parks, recreation centres, libraries, community services and culture. The federal and provincial aversion for responsible tax policy and appropriate tax increases has resulted in more than 15 years of cowardly downloading onto the City.”

I am presenting these quotes in order to frame the current budget cutting process that Vancouver City Council is spending ridiculous working hours trying to complete in these final weeks of 2009.

According to a 2007 pre-budget submission made by the Association of Municipalities of Ontario (AMO):

“Canada is the world champion of reliance on property taxation as revenue. At the local level, on national average, property taxes accounted for 40.4% of total revenues in 2004/05. This share has remained stable during the last 15 years, peaking at 43.4% in 1997/98.”

As I have mentioned in many previous posts, municipalities do not exist except by the will of the provinces. They are not constitutionally recognized in this country, and as any civic politician will tell you, the quest for such recognition is solely motivated by the increasing demands upon municipal fiscal resources (or lack thereof).

The Constitution Act, 1867 established the parameters of current federal and provincial relationships with municipalities. Section 92 of the Act sets out the exclusive powers of provincial legislatures in 16 areas, with section 92(8) giving the legislature of each province exclusive responsibility for making laws relating to that province’s municipal institutions.

Unlike their provincial and federal counterparts, municipalities can’t run annual deficits. As mentioned above, property taxes tend to comprise the majority of their revenues, forcing options like using debt financing to fund major capital projects.

Now while the Mike Harris binge of municipal amalgamation and the associated downloading of responsibilities has hit Ontario the hardest out of all the Canadian provinces, British Columbia’s municipalities have not escaped the cowardice of their provincial government.

Resolution B-26 of the recent Union of BC Municipalities (UBCM) convention stated the following:

“WHEREAS over the past few decades the provincial government has downloaded and offloaded provincially mandated services to local government without sufficiently, if at all, matching the services with funding (i.e., roads maintenance and replacement, homelessness, wildlife, policing, mental health and transit);
AND WHEREAS the provincial government may not be aware that their cost cutting measures over the years have resulted in pressures on communities to address the service gaps to the extent that limited local government funds are being used to fund provincially mandated services, negatively impacting a local government’s ability to adequately address core local government services:
THEREFORE BE IT RESOLVED that the UBCM strongly urge the provincial government to cease their downloading or offloading of services to local governments;
AND BE IT FURTHER RESOLVED that any future services, if devolved in any manner, whether subtle or not, must be accompanied by sufficient, sustainable revenues which will be in the control of the local governments”

The results of this phenomenon have been predictable. According to the Canadian Taxpayers Federation, municipal spending in B.C. rose by almost 50 per cent between 2002 and 2008. Property tax revenue jumped by 26 per cent, compared to inflation which rose by about 12 percent and population figures which increased by about 8.5 per cent over the same time frame.

As an example, take a look at the Vancouver budget, which went up by 19.4 per cent, from $773 to $923 million, between 2005 and 2009.

Now, in Vancouver’s particular experience, the Olympics as well as horrible political leadership with little controls over an out of control city bureaucracy also played a part in such a huge budgetary increase.

Nonetheless, with increasing costs shoved off on municipalities (take for example Translink and the Province recently holding Metro Vancouver’s municipalities to ransom) and limitations on revenue generation, something’s got to give.

Property taxes are a losing proposition in the long term, as the regressive and restrictive nature of this form of revenue means that municipalities do not necessarily keep pace with economic growth or inflation, as do income taxes or even sales taxes.

Property taxes are also the final resting place for tax increases, as federal and provincial government have chosen to download in recent memory in lieu of actually raising taxes.

This is the reason that I look at organizations like ThinkCity, which just recently conducted its annual citizen budget survey, and shake my head with their support for the option of raising taxes instead of making cuts to spending.

Here’s a question…if our federal and provincial counterparts aren’t willing to do so to fund the projects and initiatives they deem as important, why should our cities?

Municipalities are no doubt in an impossible situation that is in no way sustainable. Limited revenues that have remained steady over the past decade meet with ever increasing costs handed down by gutless senior levels of government. It is a recipe for disaster.

