Thursday, January 10, 2002
Globe and Mail

The bucks should stop here  (Version française)

To repair and reboot our cities, let’s foster new investment and partnerships, says Atlantic Canada economist Michael MacDonald

Canada’s cities are 21st-century economic, social and cultural dynamos trapped within a Victorian political world. Their governments are puny and parochial, their provinces hostile and rural-dominated and Ottawa isn’t even sure it’s supposed to know that cities exist. This is not a recipe for prosperity.

Canada needs a national strategy to make an end run around all of these obstacles, restore civic vitality, make governments clamour to be at the table and, most importantly, open the door to a Canadian urban renaissance. At the heart of this strategy is not government, but partnership.

The federal government is already spending billions in our cities. One of the accomplishments of the Chrétien years has been the disappearance of jurisdictional wrangling. The Prime Minister has decided that he can spend where he wants and for what he wants. The problem with current federal spending is that no city has a handle on what the feds are spending. No one has consulted the cities on their priorities and no one seems to have a strategic sense of the big urban picture.

Unlike our American neighbours who have formed strong high profile partnerships among Washington, their cities and the private sector, our country has no effective urban strategy. Federal spending is unco-ordinated and ghettoized in powerful federal departments. This is a recipe for duplication, waste, and frustration.

An effective, national urban strategy can only succeed under the discipline of partnership (this is the major theme that emerged from the recent Urban Summit in Toronto). Sharing the risk, sharing the rewards in a well-managed strategy. Like venture capital, which is not just about money, these partnerships will be based on managerial and investment expertise. The business case for an urban partnership must separate politics and business.

Our cities used to have charters like private corporations, but today most of our cities are under the jurisdiction of departments of municipal affairs, which are very low on provincial food chains. Most cities feel alienated from their provincial governments. They are rarely consulted and seldom involved in setting funding priorities, and the recent round of amalgamations has antagonized their relationships.

In smaller provinces, moreover, tension arises from the relative affluence of urban centres. Saskatoon and Halifax, for example, are currently forced to be cash cows for poorer communities within their provinces. This is the antithesis of investment.

Cities should not be equated with municipal governments that are under the thumb of the provinces. Cities are full of all kinds of vital forces and organizations that can and should be shouldering more of the burden of the work to make our communities great. While city governments need to be part of the partnership, as in the Greater Halifax Partnership, they can and should be only minority partners.

Commentators agree that the knowledge economy and the growth of the Internet will strengthen the role of cities at the expense of nations, regions and national governments. The federal government must acknowledge for the first time since 1867 that Canada is an urban country and that national prosperity is in the hands of the innovation, creativity and imagination of these urban centres.

Canada is currently among the five Organization for Economic Co-operation and Development countries most reliant on property taxes to support urban services. The amazing fact is that on this limited tax base, Canada’s cities operate in the black. But infrastructure is crumbling and quality of life is threatened. In this decade, the challenge for provinces will be to give cities more autonomy and allow them to broaden their revenue base through innovative partnerships with non-government groups.

Outside the sphere of urban governance, partnerships between the public and private sector are already working throughout Canada. There are great success stories in Vancouver, Calgary, Saskatoon, London, Toronto, Ottawa, Montreal and Halifax, in areas like health sciences, information technology, the commercialization of university research, and economic development. Here are working models that, with innovative tax incentives and tax credits, could form the basis for a national urban strategy.

Urban partnerships are not government-centred. They empower people, organizations and businesses to take the lead in our cities. If governments want people to invest money voluntarily in their cities, they have to listen to what people want. Value must be created for all parties.

Success will demand that we design vehicles that can surmount federal-provincial tensions and narrow definitions of conflict of interest. A number of Canadians are already advocating a federal ministry of urban affairs. The danger is that it could become another jurisdictional debating club for the provinces.

An alternative would be the formation of a non-government League of Canadian Cities. The independent league would be a voice for a new national urban policy, facilitate major changes in current regulations, promote strategic partnerships and business alliances, calm provincial and federal anxieties and encourage citizens and the private sector to invest in their communities.

Urban partnerships are focused on people who can make things happen and not on squabbles about turf, jurisdiction and unproductive ways of government thinking.

Cities are like businesses. They partner easily and they efficiently form national and international alliances. Working together to take on the economic and social challenges of the global economy is, if nothing else, a fresh basis for national unity. This presumes that we are now an urban nation with the courage to cut the Victorian ties that are threatening national growth and prosperity.

Dr. Michael J. MacDonald is an AIMS Senior Fellow. He is the founder of the very successful Greater Halifax Partnership, and he was its first President and CEO.

At AIMS Dr. MacDonald is the project leader for the Canada’s Cities Project and the Atlantica Project.

Dr. MacDonald is an active commentator on contemporary approaches to urban organization and design, and to innovative partnerships that support economic vitality and growth in cities.

E-mail: michaelmacdonald@aims.ca