New city tax powers are still on the table

From the Calgary Herald. By By Paige MacPherson, Amber Ruddy and Stephanie Kusie.

Countless Calgarians felt the sting of property tax increases this month. But the tax burden could grow much larger for city residents — before they get a chance to have their say.

The Alberta government recently released its updated Municipal Government Act, the framework managing the relationship between the province and municipalities. Now, Municipal Affairs Minister Danielle Larivee is touring Alberta to hear what the public thinks about the government’s proposed changes.

It was expected that city charters — special agreements that would give the mayors of Calgary and Edmonton historic new tax powers — could be a part of the new act.

Yet the new act made no mention of city charters or new tax powers. It’s worse than we thought: what remains from the last version of the act is the ability for the province to hand new tax powers to big city mayors through regulation — meaning it wouldn’t even have to be a change discussed in the legislature.

On new city tax powers, the government has been suspiciously unclear. But a little digging has revealed that conversations about new city tax powers are likely happening behind closed doors.

When pressed for details at a Calgary consultation session last Wednesday, Larivee revealed new city tax powers are not off the table.

When she was asked, “Given that there are no new tax powers outlined in the act, will you as the minister rule out new city tax powers for cities through city charters,” the minister hedged.

“As we move forward with those conversations, we’ll decide if indeed those unique challenges and unique collaborations (faced by municipalities) need a different fiscal framework,” Larivee said.

Call it a charter, call it a levy, a revenue tool, a fiscal framework, but a tax is a tax.

“We’re just beginning those conversations,” she said, “and certainly we look forward to sharing that information with you once those conversations are complete.”

The government and big city mayors are having conversations behind the scenes. The rest of us can wait and they’ll let us know what they decide.

Handing the mayors of Alberta’s big cities new tax powers would represent a fundamental shift in the way our cities are able to tax residents. That’s why residents must be the ones to decide.

Currently, cities rely on property taxes, which they do little to constrain. Between 2005 and 2015, Calgary’s property taxes have increased nearly three times faster than the rate of inflation. Cities have consistently refused to control their spending.

Add to ballooning property taxes even more taxes — like Toronto residents saw when their government introduced a city charter — and you’ve got an even heavier tax burden on your hands.

Past premiers have been very clear. Jim Prentice, Alison Redford and Ed Stelmach all either said no to new city tax powers, or required citywide referendums first.

When asked by media on Thursday, Premier Rachel Notley made things a little more clear — but only a little.

“The cities, because they are coming to the table as we are, can raise whatever issue they want,” the premier said. “So, if they want to raise it, then it may end up being on the table.”

We know that the mayors of Edmonton and Calgary would welcome the opportunity get their hands on new city tax powers.

It’s time for our provincial government to be clear about new tax powers. Ultimately, this decision belongs to the people. Past premiers had it right.

Don’t let the government pull the wool over your eyes. We should not be satisfied with discussions of new tax powers happening behind closed doors. There’s only one way to truly consult with all city residents on new taxes they’d pay for — and that’s a referendum.

Paige MacPherson is Alberta director of the Canadian Taxpayers Federation, Amber Ruddy is Alberta director of the Canadian Federation of Independent Business, and Stephanie Kusie is executive director of Common Sense Calgary.

Originally in the Calgary Herald.