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IN THIS ISSUE:· Report of the C5: Historic

Meeting of Mayors of Canada’sHub Cities with Jane Jacobs

· Defining the Challengeof Urban Canada

· New Responsibilitiesand Fiscal Reform

Montreal’s Taxation Pie - 1996% collected by various governments in

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2 Volume 2 No. 1

Ideas That MatterVolume 2, Number 1

Executive Publisher: Alan BroadbentEditor: Mary W. [email protected]

Contributors to this issue:Taken from transcripts of the C5 meeting ofmayors with Jane Jacobs on May 25-26, 2001in Winnipeg, Manitoba

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Over two days in May of thisyear, Jane Jacobs met with themayors of five of Canada’slargest and most economically signifi-cant cities to discuss issues of mutualconcern and importance. This his-toric meeting, known as the C5, wasan outgrowth of a series of discussions,convened by urban advocate, busi-nessman and ITM Executive PublisherAlan Broadbent over a twenty monthperiod, in which Jacobs had partici-pated.

The C5 meeting was initiated byJacobs as a means of bringing togetherthe leadership from five Canadiancities whose economies she considersto be most at risk because of their out-dated, paternal relationships with‘senior’ levels of government.

In a September 2000 presentationto a meeting of senior bureaucratsconvened by the Office of the PrivyCouncil, Jacobs had lamented thatCanada was “a poor habitat” for fos-tering what she defined as creativecities: ones with vibrant, diverseeconomies that re-create themselvesand generate wealth for redistribu-tion, integrate large numbers of new-comers and act as gateways, or hubs,for interconnected regional eco-nomies. Jacobs stated that Canadahad created too few of these kinds ofurban economies to meet the needs ofa country of this size. More concernedwith economic diversity than geo-

graphy, Jacobs identified five ofCanada’s cities that come closest tothis definition and invited the mayorsof Vancouver, Calgary, Toronto andMontreal to meet with her and herco-host Glen Murray, the Mayor ofWinnipeg, to initiate discussions shethinks are of critical importance toCanada’s future.

Each mayor was encouraged tobring a delegation of up to five mem-bers from their community to addbreadth to the discussion of theircity’s challenges. Over the two days,the group met as a whole several timesand the mayors met in camera fromtime to time. At the conclusion of thesession on Friday afternoon, the may-ors and Jacobs discussed the tremen-dous challenges current fiscal andgovernance relationships pose fortheir cities. They publicly stated theircommitment to work collaboratively,with other Canadian mayors, andwith the two other levels of govern-ment, for a new deal that empowerscities to manage themselves moreeffectively. The C5 will continue itsdiscussion in Vancouver in January,2002. The following is excerpted fromthe C5 meeting held at the historicFort Garry Hotel in downtownWinnipeg, Manitoba.

Mary W. [email protected]

September 2001

Volume 2 No. 1 3

MAYOR GLEN MURRAY:Alan Broadbent founded theMaytree Foundation and was on thefounding board of the CanadianUrban Institute. He has been afinancier of Jane’s work and abuilder of our friendships. He hasbeen a clear and resonant voice inthe debate about urban life in thiscountry since long before it wastrendy. Had he not started bringingtogether much smaller groups ofpeople with great imaginations andhigh hopes, we would not be heretoday. Alan Broadbent is one of theunsung heroes in this country.

ALAN BROADBENT:The C5 concept grew out of discus-sions we had in the Toronto regionabout what must be done to empow-er Canadian cities. Two years ago, Iconvened a meeting ofexperts to explore theseissues. At the end ofthose two days, abouttwenty-five people con-tinued to meet over thenext year, looking forthe best way to expressconcern about the lackof power of our cities.We settled on statingthe basic ideas in aCharter for the TorontoRegion. It was duringthose discussions thatthe idea of a meetingof mayors first cameup; it came up again ata meeting Jane attended in Ottawawith staff from the Privy CouncilOffice. We decided to run with the

idea and it has taken since lastSeptember to bring us all together.My role here is as an interested citi-zen who has put some resourcesbehind the C5 effort, in consortwith Jane Jacobs.

This meeting is a wonderful signof a new era in Canada, when themayors of our major cities begin totake control of the destiny of urbanCanada. Traditionally, mayors haveoften been supplicants before seniorgovernments; their focus was localand the politics in which theyengaged was parochial. The mayorsdelicately managed relationshipswith Ottawa or their provincial cap-ital in order to gain favour on behalfof their city’s needs, seldom theirdesires.

But something is happening inCanada’s cities. Part of it is related

to what Jane has described. We areno longer an agrarian collection ofprovincial governments. We have

become a highly urbanized countryin which most citizens live in urbanregions. Another part of the changeis the emergence in our cities ofpolitical leaders with larger visions:politicians with deep experience andbroad sophistication. These mayorshave potent political power. Therecently amalgamated City ofToronto has elected its mayor in twoelections now with more votes thanany politician has ever received in aCanadian election. The about-to-beelected mayor of amalgamatedMontreal will have the same experi-ence. And the situation is the samein our other large cities.

Our mayors have the ability tomobilize political power in ways thatare yet untried for the most part;they can significantly improve theway most Canadians are governed.

As a citizen interestedin these issues, I see this asthe time when the forcesare beginning to cometogether to align our gov-ernmental arrangementsin Canada with the waythe world actually works.Increasingly, powers aremoving up to nationalgovernments and down tolocal governments, partic-ularly on a regional basis.And, also increasingly,economic competition is

between city regions.We need greater controlover many of the factors

that create successful citizens andsocieties. Some of us would go so faras to include education, health care,

Alan Broadbent, Chairman, Avana Capital Corporation.

C5: Historic First Meetingof Canadian Mayors

with Jane Jacobs

4 Volume 2 No. 1

and immigration settlement, inaddition to the usual infrastructureelements of cities.

When you parse through all thearguments about greater control ofdestiny for our large metropolitanregions, you will eventually arrive atthe need for more secure sources ofrevenue. In Canada, on average,cities rely on the property tax for 45percent of operating revenues, withthe rest coming from fees and seniorgovernment grants. In the U.S.,cities receive 15 percent from prop-erty tax, and in Europe it is wellunder 10 percent. The rest comesfrom senior government grants and awhole range of rev-enue tools: shares ofincome tax, consump-tion taxes such as gasor hotel taxes, bondissuance, and localsales tax. These arenot in addition tostate and federaltaxes, but are actualshares of existing taxbases made possiblebecause cities relievesenior governmentsfrom having to dothings, thereby reduc-ing their costs.

The five mayorsat this C5 meetingknow better than any of us the terri-ble conundrum they face: they areaccountable to large numbers of cit-izens to deliver government and ser-vices, but they control few of thelevers that deliver the goods. It is anunenviable position, having to artic-ulate a vision of the future, as goodleaders must, but lacking the controlto bring that future about with anycertainty.

It is time in Canada to begin tochange. We need to recognize thatthe urban regions are the principaleconomic, social and culturalengines of our country. We need toenable city governments to manage

the full range of powers they need tothrive and be competitive on bothsides of the ledger: revenues andexpenditures. As advocates for thecities and as mayors, we need toabandon our former posture as sup-plicants merely looking for moremoney and better treatment. Weneed to speak as leaders empoweredby large constituencies. We mustrecognize that our cities are differentone from the other, and that onesolution will not fit them all.

Our desired outcomes mustinclude new arrangements whichmay lead to more money and morecontrol, but our first concern is that

the mayors have a seat at the tablewhen government arrangements arebeing discussed in Canada and whenpolicies and programs which affectcities are designed and implement-ed. It is no longer good enough toexclude our mayors when theprovinces and federal governmentmeet. The cities are too central toour well-being as Canadians. It istime to stand up and be heard, andto be at the table.

MAYOR GLEN MURRAY:Jane Jacobs is not only a greatthinker she is also a great facilitator.Many of you know her by her work

and her many ground-breakingbooks including The Death and Lifeof Great American Cities. I’ve oftenthought if all of us in city politicshad her inspiration and insight,what great cities we would trulyhave. I couldn’t think of a moreinspiring person to bring us alltogether. Jane is someone to whomwe owe so much for our understand-ing of cities.

JANE JACOBS:Glen had a lot more to do with get-ting this affair going and organizedthan he indicates. It’s been wonder-ful working with him. I’m really

thrilled about this meeting.I can’t tell you how much Iadmire the mayors of ourcomplicated big cities. Ithink they’re the mostimportant elected officialswe have. They certainlyhave the most intricate jobsand are closest to the peo-ple. I feel honoured to havea chance to speak withthese five leaders at once.Dreams come true some-times.

One reason you are theimportant elected officials

of the country, in my view,is because cities – thelarge cities – are Canada’s

major economic assets. WithoutVancouver, Calgary, Toronto,Montreal, and Winnipeg – withoutthese cities, Canada would be sopoor it would qualify as a third worldcountry. The federal and provincialincome and consumption taxes thatbusinesses and residents in these fivecities pay are what make federal andprovincial programs and activitiesfinancially possible. Immigrants andtheir children rely overwhelminglyon these cities for income, work,educational and other opportunities.So do domestic migrants from ruralCanada.

