The federal election is upon us. We can all look forward to more than 2 months of attack ads, debates, and candidates going door to door asking for our votes. While they are out I invite you to speak with them and their volunteers and tell them what you want to see come out of our next government in Ottawa. It’s my hope that you’ll also ask them to consider proper funding for cities while they are there.
In 2007 the Federation of Canadian Municipalities proposed a revenue sharing strategy between the Federal Government (who collect the most in tax of all levels of government) and municipalities. According to FCM cities in Ontario make up more than 70% of our province’s GDP yet municipal governments yet cities collect only 8 cents of every dollar in tax revenue.
FCM proposed that Ottawa fund cities by directing 1 cent of the federal GST directly to cities. The funding would be used for infrastructure projects. In 2007 FCM estimated that funding would be worth $5 billion dollars in 2007. Using that number, a little back of the envelope math suggests that 1 cent works out to around $73 million dollars for the people of Hamilton.
To put that in perspective that would nearly double Hamilton’s current spend on Roads and Transit. This year, the City’s infrastructure spending deficit sits at $195 million. A $73 million boost would certainly help bring that deficit down. As a further benefit we’d see a huge boom to our local economy. A report from the San Francisco Federal Reserve Bank shows that for every dollar increase in infrastructure spending there is a corresponding increase of two dollars in economic activity. That would equate to a net gain for Hamilton of nearly $150 million a year!
Just think about what we could do with an additional $73 million a year. In Hamilton we have sewer and water lines that are over 80 years old. With the funding tools available now we will never be able to replace them all. We have people waiting on our affordable housing waiting lists for over 3 years without being housed. We don’t have the money to build additional units. What’s worse, we can’t even afford the capital repair costs of what we do have.
Hamilton is facing some major infrastructure projects in the coming years including the new water treatment plant at over $250 million and potential widening and installation of new safety equipment on the Red Hill Expressway and the Linc. Without additional funding sources these costs will continue to be placed on the municipal tax levy further driving up property taxes and further damaging Hamilton’s housing affordability.
So this year, when the candidate comes to your door ask them: “What are you going to do to help cities?” Maybe if they hear the question enough, Ottawa will finally get serious about funding for municipalities.
Terry Whitehead is the Councillor for Ward 8 – West Mountain