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Canada: the cities look for more power

In August of this year, a meeting took place that provides an excellent snapshot of the changing status of Canadian cities. The ministers in charge of municipal affairs in the ten Canadian provinces gathered to discuss mutual concerns and especially the need for more affordable housing. Federal minister of housing Alfonso Gagliano attended to present a federal proposal to spend CDN $680 million on new housing over the next four years. In the 70s, the federal government had contributed to the construction of 25,000 new housing units a year, but by the mid 90s it had completely withdrawn from new housing construction. So Gagliano’s presence at the meeting with the offer of new federal housing money was a major event. The ministers met in Ontario, Canada’s most populous province. But instead of choosing to meet in Toronto, the dynamic provincial capital and the country’s largest city, the ministers gathered in London, a small sedate city in agricultural southwestern Ontario. London is more in tune with Canada’s rural past than its industrial and electronic future. Jack Layton, the president of the Federation of Canadian Municipalities (FCM), which represents over 1,000 Canadian cities containing over 80 per cent of the country’s population, went to the meeting and, according to him, made significant headway. However, Layton concedes he didn’t actually sit at the table bargaining with the ministers. What he did do was stay in the same hotel and he and a small FCM delegation were able to do some “vigorous lobbying”—often literally in the hotel lobby. In the end, Layton and the city contingent delivered an ultimatum to the federal and provincial ministers: expand this new housing program so that it serves people at the lowest level of the income scale, or the cities will not participate in it. The ministers agreed to reconsider and meet later in the year. So although the legal status of cities within the Canadian federation has not changed, in the practical world of day-today politics, the upper levels of government are giving de facto recognition to the growing importance of city governments. “There is new energy in cities,” Layton says. “The upper levels of government are realizing they can’t take us for granted any more. We are the people who deliver their programs on the ground.” Creatures of the provinces Legally, though, Canadian cities remain at the very bottom of the constitutional pecking order. They have no rights of their own. Cities are completely subservient to provincial governments. The British North America Act of 1867, which formally brought the colonies together to form the Canadian federation, made cities the responsibility of provincial governments. By the middle of the 19th century, colonial cities in British North America had been gaining the right to elect their own councils rather than have councils appointed by colonial governors. But the British North America Act gave the provinces absolute authority over these elected city councils. The provinces enacted municipal acts handing down to cities the authority to provide basic municipal services—and to pay for them by levying property taxes and imposing service charges. But these municipal acts tended to be restrictive rather than permissive. As municipalities grew and citizens demanded a greater variety of services from local governments, municipal councils had to get provinces to amend municipal acts or pass new legislation. This could be a time-consuming and sometimes humiliating process. The city of Toronto used to have to get provincial permission to put in a new traffic light. Britain retained the formal power to approve amendments to the Canadian constitution until 1982 when it was “repatriated” to Canada. (From 1931 on, the British government accepted all Canadian government requests for amendment). Since 1982, there have been several federal-provincial conferences to rearrange power sharing, and there were two major attempts at “omnibus amendments” to the constitution: the Meech Lake agreement in 1990 and the Charlottetown accord in 1992. Both of these attempts failed. Through all this turmoil, the status of cities remained unchanged. De jure, they are still the “creatures of the provinces.” However, in the last decade, the cities’ de facto status has begun to change, at least in relationship to their provincial governments. Leaner, meaner municipalities In the 90s, the federal government began to fight its debt problems by cutting back Federations volume 2, number 1, november 2001 on “transfer payments” to provinces. The provinces, in turn cut back on their grants to municipalities. Professor Harry Kitchen of the University of Waterloo calculates that within a decade, provincial grants as a proportion of municipal revenues fell by a third—and they have continued to fall. In Montreal, provincial contributions to transportation fell from 33 per cent to 20 per cent. In Ontario where the “downloading”, as it is called, has been most dramatic the government turned all subsidized housing and almost all provincial roads below the expressways over to local municipal and regional governments. The province also withdrew all financial support of local public transit and long distance commuter transportation. The province removed some of the cost of education from the local property tax and claimed this gave municipal governments “room” to raise enough to meet their new responsibilities. When this downloading began in1997, Ontario Premier Mike Harris claimed it would be a zero sum game and municipalities would not actually have to increase taxes to pay for all these downloaded responsibilities. But property taxes have begun to creep up in Ontario municipalities—in some cases by more than 10 per cent. As provincial governments cut back the transfers, they began loosening the legal controls. They have begun rewriting municipal acts to give cities more independence. In Newfoundland, the act gives municipalities a clear authority to raise money through an array of property and business taxes and user fees; the Nova Scotia act extends the range of user fees; the Alberta act allows municipalities to partake of “natural person powers.” Urban and constitutional experts have been debating how far “natural person powers” extend. In the fullest meaning of the term, cities would have all the rights to act that a private individual enjoys. They could borrow money, form partnerships with private companies and get into money raising enterprises—all without being required to get permission from their provincial governments. No province has gone this far. But natural person powers have become an ideal that cities are reaching for. In British Columbia, the province has undertaken to work directly with municipal officials in a joint council and agreed to a “Protocol of Recognition” that binds the provincial government not to take any action that would have an impact on cities without first consulting city governments. Of course, British Columbia can still act arbitrarily even after consulting with municipalities, but as Richard Taylor, the executive director of the Union of British Columbia Municipalities put its, “This is symbolic of the growing power and autonomy of cities, even if we are not yet recognized as an order of government.” In Ontario, the new municipal act is still a work in progress. But after considerable pressure from the Association of Municipalities of Ontario, the provincial government has agreed to withdraw a “notwithstanding” clause that would have allowed it to override any municipal actions. However, it remains to be seen whether the new act will entrench some powers for municipalities or still allow the province to overrule them. Right across the country, Canadian provinces are writing legislation that gives cities greater freedom to act. It is still a long way from recognizing cities as an order of government with rights written into the Canadian Constitution. But cities are gaining momentum. Twenty years ago, the Federation of Canadian Municipalities had a staff of seven and a budget of $280,000. Today, FCM has a staff of over 100 and a budget of over $20 million. In the last three years, the FCM’s membership has virtually doubled, from 600 to over 1,200. Moreover, the Federation of Canadian Municipalities has developed a caucus of “big city mayors” that meets regularly to make demands on the federal government. Their meetings have begun attracting media attention, compelling upper levels of government to respond— even if they are so far resisting demands for greater funding. Layton, the FCM president, is an active member of the Toronto City Council. He has been seen as a potential future mayor, although the word around Toronto City Hall is that he has become more interested in the national scene. Layton is also a prominent member of the New Democratic Party—a moderately social democratic party. The NDP has been all but wiped out in recent federal and provincial elections, but its members are re-emerging as active city politicians, particularly in Toronto. Traditionally, national parties have kept out of city politics. Canadians tend to cling to the idea that city politics are somehow above party politics. They don’t like their local councillors to wear party colours. But now that the NDP is beginning to play a prominent role in the Federation of Canadian Municipalities, it’s hardly likely that the other national parties will cede this newly emerging field of national urban politics to the left wing. In Ontario and Quebec, the provincial governments are forcing cities to merge with the suburban communities around them. These shotgun weddings are creating some regional municipalities that contain more people and work with larger budgets than half the Canadian provinces. So it seems that the issue for Canadian cities is not whether they will ever be recognized as a level of government and a partner in the Canadian federation—but how and when this will happen. Federations volume 2, number 1, november 2001