Many little cities and company

THE URBAN CHALLENGE

C5 Mayors Bourque, Murray, Duerr, Lastman and Owen with Jane Jacobs.

Volume 2 No. 1 5

towns throughout the country thatthink they have nothing muchdirectly to do with big cities actual-ly rely on transplanted industries oroffices that were generated in thelarge cities. Many of them also relyheavily or even entirely on sales tobusinesses and consumers in thesemajor cities and their regions. Citiesare the primary economic generatorsof Canada and are becoming moreso as time goes on.

Our host, Mayor Glen Murray,calls these hub cities. It’s a gooddescriptive term, more succinct thansaying economically creative, oreconomically diverse, or economi-cally synergistic. The term describesthe remarkable economic and socialpowers of these cities. Hub cities arenot just big conglomerations of peo-ple, they are very complex organ-isms. They are the primary enginesof our economy.

In spite of the fact that these fivecities exist, a lot of other facts tell usthat Canada really isn’t a very goodenvironment for hub cities. For onething, there are large areas of thecountry that don’t have a hub city tohelp pull them out of poverty andreduce their dependence on govern-ment subsidies. For instance, theAtlantic provinces don’t have a sin-gle hub city. Saskatchewan doesn’thave one. There are large areas ofQuebec, Ontario, Manitoba,Alberta and British Columbia thatdon’t have hub cities. It’s not thatthey don’t have cities per se; some ofthese areas do have promising citieswith interesting and admirableattributes, but somehow they remainarrested in a kind of economic ado-lescence. With luck in the next halfcentury maybe one will grow up andtake off the way Calgary has done.That’s too slow and it isn’t enough.For a country the size of Canada,with the very capable and strivingpopulation that Canada has, fivehub cities is very few. It’s distressingbecause there’s a need for more, and

even the current five can’t be takenfor granted.

For instance, suppose thatWinnipeg were to stagnate and dryup, then the huge geographical gapbetween Calgary and Toronto wouldbecome a huge economic gap. Youknow this isn’t so hypothetical –Winnipeg has come perilously closeto stagnating. The well-being of the

other four large cities can’t be takenfor granted either. I suspect that allyou mayors have wish lists of ser-vices and infrastructure that yourcities need, in some cases veryurgently. Some of you, maybe all ofyou, have ideas about how thesecould be delivered in new and betterways. Because you lack theresources, possibilities have to bepostponed or even abandoned.Canada is falling behind, especiallyin fields like waste recycling, energyconservation, public transit, assistedhousing, and methods and equip-ment for preventing toxic pollution.It’s a historic mission of cities tosolve such problems. If they don’t,nobody does.

We often talk about cities only interms of economic competition witheach other. Cities are also verycooperative. They have to be orthey don’t sustain themselves oreach other. For example, no hub cityin history, and certainly none today,exists in isolation from other hubcities. They need each other.

It’s lucky that the founders of ourcountry insisted on the transconti-nental railroad instead of thinkingthat links with European cities and

with Boston and Montreal andChicago were enough. Their fore-sight, whatever the reasons for it byhindsight, was brilliant: thereabsolutely should be linkage acrossthe whole country. In recent times,these links have not been strength-ening the way they should. That’sone reason I’m so glad the mayorshave decided to come together like

this. One city’s ascendancy is notanother city’s decline at all. In everycase, when these cities are better off,it’s better for everybody. This is nota Darwinian world of killing eachother to prosper, quite the contrary.Cooperation is even more importantthan competition.

The weakening of links amongthese cities is troubling. If it contin-ues we can expect that Canada willbecome a country in name only. Theeveryday working relationshipsamong the cities are so importantthey couldn’t prosper without thelinks. Canada is not only a poorenvironment for the emergence ofhub cities but it is also an inade-quate environment for the mainte-nance of those we do have. Thesymptoms show up locally and indifferent ways but they extend coun-trywide. There’s no favoured part ofthe country that is exempt from this.Changes of government and govern-ment policy don’t correct thesethings. There is a systemic flaw,embedded in the financial and polit-ical arrangements, which clearlyaffects the entire country. It’s such asilly flaw, which dates back to thetime when most Canadians lived in

THE URBAN CHALLENGE

The other adaptation has been using inefficientand circuitous permissions and grants from

provincial governments, and sporadic acts of largessfrom the federal government, to get necessary

money to the cities. This is very crippling.Jane Jacobs

6 Volume 2 No. 1

little market towns, narrowly basedcompany towns and villages basedon agricultural, logging and fishing.I’m talking about 150 years ago,when it was quite logical for munic-ipalities to be the responsibilities ofprovinces, bracketed between tav-erns and asylums.

As wards of the province, citieswere allowed only to levy propertytaxes. This was not a bad idea whentheir capabilities in most cases werelimited to maintaining roads, fight-ing fires, providing water and sew-ers, keeping drunks in hand and, ingeneral, directly servicing proper-ties. Times have changed beyondrecognition. Canadian municipali-ties are no longer country bumpkinvillages – they have wide ranges ofabilities and human capital. Yet theold arrangements have remained.Basically all that’s been done is tomake some adaptations that wereabsolutely necessary, such as loadingonto the property taxes all kinds ofmunicipal costs that have nothingto do with servicing property. Thisnot only bloats property taxes, itskews them with destructive unin-tended consequences. They becomeregressive and then inequitable.

The other adaptation has beenusing inefficient and circuitous per-missions and grants from provincialgovernments and sporadic acts oflargess from the federal governmentto get necessary money to the cities.This is very crippling. It demeanscity governments, putting them inthe demoralizing position of beingconsidered incompetent to managetheir own internal affairs. It makesbeggars out of them as they have toplead and wheedle to get some ofthe money back that their own tax-payers have paid to the federal andprovincial governments.

The grants, permissions, andlargess can’t help but reflect the pri-orities of those other levels of gov-ernment. They absolutely don’treflect what different cities have or

their differing needs and opportuni-ties at any given time. In reality,municipalities do not march in stepwith each other. In Canada, they areforced to act like groups of puppetsthat are fastened to the same sets ofcontrolling strings.

This said, what can be done aboutit? That’s the reason for this meeting.Historically, when cities have neededreforms, they have had to take theinitiative. If the C5 doesn’t take theinitiative in this, I don’t know whowill or who can. You cities are in agood position to take the lead. Forone thing, you can make a case thatthe federal government will have toheed very seriously: it is really verydependent on revenues from thecities. If the federal government can

be made to understand how the pre-sent situation is killing the geese thatlay these golden eggs, they will listen.You have allies in your own region, inthe city regions that you’ve generat-ed, and in other mayors and councilswho realize they share your same frus-trations and difficulties. You havepotential allies in funded cities thatmust rely on you to break a trail thatwill benefit them as well. You have alot going for you.

Probably the hardest thing in seek-ing reform will be for you and yourgovernments to overcome the oldingrained habits of municipal depen-dence and the practice of opportunis-tic beggaring. However, I think youcan do it. You have an opportunityhere to think out of the box. It’s an

THE URBAN CHALLENGE

His Worship Pierre BourqueMayor,The City of Montreal

His Worship Al DuerrMayor,The City of Calgary

His Worship Mel LastmanMayor,The City of Toronto

His Worship Glen MurrayMayor,The City of Winnipeg

His Worship Philip OwenMayor,The City of Vancouver

Jane Jacobs

Delegates:CalgaryJudy Bader

Executive Director, Healthy Communities,Calgary Regional Health Authority

Patricia TrottierCo-Chair, Promoting Calgary, Inc.

Dr. Roger GibbinsPresident & CEO, Canada WestFoundation

Dale StanwayCEO,The City of Calgary

MontrealMs. Michèle Thibodeau-DeGuire

President & CEO Centraide MontrealMr. Fabien Cournoyer

Director, Economic & Urban Department,City of Montreal

TorontoDr. Anne Golden

President, United Way of Greater TorontoElyse Allan

President & CEO,Toronto Board of Trade

VancouverCouncillor Gordon Price

The City of VancouverIvan Head, O.C., Q.C.

WinnipegLeonard Asper

President & CEO, Canwest GlobalCommunications Inc.

Annitta StenningPresident & CEO, CentreVentureDevelopment Corporation

Nicholas HirstEditor, Winnipeg Free Press

Paul MoistPresident, CUPE Local 500

Additional participants:Alan Broadbent, C.M.

Chairman, Avana Capital CorporationJudy Rogers, Chief Administrative Officer

The City of VancouverGail Stephens, Chief Administrative Officer

The City of Winnipeg

C5 Support:David Walker, Independent ConsultantDon Stevenson, Independent ConsultantRatna Omidvar,The Maytree FoundationEvelyne Guindon

Communications CoordinatorDanielle Keefler, Media Savvy Consulting Inc.Caroline Neufeld, C5 Coordinator, Executive

Policy Secretariat,The City of WinnipegMary W. Rowe, Facilitator

C5 Participants

Volume 2 No. 1 7

unprecedented and historic occasionfor the mayors of the five hub citiesof Canada to meet together. You candiscuss not how it has been, but howit could be.