But until this situation gets fixed, and as long as municipalities are prevented from running deficits, fiscal responsibility is the only option left.

So before we go and place an undue burden on civic taxpayers for the sins of others, isn’t looking internally for cost savings a reasonable course of action?

As a side note, Rae also has words of wisdom for those advocates in Vancouver who are so very enamoured with the idea of wards:

“I’m turning 56 next year and I didn’t want to be like some colleagues who have been there for 30 years and are only interested in their ward’s agenda and have no clue how the city has changed.”

This is exactly what I talked about in this post. Wards have the potential to entrench pedestrian politics and pit Councillors against each other for limited resources. They do not lend themselves well to the concept of a broad and sweeping municipal vision for the future.

Anyways, Rae’s words are prophetic for Vancouver, and should be considered very carefully for a perspective of where we could end up with the continuation of fiscal limitations at the civic level and the introduction of wards as a new electoral system.

So enjoy your retirement, Mr. Rae – civic politics is most definitely a thankless job.

Campbell: "Hey, there's our portion of the stimulus." Harper: "Where?" Campbell: "Made you look. Ha!"

And rightfully so.  It is September 18, 2009, and nine months after the federal budget that promised billions in economic stimulus funding, BC communities are still waiting in limbo.

So, the question that needs to be asked is, who exactly is to blame?

First, let’s look at the federal government.

The budget allotted $12 billion in new funding over two years.  More specifically, the $4 billion Infrastructure Stimulus Fund was touted by the federal and provincial governments as a way to provide short-term stimulus to the economy.

The hoops with the federal government to tap into these funds, however, started right away.

Work must be completed by March 31, 2011; half the funding must be spent during the first fiscal year, ending March 31, 2010; funds were contingent on the provincial and municipal government putting up an equal matching amount.

Then, it took the feds three months to come up with the exact criteria, which was passed onto the municipalities with a three week window in April to submit project proposals.  And, having sat with the City Manager of Surrey in a meeting with Liberal finance critic John McCallum around that time, I can confirm that the confusion that ensued regarding what exactly was eligible was widespread.

But fine…assuming that all went as planned, the timelines – while very tight – could still work out if agreements were signed.

Which then brings us to the BC government.

BC’s share of the federal cash is $450 million.  Thus far, BC municipalities haven’t received a dime of the combined $900 million that would come from the federal and provincial governments.

To be fair, these delays are not exclusive to BC.  In Ontario, for example, the Toronto Star reports that “many regions and municipalities report they have not received any formal contribution agreements from the province, which is responsible for distributing the federal cash.”

What makes us different, however, is while eight provinces have signed agreements to claim their share of the $4 billion in stimulus infrastructure money, BC has not.

In July, they were “really close” and apparently going to put the “pedal to the medal” to get the funds out to communities.

Why is it September without any of these commitments fulfilled?

Well, it is a fudge-it-budget type of issue.  Capital investments are not counted towards the deficit, while operating spending is.  So, to avoid have the deficit from coming in at higher than $3 billion, the BC government has been trying to convince the Conservatives to call its contribution a capital expenditure rather than an operating expense.

With winter around the corner, those projects that haven’t started by now are facing a slower or even stagnant building season, which would virtually kill any hopes of these municipal projects meeting the abovementioned federal deadline requirements.

And yet, Gordon Campbell has promised that “no federal funds will be left on the table.”

So there you have it -  inflexible deadlines and ambiguous and delayed criteria from the federal government, and political hedging and funds upheld by a provincial government more concerned with saving face than getting people back to work.

With $500 million on the table from the City of Vancouver ready and waiting to be put towards the $1.5 billion in proposals sent to Ottawa back in April, for once it isn’t a municipality that is waffling or having difficulty coming up with cash for joint projects.

The UBCM convention is going to be very interesting.

