Canada must “review” municipal financing model: federal housing minister

Column: Many municipal leaders at this week’s conference said they welcome both new immigrants and more housing, but they want to know how they are supposed to pay for the infrastructure and amenities to accommodate both.

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Canada’s Minister of Housing and Infrastructure says the country needs to “review how communities receive funding at the municipal level.”

Sean Fraser made the comment Wednesday to a crowd of hundreds of British Columbia politicians and municipal officials. Many audience members had spent much of this week similarly arguing that British Columbia municipalities need a reworked, more reliable funding stream from Ottawa to support the infrastructure and services needed to accommodate expected population growth.

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So while some of them might be happy to hear Fraser talk about the need for “a new framework for financing municipal growth,” his comments did not suggest that change would come soon.

Fraser addressed an audience who came from around British Columbia to gather at a downtown Vancouver convention center. His comments came near the end of a two-day housing summit convened by the Union of British Columbia Municipalities.

The conference comes as Canada’s federal government has set immigration targets that put Canada on track for record population growth (most newcomers arrive in urban centers like Metro Vancouver) and sweeping reforms. British Columbia government’s housing policies are forcing cities to densify and boost housing production.

A common theme throughout this week’s UBCM summit was that many municipal leaders say they welcome both new immigrants and more housing, but want to know how they are supposed to pay for sewer lines, infrastructure transit and basic services to accommodate both.

Penticton Mayor Julius Bloomfield asked Fraser if the federal government was willing to consider a “steadier revenue stream for municipalities to cover infrastructure costs,” rather than forcing them to rely on “intermittent subsidies, which make it difficult to long-term planning. “

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In response, Fraser said he is “open to very new types of ideas” about how the federal government funds municipalities’ infrastructure needs, but that the government has not “necessarily made decisions about what they will look like.”

Municipalities “are increasingly looking for that long-term certainty and a new framework for financing municipal growth,” Fraser said. “I’m starting to ask myself more and more questions about: ‘How can we provide that certainty, while still ensuring that the federal government will get the return on investment that we want to see with sustained investments in municipal infrastructure?’ ?

“I think we need to review how communities are funded at the municipal level in this country,” Fraser said, adding that the answer will come from “bringing all three levels of government together to understand what the long-term vision is for your community.” .”

Fraser was talking about the need to bring together different levels of government in a room full of people who had spent the last two days talking about their desire to see the same thing.

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Fraser was welcomed on stage by the president of UBCM and Coquitlam County. Trish Mandewo, who at one point quoted an old maxim: “As you know, we like to say, ‘The federal government has all the money, the provincial government has all the power, and the local government has all the problems.’”

Mandewo’s comment represents a long-standing complaint of Canadian municipalities, which have limited tools to generate revenue, as most cannot collect income and sales taxes and therefore rely heavily on taxes and property taxes, such as taxes on new developments.

The Federation of Canadian Municipalities has estimated that local governments are responsible for 60 per cent of Canada’s infrastructure, but receive about 10 cents of every dollar collected in taxes.

Last year, Metro was considering raising rates imposed on new residential developments to allocate $11.5 billion in infrastructure needs, including sewer and water facilities and parks, to accommodate the region’s expected population growth.

With unusually large fare increases (up to 255 percent) being considered, Fraser wrote a letter to Metro’s mayors, administration and board members, urging them to think twice.

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“Significant increases in development charges have the potential to discourage development,” Fraser wrote, warning that it could prevent housing construction at a time when “we all know we need to build more housing and we need to do it more.” fast”.

Fraser encouraged Metro to delay fare increases. It was an unusual move for a federal cabinet minister to intervene in a regional government decision. Some members of Metro’s board of directors, made up of locally elected mayors and councilors from the region, were unhappy with the minister’s approach. In a split vote, they rejected his request.

At Wednesday’s UBCM conference, Fraser addressed a packed room that included many of the same Metro politicians who months earlier were angered by what they saw as his intrusion into their affairs.

“It is through engagement with organizations like this across the country that I believe we can reach agreement on what the long-term plans should be for a different funding model for municipalities, which is a more consistent source of revenue and predictable beyond what property taxes can come out of,” Fraser said.

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