posting
01-15-2008, 09:34 PM
Should Kingston City Council support a local 1% tax to assist with municipal operating and infrastructure costs?
Canada - Cities should share in provincial taxes: Board
January 15, 2008
Toronto Star THE CANADIAN PRESS
OTTAWA – Canadian cities should be given the power to levy up to one percentage point of provincial sales taxes to curb revenue shortfalls, the Conference Board of Canada said today.
The federal government's one-point reduction of the GST on Jan. 1 ``has created room for provincial governments to fix the fiscal imbalance of cities," the Ottawa-based think-tank argues.
"Sustainable prosperity for Canada in the long term depends on the prosperity of our cities," Conference Board president Anne Golden said in an interview.
"And right now, our cities are not prosperous."
The proposed additional tax would be administered by the provinces but set by the cities, which "would support the principle of accountability that is lost when funds are levied at one level of government and transferred to another," the Conference Board says.
Provinces without sales tax, such as Alberta, could use another tax in its place, said Glen Hodgson, one of the authors of the report.
"We think cities need to have access to what is called a growth tax. Obvious candidates, sales tax is there first, but it could be an income tax," he said.
"The key, though, is you've got to have direct access to the tax. It's not good enough to say, 'We going to transfer the money to you,' because then that becomes a political football."
Toronto, Vancouver, Winnipeg, Ottawa and other cities have called for significant new funding from higher levels of government to help deal with rising local demands for social spending, transit services and infrastructure such as roads and sewers.
So far, however, their campaign for a so-called Cities' Agenda has not yet met with much success.
The Conference Board also recommends that the federal and provincial governments resume funding programs and services they have shifted to municipalities over the past 15 years.
But it adds that local politicians "must use the fiscal tools available to them" – including higher borrowing and residential property taxes, user fees, tolls and private-sector involvement in public projects.
Toronto Mayor David Miller, who spearheaded a campaign to wrest one cent of every six cents collected in GST from federal coffers, welcomed the Conference Board's recommendation.
"From my perspective, as long as it's national, whatever the federal government would legislate to give the equivalent of one cent of the GST to municipalities would be supported by mayors. But it has to be national," he said.
Miller's Toronto city government has already imposed an unpopular new local tax on home sales and other fees in a move to narrow a growing budget deficit. However, the city argues that even more revenue is needed, although critics say City of Toronto spending on everything from wages to programs is out of control and the local government should cut some services and reduce its workforce to help balance the books.
During last fall's provincial election, Ontario Premier Dalton McGuinty endorsed a plan calling on Ottawa to turn over one cent of GST revenues to the province's municipalities – an idea rejected by Finance Minister Jim Flaherty.
The Ontario government says it plans to assume some of the costs borne by municipalities over the next three years.
Steve Erwin, a spokesman for Ontario Finance Minister Dwight Duncan, said the province expects to assume about $935 million in costs from municipalities by 2011.
However, Erwin added there are no plans to turn over to the municipalities one percentage point of the province's eight per cent sales tax.
Similar issues around taxation arose last month in Quebec when mayors of Montreal Island municipalities voted for a motion asking the province to allow them to take over one percentage point of the federal GST, which Ottawa cut to five per cent from six per cent on Jan 1.
The Quebec government rejected the idea.
Catherine Poulin, a spokeswoman for Quebec's Finance Ministry, also dismissed the Conference Board's recommendations.
"It's not in our plan to do it because we do have a lot of measures to help the municipalities and we don't want to raise the tax," Poulin said.
http://n.thestar.com/b/ss/thestarprod/1/H.10--NS/0 (http://www.omniture.com)
Canada - Cities should share in provincial taxes: Board
January 15, 2008
Toronto Star THE CANADIAN PRESS
OTTAWA – Canadian cities should be given the power to levy up to one percentage point of provincial sales taxes to curb revenue shortfalls, the Conference Board of Canada said today.
The federal government's one-point reduction of the GST on Jan. 1 ``has created room for provincial governments to fix the fiscal imbalance of cities," the Ottawa-based think-tank argues.
"Sustainable prosperity for Canada in the long term depends on the prosperity of our cities," Conference Board president Anne Golden said in an interview.
"And right now, our cities are not prosperous."
The proposed additional tax would be administered by the provinces but set by the cities, which "would support the principle of accountability that is lost when funds are levied at one level of government and transferred to another," the Conference Board says.
Provinces without sales tax, such as Alberta, could use another tax in its place, said Glen Hodgson, one of the authors of the report.
"We think cities need to have access to what is called a growth tax. Obvious candidates, sales tax is there first, but it could be an income tax," he said.
"The key, though, is you've got to have direct access to the tax. It's not good enough to say, 'We going to transfer the money to you,' because then that becomes a political football."
Toronto, Vancouver, Winnipeg, Ottawa and other cities have called for significant new funding from higher levels of government to help deal with rising local demands for social spending, transit services and infrastructure such as roads and sewers.
So far, however, their campaign for a so-called Cities' Agenda has not yet met with much success.
The Conference Board also recommends that the federal and provincial governments resume funding programs and services they have shifted to municipalities over the past 15 years.
But it adds that local politicians "must use the fiscal tools available to them" – including higher borrowing and residential property taxes, user fees, tolls and private-sector involvement in public projects.
Toronto Mayor David Miller, who spearheaded a campaign to wrest one cent of every six cents collected in GST from federal coffers, welcomed the Conference Board's recommendation.
"From my perspective, as long as it's national, whatever the federal government would legislate to give the equivalent of one cent of the GST to municipalities would be supported by mayors. But it has to be national," he said.
Miller's Toronto city government has already imposed an unpopular new local tax on home sales and other fees in a move to narrow a growing budget deficit. However, the city argues that even more revenue is needed, although critics say City of Toronto spending on everything from wages to programs is out of control and the local government should cut some services and reduce its workforce to help balance the books.
During last fall's provincial election, Ontario Premier Dalton McGuinty endorsed a plan calling on Ottawa to turn over one cent of GST revenues to the province's municipalities – an idea rejected by Finance Minister Jim Flaherty.
The Ontario government says it plans to assume some of the costs borne by municipalities over the next three years.
Steve Erwin, a spokesman for Ontario Finance Minister Dwight Duncan, said the province expects to assume about $935 million in costs from municipalities by 2011.
However, Erwin added there are no plans to turn over to the municipalities one percentage point of the province's eight per cent sales tax.
Similar issues around taxation arose last month in Quebec when mayors of Montreal Island municipalities voted for a motion asking the province to allow them to take over one percentage point of the federal GST, which Ottawa cut to five per cent from six per cent on Jan 1.
The Quebec government rejected the idea.
Catherine Poulin, a spokeswoman for Quebec's Finance Ministry, also dismissed the Conference Board's recommendations.
"It's not in our plan to do it because we do have a lot of measures to help the municipalities and we don't want to raise the tax," Poulin said.
http://n.thestar.com/b/ss/thestarprod/1/H.10--NS/0 (http://www.omniture.com)