For instance, why shouldn’t thefederal government shift its alloca-tions of income tax points and con-sumption tax yields so that theresources the cities really need couldgo to them directly instead of cir-cuitously with strings attached? Thisis not charity, this is what the citiespay and even then they wouldn’t begetting back all of what they havepaid. It’s earned, it’s deserved and it’sneeded. I’m sure the mayors will beingenious in thinking of other possi-bilities. This is an opportunity for themayors to organize themselves withthe object of actually getting reformnot just talking about it.

There are cities that feel a littlebrowned off by having been left outof this meeting. I got one letter thismorning from the mayor of such acity who complained about that, andtold how his city deserved to be in onthis meeting too. You have allies: theC5 can become the C7, the C10,who knows? If you can do this kind ofself-organizing, and I see no reasonwhy you can’t, you could very wellachieve something that is as signifi-cant and important for our countrytoday as the Fathers of Confederationachieved in their day for Canada.

MAYOR AL DUERR: CALGARYCalgary is a city that was born of agri-culture and grew with oil. We wereprimarily a one-industry town until1982 when the bottom fell out of oureconomy. In some respects, this wasone of the most difficult periods ofour existence as a city but in manyways it provided the opportunity forthe rebirth of Calgary. What

occurred during the 1980s and the1990s was an absolute transformationthrough diversification of our econo-my. We’re still the petroleum centreof Canada; the oil and gas industry

remains a big generator of wealth inour province. But the growth andnew employment in Calgary has beenin the diversified sectors where weare getting our strength and sustain-ability. Being forced to come to gripswith the loss of our one industryallowed us to become the masters ofour destiny.

I think, in many respects, that theeconomic challenge we faced gave ustime to reflect on many otherchanges as well. Our entire down-town was going to become an officecomplex. I was a Calgary city plannerat the time and City Council was soproud because they had approved thehighest density on any property inthe world – in Calgary. That wasquite an achievement at that time;an upstart young city feeling its oats.As planners we weren’t very proud atall; we abhorred what was going on.

The downturn caused us to notonly diversify our economy but alsoto rethink what it took to make a sus-tainable city. What you see inCalgary right now is a product of thatrethink. We have a much strongerdowntown, with more residentialunits. We have placed a much greaterfocus on what the essence of a city isall about; we are discovering all ofthose dimensions that make a com-munity. We have a long way to go.

Right now we’re a city in aprovince that is enjoying prosperitythat is quite unbelievable in thenational context. We’re looking atsurpluses of $8 to $10 billion a year inprovincial revenues from petroleum;

other cities look at us and say, gee,this must be wonderful for Calgary.We have great immigration; we’reone of Canada’s fastest growing cities.But that growth and prosperity have

given us an imbalance: who benefitsfrom the growth and prosperity andwho pays the price? I should be stand-ing here and telling you that we havethe world by the tail, but we don’t.

The bottom line is, Calgary isstruggling. Four years ago we didn’thave a significant homeless problem.This fall, we’re opening two brandnew purpose-built homeless sheltersthat are going to house over 700 peo-ple. We have a huge affordable hous-ing problem. We have transportationproblems. We also have Calgariansenjoying incredible economic pros-perity who are beginning to wonderwhat that prosperity is all about.

You’re going to hear a lot over thecourse of this discussion about wheretaxes go. Calgary collects about 8percent of the taxes that are paid inCalgary even though the city pays forvirtually all of the essential elementsthat contribute to the quality of lifein the city other than health care andeducation. Those numbers will vary alittle bit as you go from city to citybut the essential issue is the same.Even with incredible prosperity, weare experiencing the exact same chal-lenges that all of the other majorcities are facing across this country.So prosperity – more money andstronger economies – is not the solu-tion. You can all try and get more busi-ness – attract more activity to yourcity – but that will not address the fun-damental imbalance that is very mucha reality in Calgary and other urbancentres across this country.

How do we address that? I very

THE URBAN CHALLENGE

Even with incredible prosperity, we areexperiencing the exact same challenges that all of

the other major cities are facing across this country.Mayor Al Duerr

8 Volume 2 No. 1

much agree with Jane’s comment thatwe should stop looking at an envi-ronment where we’re forced to bebeggars. We have a right to adequaterevenues to deal with the responsibil-ities that are being foisted on us. Idon’t disagree with municipalitieshaving increased responsibilities.Municipalities should probably bedealing with their own urban housingand major social issues because eachof our cities across this country hasdifferent issues and responsibilities.The only way we will be able torelease our creative potential inresponse to these issues is by beinggiven the necessary resources andthen being challenged with all thoseresponsibilities. I believe all the citiesrepresented here have a collectivepotential to do some wonderfulthings and to challenge all of the tra-ditional structures and the institu-tions that have been put in place.

It is important that we take thisdialogue beyond this table into our

communities. It is important that weas mayors accept the mantle of lead-ership that is required not just to dis-cuss these issues as politicians talkingto other politicians or orders of gov-ernment. We must also create a dia-logue in our communities so our citi-zenry understands the complexity ofthe issue.

If we’ve got one problem, it is that,in spite of increased responsibilitiesand diminishing resources, municipalpoliticians across this country havecontinued to deliver good local gov-ernment. We still have great cities.We will not have great cities on aninternational scale if we don’t cometo grips with some of these issues.That’s the challenge.

MAYOR PHILIP OWEN: VANCOUVERFor the City of Vancouver, the wholeissue of refugee policy is of greatestconcern. In April of 2001, a reportcalled “Response to Bill C11 – TheImmigration and Refugee Act” iden-tified a couple of things we want thefederal government to discuss withmunicipal governments, includingthe City of Vancouver. We suggestedthey add clauses to the bill recogniz-ing the key role that the City ofVancouver and other municipal gov-ernments have to play in the area of

settlement, and that the federal gov-ernment should reimburse municipalgovernments for services rendered toimmigrants and refugees.

Another issue for Vancouver ispublic transit. Washington D.C. lastyear dispensed $390 billion to U.S.cities for roads and transit improve-ment. We don’t get anything likethat out of Ottawa.

We have a plan, started forty yearsago, to replace the entire sewer sys-tem one percent a year. At present,98 percent of the sewage in the Cityof Vancouver goes through primaryand secondary treatment. The regionspent $640 million in the mid-1990sto upgrade a secondary sewage plant,one of the biggest capital projects in

the country. By the year 2030, theentire sewer and water system underthe City of Vancouver will be totallyreplaced from the combined pipe to asewer and storm water pipe. The fed-eral government told the Port thatthey’re responsible for outflows thatgo into any waterways in the City ofVancouver. The Port has said thatthe city is liable; they are going tohold us responsible for it. This is justone of the billion dollar bites thatgets laid onto the cities. It’s majoroffloading, big time.

In the last eight years we have hadtransfer payments from our provin-cial government reduced by $75 mil-lion a year. Our annual budget is$550 million, so you figure it out. Webalance our budget and still have atriple A credit rating. We are very fis-cally responsible and we like to bethat way. We also feel that we have tobe socially responsible. We’re puttingmore and more municipal moneyinto health care and social services.Where do we get our money? Fromthe property tax. If the provincialand federal governments want us topick up more services, fine, but theymust give us access to the revenuestreams to pay for them.

One of our big concerns is crimeand safety. We’ve been working onthis for a couple of years, and haveproduced a document called “TheFramework for Action.” We went outto the community and spoke withsome three thousand different citizensat thirty-five meetings over sixmonths. We had a huge response andgot tremendous media coverage.Although alcohol was identified asthe biggest problem, heroin andcocaine are getting into our schools.This is the same all across the country– it’s all around the world – but wedecided we could no longer ignore it.

It became clear to us that youcouldn’t liberalize or incarcerate yourway out of the chemical dependencyof drugs but you have to do some-thing. It’s a matter of public healthand public order. You have to sepa-

THE URBAN CHALLENGE

The other cities are going to be with us as we goforward on this journey of changing the paradigm andthinking differently about how we all – this country,these provinces and the cities that we represent – work.

Mayor Philip Owen

Volume 2 No. 1 9

rate the dealer (or pusher) from theuser. If you start thinking of the druguser as sick and the drug pusher asevil, then you can start dealing withthem. The City of Vancouver hasdeveloped a four pillar approach toprovide a comprehensive, completecontinuum of care and the federalgovernment has been very support-ive. They are listening to us. Theyare paying attention.

Our British Columbia governmentis early in its mandate so now is agood time to get to them. The feder-al government is also in the begin-ning of its mandate, so it’s a goodtime to get to them too. I think wehave to move forward in a spirit ofcollaboration, cooperation, and dia-logue with our senior levels of gov-ernment. We don’t want to bring outthe heavy lumber and start swingingit quite yet because I think they arepaying attention. The prime ministerhas just created an urban task force. Ithink they want to work with us. Wehave got to take them a blueprintwhich will get us out of this trendtowards increasing responsibility andcontinued offloading to city govern-ments with limited access to funds. Ithink we’re going to turn the cornerduring this conference. And we’renot dealing out the other cities.We’re going to plant some seeds andthe other cities are going to be withus as we go forward on this journey ofchanging the paradigm and thinkingdifferently about how we all – thiscountry, these provinces and thecities that we represent – work in thisgreat country.

