The Trouble with Charters: How Charter Status Can Actually make it Hard for Cities to Raise Money - Report

CALGARY, Jan. 28, 2016 /CNW/ - Calgary and Edmonton want big city charter city status.  In part, because they want the flexibility to be creative with taxation, and less reliant on provincial transfers.  But there are implications to big city charter status – implications that can be studied by looking at the examples of other cities. 

According to two detailed and in-depth reports released today by The School of Public Policy and municipal policy experts Harry Kitchen and Andrew Sancton, the experience has been that charters, and the additional tax powers that come with them are not a silver bullet for municipal financing.  Why?  In short, because while charters give cities that ability to raise taxes, raising taxes is politically painful.  Voters don't like tax increases, and the opportunity to increase revenue is often snuffed out by the threat of voter anger.  At the same time, because cities are given additional taxation room, they sacrifice their ability to go to the province asking for funds.  So, Calgary and Edmonton should be careful what they wish for.  In Kitchen's words, "… if Toronto is any guide, even having a wider scope of taxing powers does not mean a city will take advantage of them. It may be that local politicians relish the idea of new taxes in theory, but recoil at the political reaction the new taxes are sure to provoke."

Author Sancton puts it very clearly when he writes, "virtually none of the desires that Toronto expected would be served by a city charter have been fulfilled. Quite the opposite, it would appear that the dreams once imagined by charter-city proponents have been snuffed out… In the pursuit of more funds for transit infrastructure, the current mayor, John Tory, has returned to the traditional model of attracting funds from higher levels of government, rather than seeking to use any of the revenue tools provided by the City of Toronto Act. It would be truly surprising if municipal leaders anywhere else in Canada sought to emulate Toronto's experience with charter status."

The papers are a "must read" for Albertans interested in the charter city debate, and can be downloaded at http://www.policyschool.ucalgary.ca/?q=research

SOURCE The School of Public Policy - University of Calgary

Media Contact: Morten Paulsen, 403.220.2540, [email protected]