Recently overstretched provincial and federal budgets mean increased spending pressures for municipalities. Coupled with limited taxing capacity and a lack of constitutional authority, municipalities today find themselves struggling to meettheir commitments. With revenue generation limited to property taxation anduser fees, and with provincial transfers unstable, municipalities could well find themselves unable to sustain current infrastructure, provide services, and meet federal and provincial standards. In addition, the impacts of a decliningand aging population will affect governments at all levels, and could prove particularly detrimental to already struggling municipalities.

In Put Our Money Where Our Mouths Are, AIMS Author Juanita Spencer argues that this need not be the case. This paper considers a model of equalization where people, not provinces are the recipients. Such an approach would, Spencer argues, address not only theproblems with federal-provincial transfers, but also help local governmentaddress some of their ongoing challenges. Local government could again become the focal point of the interaction between the people and their government foran ever widening array of services. Such a transformation would not only address the looming labour shortage and demographic shift, but it could also supply the solution to the longstanding variance between fiscal capacity and service demands that has placed such pressures on inter-governmental relations since the advent of organized inter-governmental transfers.

Spencer arguesthat local government may be the ideal delivery mechanism to maintain highlevels of needs-focused public services at a time of significant stress on collective resources. By moving both the money and the redistribution of that money to the local level we could leverage private, public, community andindividual assets, to focus on actual need in specific instances and not universal service delivery for notional demand. Thus meeting the constitutional commitment for payments in support of comparable levels of services at comparable levels of taxation in all parts of Canada by adjusting both how we pay and what we do with the money, while maintaining or increasing (if we chose) how much we spend.

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