MAYOR PIERRE BOURQUE: MONTREALWe recently celebrated Montreal’s359th anniversary. The city has seensome difficult times, and times ofgreat power as a city. For a long time,

Montreal was the heart of Canada,the heart of the province of Quebec.Montreal has also had periods of eco-nomic decline, of social decline andof cultural decline. And I think thatit’s important to you that I talk aboutthe new Montreal, about the rebirth

of Montreal, with the merger that isabout to take place.

On January 1, 2002, Montreal willbe a city with a population of 1.8 mil-lion. Another interesting fact is thatMontreal is still the second largestFrench-speaking city in the world.Greater Montreal has 3.4 millionpeople.

I became mayor in 1994 whenMontreal was going through difficulttimes. People everywhere were talk-ing about how Montreal needed anoverhaul.

Today, we are beginning to see theresults of the investments we made,of the work done with business, withthe community, with changes to theeconomy. And now Montreal isclosely following what is called a sus-tainable development policy. We sawperiods of rapid development duringthe 1960s, and now we are investinga lot in sustainable development. Weare placing a major emphasis on cul-ture, the environment, social harmo-ny, the cultural communities. We arerelying on the international charac-ter of Montreal.

We were talking earlier abouthubs. Montreal is a link betweenEurope and North America. We areclose to New York, close to Europe,close to London, close to Paris.Montreal is an international city. It isthe third largest international con-vention city, after New York andWashington. There are 75 interna-

tional organizations set up here. Weare one hour away from New York.French is spoken here, English is spo-ken here. 80 percent of Montrealersspeak French; 60 percent speak bothFrench and English; 30 percent speaka third language and 10 percent speak

four languages. Montreal’s strength isalso its universities: 180,000 universi-ty students.

The challenges Montreal is facingare the challenges all big cities haveto face, and what we’re really doingtogether, we five big-city mayors, ispositioning ourselves. Cities are theheart of nations and what we’re real-ly doing is trying to find solutions toproblems, consolidating the roles ofcities, of the big metropolises of theworld, since that is where you find agood part of the talent, the immi-grants, the social problems, as well asthe culture, the effervescence, thediversity. For the past seven years,I’ve been trying to get money fromgovernments, from the federal gov-ernment, from the provincial govern-ment.

Montreal is still fragile. We facehuman challenges. First, ensuringsocial harmony. 42 percent ofMontrealers are of neither Frenchnor British origin, 30 percent arerecent immigrants. We have to payattention to the poverty issue, to theproblems of aging and fragile neigh-bourhoods, which means ensuringthat everyone enjoys the same quali-ty of life as to housing and urbanenvironment. Montreal is workinghard to make certain those servicesare provided.

Then there’s the complexity ofrunning cities since we have to dealwith everything. We have to deal

THE URBAN CHALLENGE

Running a city doesn’t only involve providinglocal services; it means looking after people. The first

place where people feel a sense of belonging is the city.Mayor Pierre Bourque

10 Volume 2 No. 1

with crime and drugs; internationaldevelopment; housing and health;economic development.

We also need public transit sincewhat is killing us is all the air pollu-tion, the cars. Montreal is an island,and there is some talk right nowabout building two new bridges. Weare against that. We want to keep thepeople on the island, to bring thepeople back to the city. We havealready lost 500,000 people to thesuburbs off the island. The challengewe now face is to heighten the quali-ty of life in the city, to fix our infra-structures, be it parks, green spaces,bicycle paths, access to the river,access to water, in short to maintainconditions that are favourable toinvestment, right now, and especiallyon the island, the core.

No city can flourish without astrong central core. In the end, it’sthe core that activates the rest. Asyou know, we still have a lot to doenvironmentally. All the soil inMontreal is contaminated. So, peoplewant to go elsewhere to invest. Weneed to have policies to invest in soildecontamination. We also need toimprove our environmental policies.

Today, Montreal is a clean,healthy, beautiful city, but it takes alot of constant work. Our citizens,who come from all over the world,need to adapt to this new reality. Sothis also means giving them access towater, to quality of life, and creatingin each of the neighbourhoods a feel-ing of belonging, through environ-mental projects to create a sense ofcommunity.

To make sure we were looking afterour young people, one thing we didwas to set up committees for youngpeople to deal with social problems.We targeted a few Montreal neigh-bourhoods that were having the mostproblems, and very interesting inter-ventions were carried out.

There is also a need for socialhousing. Right now, the economy inMontreal is doing well, so there isreally very little affordable housing

available. And that is why we needresources. We’ve had the same bud-get for seven years. From 1994 to2001, we haven’t increased taxes,because, the more we increased taxes,the more people left. Now we havethe opportunity to better distributethe wealth, to stop losing our citi-zens, because the exodus from thecore to the suburbs is dramatic. I’mnot speaking only for Montreal, butfor many cities in the United States,in Canada. This equation has to bechanged.

Running a city doesn’t onlyinvolve providing local services; italso means looking after people,looking after integration. In our case,this means helping immigrants learnFrench, helping them adapt, anddealing with social problems. It takesa great deal of effort because the firstplace where people feel a sense of

belonging is the city, the neighbour-hood. So, that’s why we need to lookfor other sources of income.

We have to find money to reno-vate our structures, our aging infra-structures, and especially public tran-sit. Our national infrastructure pro-gram is very weak: $1.5 billion for allof Canada. Montreal gets about $60million but in fact we’d need tentimes that amount. We are creating500 housing units per year. Weshould be creating 1,000 to 1,500 peryear, to meet the current needs.

It is time the Canadian govern-ment invested in our infrastructures.We can’t do it all at once. We can’tkeep taxes at the same level, whilebringing people back to Montreal,making the downtown area moredensely populated, giving a cultural

life and an international character tothis city, without adequate resources.

MAYOR MEL LASTMAN: TORONTOToronto is the most culturally diversecity in the world. We are a city ofpeople who come from 170 differentcountries and speak over 100 lan-guages. And Toronto receives only4.8 percent of the total taxes collect-ed from within the city. The rest goesto the province and the federal gov-ernment.

We can’t even charge for serviceswe perform like restaurant healthchecks. The Toronto Star identifiedwe had a problem in some food estab-lishments and we did. We got it all

cleaned up. We must constantly keepchecking those restaurants, but wecan’t even charge them for the ser-vice. We can’t make a move withoutthe provincial government saying,yes, it’s okay.

Toronto is probably the homelesscapital of Canada. More than 30,000people are in our shelters each yearincluding 6,000 children. One-thirdof these are children under four yearsold. Toronto receives one-third ofCanada’s immigrants who add somuch to our city. They’re great. Butwhen they come into Canada whydoesn’t the federal government payfor it? Over a year ago, I sat downwith the prime minister and headmitted it was his responsibility. Imentioned it to him again a week agoand he says he will look into it. Well,

THE URBAN CHALLENGE

The provincial and the federal governments keeptaking our money, then they say, in a quote

from one of today’s papers, “we have to start livingwithin our means.” What “means”?

Mayor Mel Lastman

Volume 2 No. 1 11

they’re still looking and it costs us$30 million a year to look after thesenewcomers. We put them up inmotels from Oshawa all the way outto Niagara Falls – over 100 milesaway. This should not be happening.It is a federal responsibility but theywon’t accept it.

Like Montreal, we are wrestlingwith the tremendous costs of aginginfrastructure. Like Winnipeg, we aregrappling with the homeless crisis.Like Vancouver, we are strugglingwith the burden of provincial down-loading. But Vancouver, Winnipegand Montreal have an advantageover Toronto. Each one of thesecities already receives a share ofprovincial revenues. Manitoba allo-cates revenues from personal incometax to municipalities on a per capitabasis. British Columbia shares itsretail sales tax with municipalities. InOntario we get nothing. Not onepenny.

This year alone the cost of provin-cial downloading to Toronto’s tax-payers has reached $276 million. It’scost us almost a billion dollars sincethey created the megacity almost fouryears ago. The chartered accountantfirm of Ernst and Young predicts thatfigure of $276 million will rise to anaverage of $376 million a year; it willpeak at $472 million a year by theyear 2009. Between now and 2010they say provincial downloading willset Toronto taxpayers back $3.7 bil-lion and that doesn’t include the costof federal downloading to our city.Our taxpayers are spending as I said,$30 million a year on food, shelters,and health care for refugee claimantsthat the federal government hasadmitted into this country. We’respending another $232 million a yearon social housing that has beendownloaded onto the taxpayers bythe federal and provincial govern-ments. What’s wrong with them?These guys are swimming in moneywhile we’re drowning in debt becauseof downloading.

