Raising revenue for cities; Federal transfer payments not the only option, says expert

Jennifer Stewart

Toll roads, trash fees and higher taxes.

Trent University professor Harry Kitchen says cities have all kinds of options for raising money short of a bailout from Ottawa.

“I’m actually opposed to a federal government just transferring cash to cities,” Mr. Kitchen said Tuesday from his office in Peterborough, Ont.
Instead, he said, cities should look at:

– Per-bag fees for garbage collection.

– Higher transit fares during peak hours.

– Higher taxes on parking lots.

– Civic fees for vehicle registration on top of the provincial fee.

– A municipal fuel tax, with rates set locally.

– Tolls, or “congestion” charges, on major roads leading into the city.

Mr. Kitchen said being independent from the federal government helps Canadian municipalities become more responsible and accountable.

“First of all, the feds don’t really have a constitutional role in dealing with cities. Second, I think the feds’ role in dealing with the cities is to deal with national issues such as homelessness and aboriginal programs.”

Mr. Kitchen made his case in an article called Financing City Services: A Prescription for the Future, which was distributed by the Halifax-based Atlantic Institute for Market Studies.

He suggests lowering tax rates on commercial and industrial properties and shifting the burden to residential neighbourhoods that need costly services.
Halifax Mayor Peter Kelly said business taxation is already under review.

“The business occupancy tax is being discussed right now and the operational format of the assessment division of the province is also being discussed.”

Mr. Kelly said Mr. Kitchen makes some valid points but he doubts they will solve municipal financial problems.

“We know that there are infrastructure gaps to the tune of $60 billion across this country,” he said. “That’s increasing approximately $2 billion a year.”

Those running against the mayor in the upcoming municipal election also expressed doubt about Mr. Kitchen’s ideas.

“Is he taking into account that the federal government takes a lot of taxes from the municipalities?” said Halifax businessman Victor Syperek.

“If they didn’t collect the taxes, of course we could sustain ourselves. But as long as they’re collecting taxes, we’re just trying to get them back in an equal way.”

“Does this guy have any credentials, because he sounds like a lunatic.”

Mr. Kelly said some of the ideas aren’t possible because HRM doesn’t have “the legislative ability to do so.”

He also said some of the suggestions seem a little backward in their logic, especially boosting bus fares during peak periods.

“Peak hours is when we want people to use (public transportation). To me that would discourage use and put people back in cars.”

Mike Flemming, a bus driver and former Halifax regional school board member, said such ideas would hurt people who are already in financial difficulty.

“What it would do is it would put an unfair burden on those who have the least ability to pay,” he said.

“It might be politically correct but I think he’s smoking some bad dope.”

Mr. Kitchen said existing tax rates and user fees actually hurt the lower class even more.

“A lot of the income distribution issues are such that in fact they tend to benefit rich people instead of poor people when you don’t ask people to pay specific fees.”