The Reading Room

URBAN NATION

Why We Need to Give Power Back to the Cities to Make Canada Strong

Jon Linton

Alan Broadbent, HarperCollins
Toronto, 2008
ISBN: 978-0-00-200883-9

The subtitle says it all – we need to recognize cities as the engines of economic growth and give them the power and financial base to enable them to pursue their destinies. Alan Broadbent, long a commentator on Canadian urban affairs, is the chairman and CEO of Avana Capital Corporation, a private investment holding company. He also heads up the Maytree Foundation, a not-for-profit organization dedicated to reducing poverty and social inequality in Canada. From this dual capacity of entrepreneur and social activist, he is a very astute commentator on economic and urban affairs. This is his first book, and it’s articulate and to the point.

His basic thesis is that cities in Canada need a “new deal.” The “old deal,” enshrined in the British North America Act of 1867, dealt with municipalities as simply one more thing in a long list of considerations. Municipal affairs were sandwiched in between section 92.7 (which addressed hospitals, asylums and charities) and section 92.9 (covering shops, saloons, and auctioneers). Yes, section 92.8 was concerned with municipalities – which, at the time, were about as important an entity as asylums and saloons, given that such a small fraction of the population lived in them. The BNA Act gave over responsibilities for municipalities to the provinces, and the oft-heard phrase that municipalities were “the children of the provinces” pretty much reflected the reality at that time. When times were good, and provincial economies were booming, things were perhaps not too bad for the cities, as their “parents” (the provinces) would give them a good allowance: funds for such things as transit, social assistance, etc. However, when times were not so good, the provinces would cut back on the allowance, download responsibilities, and, in many respects, make life very difficult for the cities (the quintessential example being Ontario in the 90s under the Mike Harris government).

Broadbent says that, in the 21st century, Canadian cities need a new deal. “Control of destiny is the heart of the new deal for cities. Cities need to be able to have a vision for their future, to create a credible plan to get there, and to implement the policies and programs that make that future vision a reality. If there is a disconnection in that effective chain, cities will flounder.” (p. 76)

The heart of this new deal is financial. Broadbent maintains that cities in Canada are far too dependent upon the property tax as the main instrument of revenue generation (50 percent of the municipal revenue in Canadian cities comes in from the property tax, compared to only 15 percent for cities in the US, where they have access to a much broader range of tax sources and financial instruments). He argues that municipalities should have the ability to levy income taxes, sales taxes, payroll taxes, and special excise taxes on liquor, hotel rooms, parking spaces, etc. He also advocates use of a much wider range of debt instruments such as public-private partnerships and tax increment financing.

“Canadian cities are making do with less revenue than they need to reach their potential. The large, thriving urban regions have a particular need to be able to invest in those things that will enhance their international competitiveness … They need much broader control of their destinies, and in no area is it more vital than in their ability to raise revenues. They need access to a much broader range of tax and financing instruments, and they need to have authority to decide what taxes they’ll levy, and how much.”(pp. 126-127)

In Chapter 6, Broadbent discusses the internal governance of municipalities. He describes the “weak mayor” system, where the mayor essentially has one vote like any other councillor, and how in that situation they need to be expert in creating coalitions and consensus in order to effect change. This is contrasted against the “strong mayor” system of many US municipalities, where the mayor has much more power in terms of unilaterally making appointments and being able to push through policy. (The new City of Toronto Act gives Toronto’s mayor powers that are, in a sense, halfway between these modes.) He also discusses here the merits of the ward representation system versus the city-wide system, as well as the advantages and disadvantages of the municipal party system (a relative rarity in Canada, but a staple of US municipal politics). He doesn’t argue here for one system over another, but just emphasizes that all these alternatives should be part of “an active conversation about how we govern our cities.”

Towards the end of the book, Broadbent discusses a number of smaller-scale innovations that could be implemented at the federal and/or provincial levels that would improve life for the cities. These include:

• making transit passes tax-deductible (which would increase utilization and thus the revenue base for transit systems);
• making the construction of low income housing more affordable (by allowing developers of same to roll over their capital gains into new low-income housing projects, and/or rebate of the GST for construction of approved low income developments);
• introducing incentive programs for developers to encourage more cultural spaces in new developments (through, for example, tax credits);
• attaching federal funding for immigrants to individuals, so it moves with the person wherever they happen to go (rather than the current system, which provides the funding to the province where the immigrant first settles).

But, his bottom-line recommendations? Turn Vancouver, Toronto and Montreal into city-provinces, with essentially the same jurisdiction as provinces. Give the next tier of cities (eg. Calgary, Edmonton, Winnipeg, etc.) a stronger set of powers that may fall just short of those of the city-provinces. He cites many examples in Europe and elsewhere where city-regions are essentially equal to states or provinces, and are represented directly at the national level. Broadbent’s proposed city-provinces would make their own policy with respect to education, health care, immigrant settlement, environment, gun laws – aspects of urban life that uniquely impact cities in quite different ways from rural areas.

And, his suggested reforms go further than this. He recommends the re-shaping of Canada: amalgamating the Atlantic Canada provinces into one, and the three prairie provinces likewise into a single province. And, he wants to create 329 federal ridings, each with an equal representation of 100,000 people, to remedy fundamental inequities in the system. (Earlier in the book, Broadbent makes the telling point that the number of residents of the Toronto Community Housing Corporation alone exceeds the population of Prince Edward Island – which has four federal ridings!)

As you may be able to tell at this point, Urban Nation is a very interesting, thought-provoking, and (some would say) radical book – but it’s indisputably part of a very important conversation about the future of Canadian urban life. MW

From the April 2009 issue of Municipal World

Check out Jon’s bio on the Municipal World website.