They say money is the root of all

evil. Well let me tell you in Torontoour lack of money is the root of ourproblems. We need to pump billionsof dollars into our transit system overthe next decade if we’re going to keepthe stock rolling and keep our subwaytrains, buses, and streetcars safe. Weneed hundreds of millions of dollarsmore to build affordable housing. It’sbeen promised. The provincial andthe federal governments keep takingour money, then they say, in a quote

from one of today’s papers, “we haveto start living within our means.”What ‘means’?

We’re spending so much moneylooking after federal and provincialresponsibilities, we can’t afford to payfor our own responsibilities. We’vehad to give up programs because thelegislation said we must look afterthings like over 95,000 subsidizedhouses. We are the largest landlord inCanada of subsidized housing.

American cities went into a down-load spiral when the U.S. govern-ment made the same mistakes twentyyears ago. These cities were pushed tothe brink of bankruptcy before thestate and federal governments real-ized their mistakes and took steps tocorrect them. Now a lot of Americancities are starting to boom becausethe federal government put moneyinto them.

As Canada’s leading city, we play avital role in the economic well-beingof our entire country. Canada relieson Vancouver for lumber andWinnipeg for grain. It relies onCalgary for oil and Montreal for ship-ping, and it relies on Toronto formoney. Toronto’s GDP is greater thaneight of the ten provinces.

If one of our cities starts to strug-gle, the entire country feels it.

And yet, we don’t get any part ofany tax except the property tax. Ifound out we pay $70 million a yearin provincial sales tax alone and $43million in GST. When times aregood, it doesn’t help Toronto. Whentimes are bad, it hurts Toronto. Andtimes are great in Toronto. Businessesare thriving, but not the city becausewe don’t get any part of anything.

We C5 cities all have very similarproblems. We’ve got to work togeth-er, we’ve got to do it now. There’s noshortage of money in Ottawa.

MAYOR GLEN MURRAY: WINNIPEGWe share a number of challengeswith these other hub cities. We havean over reliance on property taxes.When I became mayor, 63 percent ofour revenue came from propertytaxes. We were tied with Vancouverat that time as the most property taxdependent city in North America.We had about the highest per capitadebt of any city in the country andsome of the most unfixed streets.

We have to operate under veryprescriptive legislation. If we want tochange the way we fog for mosqui-toes, if we want to move money fromwater and sewer renewals to residen-tial renewals, if we want to changethe size of council, we have to askpermission.

Our transit costs used to be shared

THE URBAN CHALLENGE

For example, $4 billion in motor fuel taxes is goingout of cities across Canada to the federal government,

and less than 3.5 percent of that money is reinvestedback in the cities that generated it in the first place.

Mayor Glen Murray

12 Volume 2 No. 1

equally by the province and the city;it was $15 million each. We now put$30 million in and the province stillputs $15 million in. But we still needthe service – more services in fact.

If there’s a lack of sympathy formayors across the country about thefinancial woes of the federal andprovincial governments, this mightexplain it: in this city alone in thenext six years, $1 billion worth ofinfrastructure repair work is needed,for which we have no money. Theurban economy is generating moretaxes but no one is reinvesting thatmoney back into the cities.

What keeps cities alive is theirparks, their culture, their green-spaces. If you’ve been through down-town Winnipeg, you know we’re des-perately crying out for a new urbanpark. We have older neighbourhoods,80 block areas, with not a single treebeyond those planted in the boule-vards. We’re spending $1 million –10 percent of what’s needed – toenhance the livability of the city.Now this isn’t putting new parks in oradding new play equipment. This isjust replacing what’s currently inplace. We have to compete withMinneapolis and Phoenix which arenot only maintaining, they’re mas-sively reinvesting and adding to theirinventory of streets, cultural assetsand parks.

For example, $4 billion in motorfuel taxes is going out of cities acrossCanada to the federal government,and less than 3.5 percent of thatmoney is reinvested back in the citiesthat generated it in the first place.

Can I raise property taxes? Not if Iwant to be re-elected. Can I affordnot to put more money into streets?No, because I won’t be back after thenext civic election if I don’t. Whatdo I do? I’ve got the tax-cut lever, thetax-increase lever and that’s it.

Look at what I’m competing with.Our hockey team went to Phoenix.Right now we’re intending to build ameasly $125 million entertainmentcomplex which we’re very excited

about. Phoenix and Scottsdale arefighting over who’s going to build a$1.5 billion (U.S.) megamall enter-tainment sports complex for whichthe city is putting in $750 million.How can they do that? Because 44percent of Phoenix’s revenue comesfrom local sales tax. Even thoughthey’re going to spend $750 billion,which is more than my total annualbudget as a city, they’re going to get itback in spades. Every year they’regoing to be generating hundreds ofmillions of dollars in revenue.

If Phoenix held the Pan AmGames it would be a financial wind-fall for them. They would be reward-ed. For us, as it stands now, regardless

of whether this hotel is empty or fullit’s only paying property taxes, so wehave no financial incentives to fillthe rooms. Cities have to be reward-ed by the tax system for their success-es. If not, we’re just not going tocompete. We have nowhere near thekind of revenue splitting or sharing

we need to survive. This year the federal government

announced a $15 billion surplus andhad money to pay down its debt. Thetotal budgets of the cities representedin this room amount to just undertwo-thirds of that surplus. Now, let’simagine if the federal government, inthe last five years, had had a 13.5 per-cent decrease in revenues – as wehave had: would they be reporting asurplus? What would our health caresystem look like? Would they not saythere was a financial crisis? Rightnow Canadian cities have to competehead to head. We need to cooperateand see each other as partners. If wecan come out of this meeting united,with a vision to position Canadiancities as the healthiest, the best, themost competitive, and the strongeston the continent, then we do everyCanadian a great service whetherthey live in a city or not. We have tosupport each other.

Defining the ProblemTaxation and accessto revenue sourcesROGER GIBBINS:Taking control of our urban destinyrequires leadership and vision. Ithink the leadership is there but thevision is a problem. A connectionhas to be made for the broader publicbetween the cities and the nationalambitions and aspirations of Canada:if the cities fail, the country fails.

I am distressed by the damage theU.N. has done to Canada by that onereport that said Canada is the bestplace in the world in which to live. Itfeeds into our sense of complacencywhich is clearly apparent when welook at how Canadians view theircities. We have a view of Americancities that tends to be lodged in the1960s. We’re not aware of the rapidchange that has taken place thereduring the past several decades.

There is a need for a more con-frontational stance. We need to cre-ate a vision, one that resembles a

DEFINING THE PROBLEM

Source: City of WinnipegEstimated 2001 Budget: $0.75 Billion. Includes transit,solid waste disposal and provincial capital grants.

Source: City of Phoenix2000-2001 General Purpose Funds: $1.07 Billion. Similar set ofservices but also includes municipal costs (5%)

Volume 2 No. 1 13

manifesto, however out-of-date thatformat is in this new ideologicalenvironment.

The case has to be pitched at abroader level than the property taxand similar nuts and bolts argumentsfor urban reform that are being madewithin the room. The health of ourcities is absolutely imperative toCanada’s ability to compete in anincreasingly competitive world and ifwe can’t get that across, we’re nevergoing to find an audience for the kindof taxation issues that are so centralto cities.

COUNCILLOR GORDON PRICE:Here is the conundrum: every seniorgovernment – at least every success-ful political party that forms a gov-ernment – now runs on the basis thatthey will reduce taxes.

From the federal government’spoint of view, it makes sense thatthey would simply say, we’re reducingtaxes. If the cities need more, theycan put their hand back in the tax-payer’s pocket and take the moneydirectly. From the point of view ofthe taxpayer it would be equal. Thefeds reduce, the cities increase. Thefeds get the credit and the cities haveto be politically courageous todemonstrate to their electorate thatthey can handle that money to justi-fy the tax increase. The federal gov-ernment is taking so much money outof the economic engine of the citiesthat they’re killing that very goose.

The climate is absolutely clear.Business has done a great job, and themedia echo this every single day.Cutting taxes is the norm; it is apolitical reality that has been provenin numerous elections. It’s a set up:the feds cut taxes so the cities have toraise them.

JANE JACOBS:Whenever I’ve talked to peopleabout the C5, the first thing they askis, what new taxes should cities havethe power to enact? They don’t seemto recognize that if cities take respon-

sibility for things that provincial orfederal governments are now doing,then those resources are shifted. It’snot a matter of new taxes. You don’tneed to give the tax money to peoplewho aren’t doing the job. It’s not amoney-grab; it’s a matter of shiftingthings to meet responsibilities and to

put them where the opportunities fordoing it well and efficiently are thegreatest, closest to the people they’reserving.

Money is only a means to an end.The important ends are opportunitiesto do things better and more closelywith the citizens who are affected.Money makes general improvementsin the cities possible.

MAYOR AL DUERR:I’m a fiscal conservative and I believein lower taxes absolutely, but we’vecreated this mantra of tax cutting,and fostered a naive understanding ofthe complexity and the problem.

