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Bill 16 - Municipal Government Amendment Act, 2008

October 15, 2008 - Committee of the Whole

Ms Blakeman: Thank you very much, Mr. Chairman. I am really pleased to get an opportunity to speak in Committee of the Whole to Bill 16, the Municipal Government Amendment Act, 2008. I think this is a really critical topic, the whole area of how we are funding and the tools and vehicles that the provincial government allows through the Municipal Government Act to the municipalities in order to raise funds to pay for their services.

What’s being proposed goes in a small way to address some of the issues, and that is this linear assessment. I know where it will most likely be used because it specifically addresses pipelines, that they can be addressed even if they’re not in use, which is a biggie. For those municipalities that have pipelines running through their areas, this is really important to them. It also allows them to assess things individually, not as a package or as a grouping, if I can put it that way.

Mr. MacDonald: A grouping? What kind of a grouping?

Ms Blakeman: Well, it used to be only in the pipeline as a whole, which might actually be several different pipes that were running, but this now allows them to actually assess based on a single pipeline running through.

What’s underneath all of this are the tools that are available to municipal governments to deal with all of the services that they’re trying to provide. Well, why does that make a difference? It makes a difference because over the last 20 years we’ve seen a significant shift from provincial governments down to municipal levels and counties and districts as well of a number of programs that government is either responsible for wholly and has delegated down or has simply stopped paying for, and the municipalities have picked up the cost of it.

Ms Pastoor: Forced to pick up.

Ms Blakeman: Well, my colleague is raising the issue of being forced to pick up, and I know the municipalities feel like that’s the position they’ve been left in. Because who truly is going to say: “No. We won’t provide any social services. We’re only funded through FCSS, you know, for us to put in 20 per cent of the funding. The provincial government is supposed to be putting in 80 per cent and they’re not putting in that amount of money and the costs have risen, so if we stick to our 20 per cent, then basically we’re going to leave people on the streets here or let them starve or any number of other terrible scenarios.” Of course, the municipalities won’t do that. They step up; they increase the funding. One of the major places that we’re seeing this is in infrastructure funding. Interestingly, there was a question raised in the House yesterday around that. When the government has its backbenchers asking questions, that always tells me they’re a little bit worried about something and they’re trying to get something on the record without appearing to get it on the record.

We did have an exchange that appears on page 1291 from October 14, 2008, between an Edmonton MLA – I think it’s going to be Mill Woods or Ellerslie – and the Minister of Municipal Affairs. He says, well, you know:

Municipalities have the traditional taxation, but they also have access to franchise agreements, development levies, local improvement tax, business taxes, bylaw powers, taxation agreements, business revitalization zone tax, community revitalization tax levy, well drilling equipment tax, community aggregate payment levy.

My goodness, he was very good to know that whole list right off the top of his head. I suspect he had it carefully written out for him. He’s suggesting that municipalities are not going to get any more money from the provincial government because they have all of these tools available to them if they wish to be getting more money.

That sounds on the surface like a reasonable argument, but I’ve been able to read the Canada West Foundation document. I know what fans the provincial government are of Canada West, probably second only to C.D. Howe. So I’m assuming that if I’m quoting from Canada West, I get extra brownie points here because this is such a favoured foundation of the governing members.

This particular one that I’m looking at was published in June 2008 by one of their senior policy analysts and is entitled Delivering the Goods: Infrastructure and Alternative Revenue Sources for the City of Edmonton. Indeed, it does start to talk about this whole issue of municipal financing and what tools are available to municipalities. They note that the city of Edmonton in ’07 was listing that it needed $10.4 billion over that planning time of ’07 to 2016. In fact, they now think that that’s much larger. They only have the funding set aside for $5 billion of that, so there is a cumulative funding shortfall of over $5 billion for the infrastructure that they know about now.

Given that, to meet this kind of pay-as-you-go process, Edmonton property taxes would have to quadruple. There’s only one taxpayer there, so I don’t think that’s going to happen. Well, you know, the minister of finance says that there are all of these different ways the cities could be raising that money. What’s happening here and what’s interesting about this is that the provincial and federal governments don’t have to do anything to make more money because they’re taking a percentage of income tax.

Every time people make more money or more people are working – up until a couple of weeks ago it was a pretty safe bet that people would be making more money and more people would be working – the provincial and federal governments, without doing a thing, make more money because they’re making a percentage of every paycheque from people. So as long as people are working, they’re making money. They don’t have to go back to the people. They don’t have to raise taxes. They don’t have to stand in front of them and defend it in any way, shape, or form. Remember, added to this interesting bit is that the provincial government has chosen to download both infrastructure debt and also a number of service provision programs to the municipalities.

The only one that has limited ability to raise money out of those three levels of government is the municipality. The conclusion that is drawn by Canada West is that, you know, trying to close a funding gap of a significant amount of money, $2 billion annually over that period of time, is a mammoth task. They are saying quite clearly that a new financial partnership needs to be struck with the province, and I agree with that. That’s, frankly, something that I remember bringing forward as part of an election platform in 2001 and 2004 and probably in 2008.

It has very limited revenue sources. Every time all of these other things that are brought forward by the minister come up – the city is already levying all of those taxes, and it is still not enough to pay for the extra load the cities are carrying. It’s not just Edmonton that is affected by this. It’s not enough to pay for all of the extra load that the municipalities are carrying. When I look at the suggestions of what’s coming forward in Bill 16, this is very small, very simple, one tool only in what needs to be a very large and varied tool box and isn’t. The ideas that you can allow linear assessments to happen, that it can be done when something is not actually in use, and that you can do it singly rather than having to wait for multiple pipelines are all excellent resources, but the bill does not go far enough by a long shot.

