McCallion paves way for new debate on taxes

First published: November 16, 2007

Hooray for Mississauga Mayor Hazel McCallion who stood up last week to federal Finance Minister Jim Flaherty and the Conservatives after turning their backs on municipalities. Finally, someone gets it when it comes to taxes.

Mississauga city council approved a five per cent tax surcharge on all property owners to raise $12.5 million to avert a crisis that could send the debt-free city into a deficit in the next five years. Council also passed a 3.9 per cent increase for early next year, as part of an overall strategy to provide basic services.

Frustrated by years of poor funding from provincial and federal governments, McCallion took on the smug Conservatives as only she could. With impeccable credentials as a responsible fiscal manager, her reputation repels criticism like Teflon. For far too long, senior levels of government have downloaded services and responsibilities on to the backs of municipalities without proper funding. Meanwhile, the federal government was swimming in a projected $11.6 billion surplus that was used to cut the GST, income and corporate tax, as well as pay down the national debt.

Yes, this was a strategy aimed at increasing the perception average Canadians were getting a break. But, the reality is far different. Not only does this cynical shell game place undue pressure on the provincial and municipal governments, it also hurts average Canadians.

The Canadian Centre for Policy Alternatives released a study last week saying the richest people in the country pay less tax than anyone else (to nobody’s surprise). The place where most of us are getting hit the hardest is on regressive taxes, like sales tax, licencing fees, gaming and liquor sales, gas taxes and…you guessed it, PROPERTY TAX.

So, while our provincial and federal politicians gloat on their record of balanced budgets and no tax increases, municipal politicians bear the burden of providing an every-increasing list of services. What has exacerbated the problem is local leaders do not have the guts to take the bull by the horns. Sure, they complain. But that is it.

To his credit Toronto Mayor David Miller fired the first salvo, when he tried to raise revenues by levying a land transfer tax and a vehicle registry tax. His first attempts to pass the new taxes were thwarted by the ring-wing elements on council. However, citizens became outraged when services were slashed. Finally, the taxes were passed.

The modern mantra over taxes must end, if we are going to have an important debate about financing our future. We have been brainwashed to believe tax increases are evil. That is not true. Successive governments at all levels play a dangerous game by freezing taxes. Even the ridiculous melodramas that take place in Northumberland County as politicians announce a series of inflationary increases, while approving endless subdivisions and box stores in order to grab more taxes. It is a formula for disaster.

Despite this faulty logic, the infrastructure and services continue to be shaved down and, in some cases, left lagging year after year. The result is a time bomb waiting to go off.

Take London, Ontario, where a 10-metre sinkhole appeared in the downtown core early one morning last week. The flood was a result of aging infrastructure that finally collapsed. It cost the city in repairs; but it also cost the local economy through lost business and damages.

As Flaherty prances around like a proud peacock, municipalities are left to mop up the mess, even in areas of federal jurisdiction. In an even more ludicrous example, neighbouring Hastings County joined with the Quinte Health Care Corporate last week, who runs hospitals in Belleville, Trenton, Bancroft and Picton, to give away up to $250,000 to doctors willing to locate in the region. Specialist get even more. When did health care become a municipal responsibility? Northumberland County has single-handedly paid for the bulk of the construction of a hospital, most of the major equipment and now we have to get involved in bidding wars to recruit doctors.

In the past, local municipal leaders point the finger at the provincial government. But, that is not good enough. As McCallion demonstrated so clearly, it is going to take more guts than most on council are willing to show. First, it will be up to local leaders to stand up against the tired rhetoric over tax increases. A clear-headed public discussion needs to happen and old assumptions must be challenged. Next, the shameful arguments like those that attack police spending while paying for beautification projects, like fountains, must end.

Citizens will pay for services, as long as they understand them. What is most frustrating is the constant manipulation of facts and figures, along with the politicization of decision-making that so often treats citizens like idiots rather than with respect. The days of politicians placing their own agendas in front of taxpayers is long gone. The only ones who do not recognize this are those in power. The rest of us get it.

We end up paying one way or another as service providers are forced to campaign for money. Only two weeks ago, four community groups were before Cobourg council talking about fundraising campaigns: The Ganaraska Region Conservation Authority want to raise $4 million; Northumberland Services for Women hope to raise $1.2 million; Keystone House, a project to help intellectually disabled adults, is looking to raise $5 million; and Northumberland United Way is hoping to fundraise $845,000. No doubt, these same groups will appear before other local councils, if they have not already done so. It is mind-boggling to think we have come to a point where everything from school supplies to protecting women and children are left to the whims of donors. What happens when donor fatigue sets in? If we haven’t hit that point, it must be on the horizon. It is also a regressive way to pay for essential services.

So, all hail Hazel! Maybe she can inspire our local politicians to stop cowering and stand up against those who would try to fool us with tired arguments and no vision for our future.

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