New report shatters municipal "8 cent" myth ahead of mayors' meeting
TORONTO, Feb. 24, 2014 /CNW/ - As the country's big city mayors prepare
to meet in Ottawa this week, the Canadian Federation of Independent
Business (CFIB) has released a new report that shows municipal
governments are consistently misrepresenting how much tax money ends up
in their coffers.
While the Federation of Canadian Municipalities (FCM) claims that cities
receive just eight cents out of every tax dollar collected in Canada,
the actual number is nearly double that: 15 cents. The FCM leaves out
major sources of revenue, including transfers from provincial and
federal governments, from its calculations.
"This eight cent myth is used at every municipal meeting to support the
story that municipalities are revenue starved," said Laura Jones, CFIB
executive vice-president. "But it's a story that doesn't reflect
According to the report's findings, while transfer payments from senior
levels of government did decrease in the 1990s, overall municipal
revenue increased thereafter as municipal taxes and fees more than made
up the difference.
Currently transfers from senior levels of government are at an all-time
high and inflation-adjusted revenues for Canadian municipalities
doubled in the 31 years leading up to 2012.
"Municipalities do not have a revenue problem," said Jones. "They have a
spending problem. It's one thing to ask for more money if it's needed
and another to spend like it's going out of style, and then cry poor."
Real operating spending (accounting for inflation) by Canadian
municipalities grew by 55 per cent from 2000 to 2011, while the
population grew by only 12 per cent.
CFIB recognizes that some are doing better than others, but calls on all
Canadian municipalities to make it a priority to bring spending in line
with inflation and population growth. One way to achieve this goal is
to work towards aligning public sector wages with private sector norms.
Further, we suggest that senior levels of government freeze additional
funding to municipal governments until spending control is achieved.
To view the full report, visit www.cfib.ca.
CFIB is Canada's largest association of small- and medium-sized
businesses with 109,000 members across every sector and region.
SOURCE: Canadian Federation of Independent Business
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