If we could get all the federal,provincial, and local governments atthe same table with the businesscommunity, we could ask who shouldbe doing what? Is there a role for gov-ernment in subsidized housing? Well,if the private sector isn’t doing it,then somebody has to. Is there aplace for some form of communitysubsidy? Well, we don’t have thephilanthropy there is in other coun-tries, and we’re not going to buildthat institution overnight so there’sprobably a role for government toplay. Who’s going to fix the roads? It’sprobably going to be government.Sewage treatment? One way oranother you’re going to have govern-ment involved. You can have a

national standard – guidelines likethe Canada Health Act – with localimplementation. The applicationsand funding priorities that you wouldapply would vary across the countrybased on the demographics. The pri-orities would change from city to city.If you started asking who should

address those issues, you would prob-ably find the vast majority of the peo-ple around that table would recognizethat local government is probablybest equipped to deal with most ofthose things that have an impact ontheir quality of life.

In the case of Alberta, I think weneed access to a much greater andmore progressive form of revenuegeneration than we now have. If youlook at American cities, a very verysmall portion of their taxation is gen-erated through property tax.

MAYOR PIERRE BOURQUE:We cannot increase taxes; that’s justnot possible. The higher the taxesare, the more people leave, the morepeople head for the suburbs, becausethe suburbs attract people, just likethey do everywhere in NorthAmerica, in Canada.

JANE JACOBS:The education – or miseducation,whichever you want to call it – of theelectorate is that taxes should be low-ered. But the electorate havereceived other messages that are veryconstructive. One of them is thatdependency is not to be cultivated; itis debilitating, demoralizing, waste-ful, and not a good condition in gen-eral, whether it applies to people orto institutions.


I’m a fiscal conservative and I believe inlower taxes absolutely, but we’ve created this

mantra of tax cutting, and fostered a naiveunderstanding of the complexity and the problem.

Mayor Al Duerr

14 Volume 2 No. 1

If dependency is bad for everythingelse, why the notion that it’s good forcities? It isn’t. It absolutely isn’t. Youcan see how it infantilizes cities,making them childish in many ways,to the disgust of their own citizens.

Another message that has comethrough to the general population is

that spending tax money inefficient-ly is a waste. I think everybodyunderstands this now. These antique,roundabout ways of getting publicmoney to the cities are very ineffi-cient and wasteful, just the way thedependency is wasteful.

For example, consider the attemptsat equalization and economic devel-opment that have come from above.Think of the billions and billions ofdollars that have been spent on theAtlantic provinces alone. One failureafter another. The need to subsidizegoes on and on. It would be muchbetter to see what could come out ofthose stunted cities themselves.

ROGER GIBBINS:We have to counteract a generalanti-taxation mood within the coun-try and make the argument that gov-ernments do differ in terms of howthey’ve profited from or how they’veaddressed taxation issues.

I agree with Jane Jacobs’ point thatthere is political support for redistrib-ution of the tax load and tax revenuesources. In western Canadian cities,it would not be a tough sell to arguethat greater tax responsibility shouldrest more with the local governmentthan with the federal or even provin-

cial governments. I think there’s sup-port for bringing tax expendituresand tax responsibility back closer tothe local community.

There is an assumption thatmunicipal tax rates are a critical fac-tor in the kinds of locational deci-sions that firms and individuals

make. I’m not convinced that it is asdecisive a factor as the urban envi-ronment in which firms locate. If theWinnipeg Free Press carried a full pagephotograph showing members of thelocal business community wearingtheir backpacks at the WinnipegAirport saying, “I’ve fallen into mylast pothole, I’m out of here,” maybethat kind of argument would counter-act the assumption that that sameindividual would leave if the tax ratewas modified in a very modest way.

ANNE GOLDEN:On the specific issue of the role oftaxes and economic competitiveness,within regions tax differentials mat-ter. According to research based oninterviews with eighty-five chiefexecutive officers who had mademoves to the Toronto area, the deci-sion of a business to locate in an out-lying area relative to the downtowncore did involve property taxes.

However, among cities with whomwe’re competing in North America,what matters more is everythingrelated to quality of life and specifi-cally the quality of the labour pool.Many examples exist of companiesthat started in a global economy todo work outside in lower wage

economies and have come backbecause, for instance, in Mexico oncethat particular labour supply is gone,they cannot find the talent.

The point made on the cost ofsprawl is extremely important but Ithink it cuts two ways. On the onehand, the costs of sprawl areabsolutely huge. We estimated thatin the Greater Toronto Area, thewaste of money due to provincialpolicies is costing a billion dollars ayear for the next twenty-five years. Ifspent on health and education, thatmoney would literally solve the fund-ing crisis in both of those areas.

We know that if we develop intel-ligent policies around smart growth,the dollars are there. That’s the posi-tive side. The negative side, though,is how we’re doing our planning. It’sdifficult to empower politicians atthe local level because we are sodependent on policies put in place bysenior levels of government. I thinkwhat we have in cities is the conver-gence of policies, creating problemsfor us over which we seem to have lit-tle control. For example, in the Cityof Toronto, you have the cumulativeimpact of the federally funded socialhousing ending in 1993, provincialfunding ending in 1995, as well as theremoval of all planning controlsbeginning in 1995, and the removalof rent review without compensatingmechanisms. It’s chaos. We cannotsolve that problem without the co-operation and support of all threelevels of government.

The sprawl issue demonstratesboth our dependence on provincialpolicies and the fact that the moneyis there. As Mayor Lastman said tome, we simply have to take three orfour of those income tax points.

We need a way to link demandwith funding. For example, inToronto we made the case to the fed-eral government that the funding notsimply be per capita, but that it belinked to acknowledged need factors.The formula is easy to develop. Youchoose five indicators such as num-


Government taxes are 12.5 percent of theoperating costs of the average business in the City of

Winnipeg, of which the city gets .5 percent.In the downtown environment, property taxes are

such an immediate and visible cost thatthey have become a huge disincentive.

Mayor Glen Murray

Volume 2 No. 1 15

bers of people living below the lowincome cut-off, numbers of seniorsand poverty numbers of single parentfamilies. To me, the most significantfact about Toronto right now is thatthere are 44 neighbourhoods in theGreater Toronto Area where over 40percent of the households are livingin poverty; 43 of the 44 are located inthe City of Toronto.

MAYOR GLEN MURRAY:Government taxes are 12.5 percentof the operating costs of the averagebusiness in the City of Winnipeg, ofwhich the city gets .5 percent. In thedowntown environment, propertytaxes are such an immediate and vis-ible cost that they have become ahuge disincentive.The only thing we gotthrough was theHeritage Tax Creditwhere you could writeoff 50 percent of yourinvestment in a her-itage building. Thisbuilding – the FortGarry Hotel – has had$2 million in grantsand tax write-offs forabout $10 million pri-vate sector invest-mentwhich this madethe difference betweenthe building beingredeveloped andbeing demolished.

Property tax instruments can beeffective incentives to help cash flowand reduce actual reconstructioncosts, but more is needed. We formeda development corporation, Centre-Venture, which loans money at thefront end, so owners have cash intheir pockets. Rather than payingtaxes, the owners are paying backloans against the redevelopment oftheir buildings to the developmentcorporation.

We have a situation where a largeoutfitting store from Calgary is locat-ing a large store downtown, and thecity is the actual developer. We build

the building and lease it back to themessentially. This is a very interestingmodel because we couldn’t get pri-vate sector developers to take risks inthe downtown environment.

For the last ten years, we have hada provincial government that hasmassively subsidized sprawl. It wasgiving rural municipalities on theperiphery of Winnipeg all kinds ofadvantages and paying for all kinds ofinfrastructure with provincial taxdollars against our objections.

As mayors of large cities we mustbe the driving forces for sustainabili-ty and renewal of the centre and theurban fabric of our cities. What’s theframework? What are we trying todo? I think we have an overwhelming

understanding of the problem and Ithink we all, if given the authority,would be able to fix our cities quiteeasily without any major tax increase.But it goes back to one problem: citi-zen engagement. Even within ourown city councils, how little time weactually invest in our colleagues,angry suburban councillors whothink their communities are getting araw deal and their major job in civicpolitics is to get that big underpassbuilt so people can get to the mallfaster. We have a huge amount ofwork to do in engaging our own gov-ernments and our own politicalmachinery to get them on the side of

the mayors. We need to educate ourchambers of commerce, many ofwhom think that the most importantthing is to eliminate the business tax.

ResponsibilitiesMAYOR PHILIP OWEN:In British Columbia, cities providefire service, police service, garbagepickup, street sweeping and grass cut-ting, help with education, and deliv-er the social services of the seniorgovernments. If we’re going to beresponsible, we’ve got to get into therevenue streams. I think we’ve got alot of fog here on who’s responsiblefor what. We have increased respon-sibility, and we’re forced to balanceour budgets as the transfer payments

continue to be cut. We’vegot to rethink and redefineour roles. If you want us to beresponsible then create ashared revenue process. Forthe good of this country andthe health of the cities,which are our economic gen-erators, we have to startclearly defining our roles.That’s it.