It needs to take into consideration the kind of load that especially Edmonton and Calgary but also cities like Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat – have I missed anybody? – are struggling with in these issues and trying to make good, prudent decisions in financial management on behalf of their citizens, who, frankly, are our citizens, too. Yet the municipality ends up with all the responsibility, and they’re the level of government that is most front and centre before the citizen. When the citizen looks out their door, they see that pothole, and they think: local government. They don’t look out that door and think: local government, city; oh, yeah, well, they didn’t get enough funding for infrastructure from the provincial government, and the federal government hasn’t been too great in kicking in on this one either. That’s not how people think, so they tend to blame the municipalities, the civic politicians, right off the bat. I’m more concerned because I live in a city, and I live in the downtown of a city. I’m very aware that if my province is going to thrive, we need to be a place where people want to move to and want to stay, that they choose to be here. Frankly, with global economies smart, creative people and people with skills and education can choose to be anywhere. You don’t have to live, you know, next to the manufacturing plant anymore. The manufacturing plant isn’t there. This is a knowledge-based economy, it is a creative economy, and most of these people can work anywhere. How do we create a city where they want to live? That is about providing those kinds of services that attract people, that there’s a buzz on the street.

Members gaze at me with fondness when I talk about the fabulous constituency of Edmonton-Centre. It is a fabulous constituency. It’s fabulous because of the people. That’s what makes my constituency buzz and glow and have so much energy and vitality about it. It’s about the people.

Mr. MacDonald: Is that why so many members of this Assembly want to live there?

Ms Blakeman: Yes. Well, I don’t think that members of this Assembly want to live in Edmonton-Centre, but many of them do live in Edmonton-Centre while we’re in session.

What I see in Bill 16 is a recognition – actually, I’m sorry, Mr. Chairman. I could be reading that in. I don’t see in this bill that there is a recognition that the municipalities need to have more tools at their disposal to be able to raise the money to pay for the services and the programs that they’re delivering. What I see is one tool being addressed very directly.

There is a range of programming that the municipalities increasingly are stepping up and taking over: where we talk about affordable housing or social housing; where we talk about the provision of emergency shelters, including transitional shelters, where we’re looking at sheltering people who are victims of domestic violence; where we’re talking about people transitioning from drug and alcohol treatment beds back into the community. That’s considered transitional funding as well. If we want those people to be back in our society and be successful, that’s the kind of thing you’ve got to look at making available. So there’s housing; there’s social services. My colleague from Calgary-Buffalo is often talking about policing and crime and victims of crime. He’s right. Again, the municipalities are the ones where people are looking out their front door and saying: I don’t see any police officers here; it’s the city’s fault. Well, not necessarily. What we’re getting is very restricted and lump-sum funding now from the province that comes to the municipalities by way of a grant.

Why is this particularly critical now? It’s critical now because we have seen a downturn in the economy. We have seen investments affected. That’s going to affect the cities’ money, all municipalities’ money that’s engaged in any kind of financial instrument, save just sitting in a bank account. That will be affected, and the ability or appetite of the municipalities to go back to the citizens with additional taxes is going to be very limited. I think what I’ve seen is a signalling from the government, and probably what I heard yesterday in the minister’s answer to the set-up for the question – that’s why it was there – was that there will be no money coming from the provincial government towards the municipalities if times get tough. It is a situation of: times are tough and friends are few, especially if your friends happen to be this provincial government. That’s what I’m hearing.

This was a very roundabout route to talking about how beneficial this particular vehicle is expected to be. I think it will be very, very helpful for a small number of municipalities and helpful but on a much smaller scale for a number of other ones. There are a few that will really benefit from this, and that’s great, but to me this bill really shows that we need to take a step back and have a much larger look at that partnership, and it should be a partnership. It should not be an adversarial nyah, nyah, nyah sort of relationship: we’re bigger than you are; we can get away with this. It needs to be a partnership between the province and the municipalities as to how we are providing needed services to our citizens because they’re the same person. I don’t see why they should be left in a worse state because the province decides that they don’t want to step up to the plate for their share of things in joint funding with the municipalities.

I’m willing to support this bill, definitely. I would certainly like to see this bill go further, or I’d like to see another bill coming forward that is really going to address a different kind of partnership. I think what needs to happen and what I am looking to bringing forward as a private member’s bill in the spring is to see that the municipalities get a designated portion of the income tax that the provincial government gets access to. I think that would help our municipalities significantly. It would give them a reliable, stable source of funding. They wouldn’t have to keep coming back with new plans and new projects in order to be able to raise a specific levy for something. It allows them to address the large infrastructure deficits that they’re dealing with. It allows them to deal with things like crime and public security, that have become such an issue for people. It allows us to deal with what we now know – we call it supportive or assisted social services – that understanding we now have or should have that you have to actually assist people who are vulnerable to be able to get to a place where they are going to be able to manage on their own.

Frankly, some people are never going to be able to manage on their own. You can’t take a homeless guy and put him in an apartment and think everything is going to be great. There is a level of service and assistance that needs to go with that. To me this is part of a much larger project, and it needs to be part of a much larger project than a one-off bill like Bill 16 is.

Thank you very much for the opportunity to talk about that, municipal funding overall, and what is possible for the government to do and what I think the state of affairs is. I’m very proud of Alberta. I’m very proud of Edmonton. I’m particularly proud of my constituency of Edmonton-Centre, and I want it all to be better. I want it all to be great. I’m seeing a mean spiritedness and a miserliness that is going to prevent us from achieving that. I think that’s the wrong direction to go, so anything I can say to turn you in a different direction I’m happy to do.

Thank you for the opportunity to speak in Committee of the Whole on Bill 16. Thank you very much.