Prime minister's promises don't sway skeptics

By Greg Lakes, editor
Headwaters News
Oct. 2, 2002

Alberta's cities depend almost entirely on property taxes to pay the bills, a system that has grown ever more inadequate with population and economic growth.

And while Canadian Prime Minister Jean Chretien promised reforms more sweeping than any in his administration, details were sparse and critics abundant.

Alberta mayors have been clamoring for new tax tools: They want some -- or all -- of the federal taxes collected on gasoline, for example, or some of the income and other taxes collected by the federal government.

A recent report by the Canada West Foundation examined American cities and found appealing options. The report noted U.S. cities can levy sales taxes and share in tobacco, fuel and income taxes and lottery revenue, and the package generates revenue more in proportion to increases in population and relative wealth.

Edmonton, by contrast, gets 86.4 percent of its revenue from property tax; Calgary's budget is 83 percent property tax revenue and in Vancouver, the proportion is as high as 96 percent.

The foundation suggested cities take the first step by cutting property tax rates in exchange for a share of federal taxes. It's a politically tough concept, as cities would likely have to borrow to offset a short-term loss of revenue, but the report says it would pay off as a long-term investment.

Monday, Chretien's speech thickened the plot with promises of a 10-year program to fix urban roads, upgrade sewer and water facilities, and improve mass transit facilities. His plan also includes pledges of "significant increases" in help for families on welfare, and in health care for everyone.

The speech said Canada's Indians suffer most from poverty, and the plan promised collaboration to help cities with pilot programs aimed at urban Indians.

But specifics, including the costs and methods of funding, won't be released until later this year, at the earliest.

Some observers said the reforms are the most ambitious of Chretien's tenure, but opponents were quick to allege the package consisted mostly of rehashed and unfulfilled promises.

"Competitive cities and healthy communities are vital to our individual and national well-being, and to Canada's ability to attract and retain talent and investment," said Governor-General Adrienne Clarkson, who read the speech in the Senate chamber.

"There are no details and, in most cases, no plans, no price tags and a lot of recycled stuff," said critic and Canadian Alliance Leader Stephen Harper.

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