MAYOR AL DUERR:Do we want these responsi-bilities? Well, we live inthese communities. Whengovernment steps out of anissue such as housing, we

experience the consequences direct-ly: more people die on our streets orare left homeless or whatever. Wethen have to assume responsibilitiesand become victims for doing that. Inmy last municipal election, I wasattacked for the lack of affordablehousing in Calgary. Yet the provin-cial government sailed into powerwith its highest majority ever, with a$10 billion surplus, having donenothing for public housing inCalgary. No one asked them aboutaffordable housing. No one botheredto look up Section 92 in theConstitution Act and see who hasthe responsibility for it because it’s


Mayor Glen Murray and Winnipeg delegate Leonard Asper.

16 Volume 2 No. 1

now a given that affordable housing isthe responsibility of the city.

There is an opportunity here to geta consensus on how we should fundcertain categories of responsibility.

How should transportation be fund-ed? I can tell you right now there’s acompelling case to use provincial,federal, and municipal fuel taxes –direct user pay – to fund transporta-tion. The same case could be made forpublic housing and welfare relatedissues; you would have to match arevenue source to a responsibilitywith a tacit acknowledgement that ifthat responsibility is downloaded ortransferred or accepted, the fundingwill go with it. I think that’s a realidea we could sell across the country.

COUNCILLOR GORDON PRICE:Municipal government has been sogood at delivering high quality infra-structure that it has financed anextraordinarily high quality of life.We don’t get enough credit for this.In the post war period we have beenproviding low cost water. It’s so cheapin Vancouver, we don’t even metre it.We have built an infrastructuredependent upon low cost energy; wemay not take credit for that but wecertainly have built our lifestylearound it. We have delivered low costland. The sense of entitlement thatpeople have now for this good life isabsolutely extraordinary. The stan-dards are so high and we have been sogood at doing it for so long that we

have created an environment that Idon’t think we can afford. We havefinanced sprawl on a spectacular scalewhich has led to this high energy,high consumption lifestyle that I

think is one of the reasons why it is sopolitically popular to cut taxes. We’vecome up against the limits of that andtherefore something’s had to give.

Two things have happened simul-taneously: the decay of infrastructurein the inner city and the rolling in ofthe social problems. Hello, Toronto.We’re now seeing a little bit of this inVancouver but not as much as else-where. There’s a danger in trying toget access to taxes to finance thiswaste and I think this high consump-tion, high energy lifestyle dependentupon sprawl is staggeringly wasteful.

I think each of the cities has differ-ent priorities and needs. We don’twant to get caught into a one-size-fits-all scenario. I certainly don’twant to be put in a position where myobligation is to continue to financewhat I think is an unrealistic way oflife; I want to try and do things sothat we continue to have economicprosperity that’s sustainable.

Dealing with other levelsof governmentMAYOR PHILIP OWEN:We have to recognize that we’re nottrying to get rid the federal andprovincial governments. They’rethere, we’re here, they’ve got theirjob and we’ve got our job, but there’s

a disconnect. We’ve got to let thefederal government know that we canoffer them a presence locally. We candeliver the services with sensitivityand cost effectiveness and do it muchbetter than they can but we needtheir help and co-operation. We’re inthis together for the good of thecountry.

MAYOR AL DUERR:We have to find a way to allow ourprovincial and federal governmentcaucuses to create a permissive envi-ronment rather than the kind ofpaternalistic environment that hastraditionally dominated federal,provincial, and municipal relation-ships. I have a premier who is a for-mer mayor of Calgary. If you thinkthat has meant anything whatsoeverfor Calgary, I can tell you it has beenquite the opposite. Former city coun-cillors who are now members of theprovincial legislature live in fearbecause every time they have a cau-cus meeting, they can’t mentionCalgary: there is this incredible dis-trust from the rural-dominated cau-cus.

MAYOR GLEN MURRAY:There’s a sense of sophistication anddiversity in cities that is not shared byprovincial governments. Our provin-cial governments tend to be less cos-mopolitan, more rural, and moreparochial. For many parts of thecountry which are dominated by ruralpolitics, it’s very hard for us to have aconstructive relationship.

MAYOR AL DUERR:It took us a good year to negotiatethat fuel tax revenue for Calgary andEdmonton. In a meeting with smallercommunities in southern Alberta Iwas challenged by the mayor ofCrowsnest, a community of 2,000,who said, “you sure can tell where thepremier comes from because Calgaryand Edmonton got this fuel tax rev-enue. Why don’t we get five cents alitre?” I had to point out to him that


Something that worries me is that not enough new,vigorous cities are emerging. Too many Canadian citiesremain forever in adolescence. It’s not good and it’sgoing to make terrible trouble if these things aren’tcorrected. You can’t say it’s anybody’s fault exactly, it’shistory’s fault. If there’s any fault among uscontemporaries, it’s not looking history and change inthe face, and thinking what must be done now.

Jane Jacobs

Volume 2 No. 1 17

he wouldn’t want it because, bottomline, he gets a lot more than fivecents a litre.

We’ve had some discussionsrecently in the Calgary region. Ourprovincial government in their wis-dom decided to abolish regionalplanning. Now we are working on anentirely voluntary cooperative basiswith a number of regional models.There are little communities aroundCalgary where they’re facing 8 to 10percent growth rates and they’rewondering why Calgary gets so much.I’ve had to ask, in a very nice way,why are they experiencing 8 to 10percent growth rates and other com-munities 200 miles away fromCalgary are losing population? Dothey understand that a successfulCalgary means they’re successful?And if Calgary is not successful,they’re not?

In Alberta, we were able to makea real breakthrough by getting theprovince to agree to a different fund-ing model for Calgary andEdmonton for transportation. Weneed to create that kind of environ-ment which allows us to considernew options with our federal andprovincial governments. They needto have the permission to be treateda little different.

We need autonomy that speaks toallowing Glen to have access to cer-tain revenue sources and Pierre tohave access to certain revenuesources, according to decisions madein their respective communities.This would allow each communityto create opportunities that areunique to it, and reflect and respondto its business climate, the social cul-tural climate and whatever otherneeds it has.

We don’t need another one-size-fits-all national housing program giv-ing every community exactly thesame access to the resources whetherthey need them or not. We’vebecome so preoccupied with treatingeveryone the same, that we’ve forgot-

ten how to accommodate differentneeds, and foster innovation andexcellence.

The need for a strategyMAYOR PIERRE BOURQUE:Montreal was once unbelievablyprosperous in Canada, in NorthAmerica, and then went through atremendous decline, that was caughtup in the province of Quebec’s inter-nal problems, which are not the sameas elsewhere. Montreal went througha time of very strained relations withthe provincial government.

The government of Quebecbecame somewhat like a corporationthat wanted to take all of Montreal’spowers and transfer them to theprovince. The emergence of QuebecFrench-Canadian nationalism gaverise to a very strong central power inQuebec City. Out of a $50 billionbudget, Montreal had a budget ofonly $2 billion.

And so Montreal slid into decline,300,000 or 400,000 of our more well-off citizens left for Toronto, and forother Canadian cities too.

But we hung in there. We got theeconomy back on track; we focused alot on the downtown area. We final-ly allied ourselves with the province,because there is no future withoutthe provincial government. We alsotried to create ties with the Quebecgovernment that had never existedbefore.

We created ties with other cities inthe province – Quebec City, the Cityof Sherbrooke – that make up theheart of urban life in the province.We tried making economic agree-ments. We revitalized Old Montreal,the downtown area; we created themultimedia centre that now gener-

ates 10,000 jobs. And now, we aresetting up a centre for the electronicsindustry and, along with the federalgovernment, we fostered biotechindustries and the aerospace industry.

We encouraged people to comeback to the city with construction,housing. We targeted the most needyneighbourhoods, neighbourhoodswith problems of poverty, integra-tion, and immigration.

So, while the action we have takenis still precarious, the City ofMontreal of today is not the same asit was five years ago and what was

once called “The Decline ofMontreal” is over.

Now we have to catch our breath.It takes time to keep on strengthen-ing the new economy, the openness,the social harmony, public transit,the infrastructures.

Now, the balance between theprovince and Montreal is comingback. And there’s a balance betweenMontreal and the federal govern-ment, because we also have interest-ing ties to Ottawa. We have to becareful not to create any antagonismsbetween the two.

So today, the city is doing muchbetter, especially now that we aregoing through the greatest municipalreforms in the entire history ofQuebec. And not only will Montrealget stronger, there’ll be a better dis-tribution of wealth among us,because before, Montreal was com-peting with Saint-Laurent, with thewestern part of Montreal Island.Now, we will try to unite the island.

And now, we have enough of a bal-ance to represent the whole ofQuebec within Canada, and that,too, is a challenge. And that is whythe five of us here need to work


We’re not here to talk about constitutions.We’re here to talk about the future of our cities,

the future of Canada’s cities, the future of Montreal.Mayor Pierre Bourque

18 Volume 2 No. 1

together, get to know each other.We’re not here to talk about consti-tutions. We’re here to talk about thefuture of our cities, the future ofCanada’s cities, the future ofMontreal.

