MacPherson-Ruddy-Macdonald: New City Charters Could Mean New Taxes

Soon, the public will finally get the privilege of knowing more about what the premier and big-city mayors have been discussing behind closed doors for some time: the 'fiscal framework' of city charters.

For several years, Alberta's big-city mayors have been pushing various premiers for more tax powers.

Finally, it seems they've found a willing dance partner in NDP Premier Rachel Notley.

Despite calls from several advocacy groups for citywide referendums before any new tax powers are granted; despite the past three premiers either saying no or demanding referendums themselves; and despite BC Premier Christy Clark giving a vote on tax hikes to city residents in our neighbouring province, directly consulting the public has been brushed aside as an inconvenience for Alberta politicians.

Aside from — or perhaps in addition to — new tax powers for revenue-hungry big-city mayors, the idea of revenue sharing has been proposed.

Calgary Mayor Naheed Nenshi describes this as "a percentage of the province's revenues flow(ing) to the cities every year, no matter what."

Just like when politicians refer to taxes as "tools," or "revenue mechanisms," or "levers," or whatever the word of the day happens to be, if it looks like a tax and it stings like a tax, it's probably a tax. Given the province's financial situation, revenue sharing could be a back-door tax by another name.

Here's one big problem: the province has a more than $14-billion deficit, when accounting for infrastructure spending. That's a big hole in the budget that the finance minister, so far, has no real plan to fill.

Unless the province's green energy subsidies are going to fund the creation of money trees, any new spending must come from either higher taxes on Albertans today, or increased debt (higher taxes on Albertans tomorrow).

Given that Alberta Finance Minister Joe Ceci (the minister now heading up the city charter file) has increased program spending and increased taxes during the economic downturn, perhaps increasing spending further to funnel cash to the big cities won't be much of a concern for the government.

But it should be a concern for Albertan taxpayers and businesses, because the provincial government doesn't have any extra cash lying around — and neither do Albertans.

The real elephant in the room is city spending. As the big cities push for further increasing taxes on either their own residents or on all Albertans, city spending has been increasing in both Edmonton and Calgary at an unsustainable rate.

Real operating spending increased by 66% in Calgary over the past 10 years, while population growth only increased by 28%. In Edmonton, real operating spending increased by 70% while population growth increased by 32%.

Here in Calgary, city council continues to spend tax dollars on fancy office renovations and golf courses.

It's time for councillors to ask: what is a core service? Instead of continuing to raise taxes on residents, where can they cut back?

In the meantime, taxpayers and businesses are left without knowing the actual financial consequences of new tax powers or special revenue sharing for the big cities.

The lack of transparency around the city charter process has been unacceptable. Without having a say in the matter, residents should watch out for tax hikes by another name.

'See Charter Think Tax' is an Alberta-based coalition demanding taxpayers and small businesses have their say in any new city tax powers.

The coalition is comprised of the Canadian Taxpayers Federation, the Canadian Federation of Independent Business and Common Sense Calgary. Sign the petition calling for a referendum before any new tax powers at www.SeeCharterThinkTax.ca.

Paige T. MacPherson is Alberta Director of the Canadian Taxpayers Federation; Amber Ruddy is Director, Provincial Affairs, Alberta, Canadian Federation of Independent Business; Kathy Macdonald is the Executive Director of Common Sense Calgary.