THE BLOG
08/25/2011 02:38 EDT | Updated 10/25/2011 05:12 EDT

Ontario's Municipalities Still Wait For Change

Ontario's provincial leaders are promising a lot this election, but no one is talking about repairing the relationship between municipalities and the province. Sure, everyone talks about "partnerships' with municipalities, but it's not a partnership when the other side has all the cards.

Ontario's provincial leaders are promising a lot this election. It's what they're not promising that is more troubling to me.

No one is talking about repairing the relationship between municipalities and the province. Sure, everyone talks about "partnerships' with municipalities, but it's not a partnership when the other side has all the cards, sets the rules and controls the bank. None of them seem to want to end what is basically a subservient situation for municipalities.

The relationship between Canadian provinces and their municipalities has not changed since the British North America Act of 1867. We are locked into a Victorian-era political and social model that has been outdated for at least a century. But there is no political will at the provincial level to change it. The model benefits provincial and federal politicians, even though it hurts municipalities.

Canadian municipalities are the most immediate, most important, most accessible, and least powerful level of government. Even local planning documents like Official Plans require provincial approval. Although local governments are far more able to respond to and resolve issues than higher-tier governments, local governments often have to go to a higher level to get approvals to act on their own behalf.

Municipalities get the vast bulk of their revenue from property taxes, which in turn is based on an outdated and inefficient model of property assessment. In Ontario, that is even enshrined in law as the Municipal Property Assessment Corp (MPAC). This takes away control of local assessment values from towns and cities and puts it into a centralized system which many property owners liken to throwing darts at random numbers. Property assessment systems like MPAC are not capable of responding rapidly, cannot balance shifts in local economies with ability to pay, cannot react to economic swings like the recent recession, and rely heavily on area-wide real estate sales to determine generic values, rather than on individual analysis.

I've found that at least half the revenue collected by many municipalities through property taxes goes to outside agencies like school boards or upper-tier governments like counties. Provinces love to polish their budgets by downloading services and their associated costs onto municipalities, making it increasingly difficult for municipalities to meet their own internal costs for services and infrastructure through taxation. Municipalities often have to beg provincial and federal governments for funding to meet their needs.

Municipal governments shoulder considerable legal burden over financial management, openness, accountability, in-camera meetings and transparency -- laws that provincial and federal governments don't always have to abide by. Municipalities can't run a deficit, but provinces can, and frequently do. In his recent book, Taking Back Our Cities, author Gord Hume calls this double standard between the rules governing municipalities and higher levels of government "astonishing."

Most municipal politicians are aware of, and agonize over the regulations that hamstring their ability to govern locally. Cities and provincial associations of municipalities argue for changes in governance and taxation to better be able to serve their residents. But provincial leaders show no interest in fixing the relationship that has been broken for more than a century.

The time for change is long overdue. But it's not likely to come under any of the current political leaders, at least not in the upcoming provincial election.