ANNE GOLDEN:There’s so much evidence, why isn’tit resonating with the public? Theconsequences of fiscal instability,that cities at present are not sustain-able, that’s the kind of scenario thatwe’re looking at where hundreds ofmillions of dollars of debt growing tobillions of dollars of debt over adecade, clearly is not sustainable.The need for more secure sources offunding relative to responsibilities iscrystal clear to us, but why not toothers?

To me there are three reasons whyit’s not resonating: The first has to dowith the complexity of the issue forthe average person. It’s a constitu-tional issue and for the average per-son it’s just too much. The secondthing I think, is that the debate is notonly about money, it’s also aboutpower. In the private discussions Ihad at all levels of government whenI was looking at homelessness, I foundthe problem was not about money asmuch as it was about power. Thirdly,I think it’s about values; it is compli-cated because the consequences ofunderfunding have to do with socialjustice. We’re into an era when com-passion is out. The paradigm haschanged. This has to do with ourcapacity as cities to fulfill our destinyand to meet the needs of those whoreasonably expect us to do so.

Objective fact-based research iscritical, in conjunction with a broad-er strategy. To me the fundamentalquestion is, can we create a strategyto address what I hear as a kind ofviolent consensus about what thereal issues for cities are? We have ajob to do: cities are the future; we’rein a new era for cities and we needsustainable and reliable source of rev-enue to fulfill that.

MAYOR GLEN MURRAY:There is an incredible complacencyeven though in the last ten years atthe Organization for EconomicCooperation and Development,we’ve slipped from fifth to fifteenthmost productive nation in the world.That’s due to a decline in the skilllevel of our workforce and the rapiddeterioration of the conditions ininfrastructure within and betweencities.

At the same time there is a newtype of neo-conservatism that comeswith anti-urbanism. You beat up onthe cities, because that’s where thebig spending is. What do we do? Wecannot talk about solutions until wecan clearly make our case that there’sa problem.

NICHOLAS HIRST:Can we create a strategy? Can themayors create a framework? What

would it look like? It seems to me itwould have three parts: first, it wouldhave an educational input; you’dhave to sell it to the people. Second,it would have a lobbying input; youwould have to sell it to senior gov-ernments. Third, it would have acooperative input; people around thistable and others would have to gettogether and agree on a strategy forchange.

ELYSE ALLAN:The business community understandsthe need to ensure that we’re invest-ing in our cities; cities and cityregions have become the economicdrivers of nations. They are themajor generators of national wealth.

This is not just a Canada story –it’s around the world. In fact, it’smuch further ahead in other placesthan it is perhaps here.

Our Board of Trade developed five


URBAN COMPETITIVENESSStatement of Principles Prepared by

The Toronto Board of Trade

The Toronto Board of Trade believes an agenda on urban competitiveness must befounded on five basic principles:

1. Canada’s major urban regions must be competitive on a global stage. It is no longerappropriate to simply concentrate on the competitiveness of cities within Canada or evenjust North America. Our cities compete with more than 300 city regions world-wide –their challenges must be addressed in this context.

2. All levels of government in Canada bear responsibility for ensuring our cities are livable,functional, enlightened and commercially viable. Investments must be targeted at urban pri-orities and must be coordinated and integrated across government jurisdictions.

3. Cities must be given the ability to take greater control of their destinies. Regulatoryimpediments, jurisdictional disputes and financial limitations place a significant strain onlocal abilities to deal with local challenges. Cities in Canada must be given the tools to“grow up” in order to compete with other mature cities on the global scene.

4. Attitudes, policies, governance structures and priorities must change to reflect the real-ity that Canada is no longer a rural economy – it is an urban economy. Eighty percent ofthe population now lives in an urban area. Our GDP is driven by urban economies.

5. Maintaining a high quality of life in our cities is critical to the continued economic growthand social survivability of Canada. Offering citizens a safe, attractive, diverse and affordableurban environment is paramount to competitiveness. More than ever before, quality of lifedrives the success of a region – it can either attract or dissuade people, businesses andinvestment to our cities.

Volume 2 No. 1 19

basic principles with which I expectyou too can all agree. [See box onpage 18.]

DALE STANWAY:This is not only achallenge for gov-ernment workersand political lead-ers; the businesscommunity alsoneeds to come toterms with thesethings to ensuretheir environmentremains competi-tive.

ELYSE ALLAN:I don’t think busi-ness would ever sayit shouldn’t betaxed. I think theproblem we had asa nation over the past five years isthat when you looked at us on a glob-al basis, we weren’t in the game.Nobody is saying we have to be thelowest tax environment. I think wehave to be in the running in terms oftaxation levels, at least be in the ball-park. Nobody is saying make us num-ber one in terms of taxes, because ifyou do that and you screw up every-thing else, we’re still not going towin. I think there is a very clearrecognition that there is a cost todoing business anywhere. But let’smake sure that there’s a return fromwhat we are paying, and that return isbeing focussed and understood.

The other comment that I wouldmake is that when you look at all thewants that all the cities have, there isno way any of our governments canafford to provide them. Cities need totake advantage of the capital market.Here we are in the richest economythat we’ve ever had and there’s atremendous amount of capital in theprivate sector. We need to challengeour governments to engage the pri-vate sector far more aggressively inbringing their capital to the table to

finance some of the needs that citieshave. That can be done in ways other

than taxation with much more open-ness to public and private sector part-nering. We’re far behind as a nationin terms of public/private sector part-nerships. American cities have greatgovernment support, but they alsohave a number of vehicles for verystrong private sector participation.We can’t assume government canafford to do everything cities needdone.

PAUL MOIST:I think we need to focus. We couldeasily come up with 300 Canadianswho have a connection to but don’twork in municipal government rightnow. Our senior levels of governmentare full of former municipal politi-cians who have moved onto otherthings and who need to be re-engaged. I think we need to spreadthe lobby out. CUPE should be partof this lobby. By my calculation,there are 53,000 CUPE memberswithin these five cities with a com-bined payroll of about $2 billion.

While we have common interests,there are different solutions for theroads and streets and infrastructure.

Four provinces have provincial pub-lic insurance systems. The solution

for fundinginfrastructure isnot the same inToronto andWinnipeg. Theneeds are thesame. There’snot going to beone solution tocracking open ashare of thewealth. I thinkconst i tut ionalrecognition ofcities is desir-able, but I alsothink it’s a non-starter. If thatbecame the sin-gle pursuit ofthis group, Ithink we’d spend

a lot of time and effort and we’d beback here a decade from now withoutprogress.

I think the C5 needs to be main-tained, not instead of the Federationof Canadian Municipalities (FCM),but simply to focus. The FCM mem-bership is 5,000 governments, rang-ing from those serving populations of2,000 people to those serving a citythe size of Toronto. It’s exactly thesame as CUPE gathering together900 municipal locals: the Town ofKillarney has two members andToronto has 35,000 members and twolocals. We can’t sit in the same roomand have the same discussion. I don’tthink it’s either/or but I think thefocus that the C5 can bring to thesediscussions needs to be maintained.

MAYOR GLEN MURRAY:Winnipeg has survived because it hasthe most diversified economy inCanada and it most mirrors theCanadian economy. But we should bea city of two million people. Thegreat failure of the Canadian confed-eration is the fact that there’s nomajor city in the middle half of this


Mayor Philip Owen and Vancouver delegate Ivan Head.

20 Volume 2 No. 1

country. We are an undersized city forthe value of resources, agriculture,mining, electricity. Despite our eco-nomic potential, we are still toototally dependent on primary indus-tries. What we could find ourselveswith is a disintegration of this entirecountry and the aspirations of

Quebec in a very real way along withthat because we’ve become depen-dent on American hubs.

There’s a sense that Winnipeg hascapacity, that we’re more competitivebecause we are one of the few citiesthat can operate call centres andaccess centres in both languages. Wehave enough critical mass of fran-cophones that we do that.

We need a critical mass. Thestature and the prestige of the mayorsof the two largest cities of the coun-try, and Montreal as the largestFrancophone city outside of France,is extremely important. We’ve had afailure as mayors to work together asa team.

The blueprint idea that MayorDuerr has talked about I think is veryimportant. What if we sort of assem-bled this idea of revenues and respon-sibilities and said, well you know,cities cannot realistically pay forthese. Look at the balance ofaccounts. We can’t fix streets, wedon’t have the money. So someonehas to do it. Where is the moneycoming from? We all have the solu-tion. Montreal has a registration feefor vehicles that generates $30-40million for that city. Calgary gets $90million in gasoline tax. We get anincome tax and corporate tax points.If every city had what the other cities

did, if Mayor Lastman had all ofthose things, Toronto would berolling in dough. If you had a cut ofthe gasoline tax, and you had theincome tax and you had MayorBourque’s registration fee, you would-n’t have a financial problem rightnow.

We know these things can bedone, there’s precedence for them.Maybe the recipe is already there.Maybe each of us has a piece of thesolution and what we need to do issupport each other to get all of theingredients. I think maybe if wecould do that

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