NEWS

Cities need to rein in spending, says report

05/29/2013 03:18 EDT | Updated 07/29/2013 05:12 EDT
A new report says municipal spending is racing ahead of population growth, adding it's time for big cities to stop asking for more tax revenue and start controlling costs instead.

The study by the Canadian Federation of Independent Business found from 2000 to 2011, municipal spending in Vancouver rose 50 per cent despite a population growth of just 15 per cent.

"Moreover, when considered on a year-over-year basis, inflation-adjusted spending growth in Vancouver was above population growth in nine of 11 years," said the report.

The report also looked at Toronto and Montreal and found the three cities have expanded their workforce by about a 25 per cent over the last decade and the costs of pensions and benefits have outpaced inflation.

"How do we better control spending? At least part of the answer lies in controlling public sector wages and benefits, which represent the majority of municipal costs and are currently far more generous than private sector equivalents," said the report released by the CFIB on Wednesday.

Vancouver Mayor dismisses concerns

But Vancouver Mayor Gregor Robertson was quick to dismiss any suggestion that city spending was out of control.

“Our fiscal record over the past five years is one of the best in Canada, and hysterical claims by the CFIB have no basis in reality,” said Mayor Gregor Robertson.

“Just this year alone, the city paid down its debt by $151 million. Our tax increase was just 1.3 per cent, tracking at inflation and among the lowest in the region.

“The real problem isn’t overspending, it’s the continued downloading of senior government responsibilities onto local governments.

“When our health care system fails someone with a severe mental illness, our police are forced to respond. When the federal government closes our coast guard base, it puts the burden of life safety on our police and fire departments."

Canadian Federation of Independent Business spokeswoman Laura Jones said while she was sympathetic to that argument, it doesn't solve anything.

"It's a little bit like saying, 'I can't do my job, because you aren't doing your job.' And I think it's very confusing for taxpayers."

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