With 61% of all operating costs for Canadian transit coming from passengers in the form of fares, Canada is severely lagging behind in terms of what their governments are contributing:

A substantial gap in government funding for Canadian transit when compared to other countries

According to the Canadian Urban Transit Association (CUTA), between 2006 and 2010, there was a $20.7 billion national transit infrastructure deficit when it comes to fulfilling the basic requirements according to population.

These are compelling figures, giving Metro Vancouver’s mayors plenty of fodder for the upcoming federal election campaign.  Here are five strategies that the Mayors should consider to not only engage the public, but also to secure firm commitments from the leaders of the two main federal parties.

1) Make the business case - Increased labour mobility, less traffic congestion, accessibility equating to increased values for residential and commercial land values, and the fact that higher transit ridership correlates to greater overall economic success and a higher standard of living in the host cities are all a part of making a dollars and cents (sense) argument.

With over 80 per cent of Canadians living cities, municipalities are the economic engines of the Canadian economy, creating jobs, attracting investment, and spurring economic activity through tourism dollars.  Transit investment is a part of making Canadian cities globally competitive.

2) Stand united…FORCEFULLY - Mayors rarely enter the realm of a federal election in any kind of significant fashion.  Outside of former Mayor Larry Campbell’s “barbarians at the gate” comments in 2004 (a down payment on a future Senate appointment), it is hard to pinpoint a concerted effort by Mayors to enter the fray of the debate.

With the country still the the midst of an economic recession, and a significant majority of cities still waiting for infrastructure stimulus funds to flow downward, now is as good a time as any for the big city mayors to stagger press conferences across the 36-day writ period and come out swinging on their top transportation asks.  It is no longer good enough to float ideas – now is the time to make a case for solid, tangible projects waiting for a federal partner.

3) Stress the importance of access to India & China - This might be more applicable for British Columbia, where the epitome of the Asia Pacific Gateway strategy lies.  However, for those who have seen Michael Ignatieff mention India and China trade in the just-released Liberal ad, Canada’s future trading relationships with the two fastest growing economies in the world are going to be a key point of attack on the government.

Similarly, the Conservatives will defend their Asia Pacific Gateway investments, and also stress the importance of opening up new markets.  The country’s transportation infrastructure is a key component of Canada’s trading attractiveness to both China and India (as an example, Prince Rupert is the closest major North American port to Asia and can offer can offer cargo transit times to Chicago from Asian centres up to 60 hours faster than California ports).  Any cities that serve as hubs along this supply route must make the case for transportation investments that they are currently lacking, or lose out on a window of opportunity for what is sure to be a major policy focus of the upcoming campaign.

4) Use municipal taxpayers as leverage – Translink’s latest demands have come out of nowhere for many people, the prospect of increases in the fuel tax and parking sales tax, transit fares, a potential vehicle levy, and most frighteningly for homeowners, a rise in property taxes, are all tools that can be used to demonstrate that the federal government needs to play more of a role in funding municipal transportation infrastructure.

Regardless of whether Translink is off-base with its threats, or whether administrative costs can truly lead to substantial savings within the organization – the $450 million request, or $260 million just to maintain current service levels – is a strategic opportunity that cannot be wasted.

As stated by Surrey Mayor Diane Watts, “We have another million people moving into the Lower Mainland in the next couple of decades.  We can’t go backwards.”

5) Play parties against each other, and don’t be afraid to make recommendations – This might be the most toxic and risky of the strategies, but it is also one that can carries a huge amount of political influence.  A recommendation does not have to be for any one particular party, but rather for the leader and the platform that takes the most notice of municipal considerations and the plight of Canadaian municipalities.

Giving people a window into how their cities would benefit (rolling out the specific projects, city by city) and providing citizens with an idea of what is possible when all three levels of government cooperate, is a tangible tactic that will be taken notice of.  It will also force local candidates to talk specifics instead of using broad generalizations.

So those are just a few of the suggestions I would give to municipal Mayors for what is sure to be a lacklustre federal campaign.  But amidst cynicism, apathy and frustration lies a perfect storm for municipalities looking to make collective waves.