Calgary left to its own devices for mitigation efforts
Yet another meeting of Canada’s premiers is taking place this week, with the agenda including areas where the federal government plays a role — from either a funding perspective or policy standpoint.
However, Primer Minister Stephen Harper is not there.
While these Council of Federation sessions were never intended as First Ministers conferences, in the absence of Harper calling such gatherings, the annual meetings serve an even greater purpose than they did in the times of past prime ministers.
Prime Minister Pierre Trudeau held 20 such First Ministers meetings, Brian Mulroney hosted 14 and Jean Chretien seven.
Harper has led but one — in 2009 following the financial crisis. Given the many issues facing the country — whether it be health care policy, pension reform, the funding of post- secondary education or the challenges posed by aging infrastructure — one would expect more collective engagement form Ottawa, especially from the top.
No such luck.
One key item on the premiers’ agenda is how to improve and upgrade infrastructure.
And, in the case of Alberta and Quebec, how to fund and replace what has been destroyed by flood and fire.
Ottawa has come forward with $60 million to help rebuild Lac Megantic, Que., but nothing similar has yet been offered to Alberta.
When asked this week why this was the case, Calgary Centre MP Joan Crockatt said it was up to the provincial government to ask Ottawa for money.
“We are following the province’s lead here entirely. In Alberta we wait for the province to come to the federal government and see what we can do … they present us with the bills,” she said.
“We have not had any problems in the past. People were very happy in 2005. We are waiting for the province to take the lead.
The fact the last payment for the 2005 flood arrived just last May calls into question how well things really worked.
Calgary is facing a number of economic challenges, both short term and long term.
Short term there is the issue of sorting out the inadequate — some say, ill-conceived — disaster relief program set out by the province.
Of particular issue is the fact homeowners who choose to access government funding to repair their homes will also receive what is being referred to as a “black mark” on the title to the home. This, of course, will impact its resale value.
“Why would I choose to access funds when the impact on the value of my house could be to reduce it by a factor of 10?” asked one homeowner at a recent community meeting.
Such a trade-off may result in fewer homeowners accessing the program. Take it a bit further and it could be seen as the government ultimately distorting the market.
Some at this same meeting suggested the program’s structure would actually discourage people from applying for assistance. Government bureaucrats in attendance had a different view, taking pains to point out that Alberta’s disaster relief program is the best in the country.
But it all costs money. Far more than the money to be raised by two August fundraising concerts, which Crockatt encouraged Calgarians to attend.
“Those concerts are intended to pay for a lot of the things that aren’t covered by disaster recovery plans, federal or provincial. And I think those things are going to be part of rebuilding our communities, too,” she said.
If rebuilding homes is one issue, another is the “small” challenge faced by the City of Calgary to make up the dollars lost as a result of the inevitable decline in property values. The amount is not insignificant and it’s highly unlikely city council can — or wants to — hike tax rates across the board to bridge the gap.
There are, however, budgetary commitments to be met and that’s but one reason why the $52-million surplus arising from the provincial tax refund should not be returned to Calgarians. That money would not even get the Calgary Zoo back to even.
Calgary was already facing an infrastructure gap before the flood, a fact underscored by the release of census numbers Thursday that showed the city’s population increased 2.6 per cent year over year.
As Mayor Naheed Nenshi said Thursday, that kind of growth comes with mixed blessings.
And it’s not just infrastructure that was not keeping up with the population growth. The city’s arts and cultural institutions need physical upgrades and there are not enough recreation facilities to serve the population.
What’s apparent — even with the pricing differential for bitumen narrowing — is that new money is needed to fund what is required, not just to bring Calgary back to where it was, but to move it forward.
While a provincial sales tax — that is not revenue neutral — is one solution, the fact it requires a referendum makes it tough to put in place expeditiously.
There is, however, something that could work on a local level — and quickly.
That would be a municipal penny tax.
The idea, as envisioned by a group calling themselves Transformation Calgary, would be to add a one per cent sales tax to the GST.
Crunching numbers reveals this could add $350 million per year to the city treasury. And, in the best of all possible worlds, it would be equally matched by federal and provincial governments on an annual basis and be in place for five years.
Lest anyone worry the money raised would flow to general revenues and disappear, the intent is that it would be earmarked for specific purposes and administered separately by a civic trust, not unlike what is currently in place in cities such as Oklahoma, which boasts a performing arts centre, a new sports complex and an LRT system all made possible through such a tax.
Alberta already has an excellent governance model to refer to in this context — the Alberta Investment Management Corporation — to ensure the dollars are not diverted elsewhere.
This approach would help solve the conundrum of how to fund both current and future needs of the city. Even more important, because it would generate a stable stream of cash flow, the city would be able to borrow against it.
Who knows, it could even spread to other municipalities in the province and take the heat off the provincial coffers.
A recent letter to the editor in another newspaper written by a prominent architect based in Eastern Canada pointed to the perils of not reinvesting municipal infrastructure and used Detroit’s bankruptcy filing as an example of why it’s critically important:
“There is also a larger lesson to be learned for Canadian cities. The huge deficit in municipal infrastructure investment — in our case occasioned by a genuine inability of municipal taxes alone to fund the hard and soft infrastructure necessary for economic success and social well-being — is accumulating to an alarming degree,” the writer stated.
“It has been estimated that traffic congestion alone is costing Canada $10 billion a year. And that may be the easiest of infrastructure improvements to put into effect.”
Calgary can’t wait for the province to figure out how to fund what will prove to be expensive upstream flood mitigation projects — that’s ultimately what it needs to do, in addition to providing disaster relief.
It has to take matters into its own hands and not risk falling further behind.
At a time when not enough support has come from the federal government, along with the fact at least one MP appears to believe attending a concert — just as Marie Antoinette encouraged the French to eat cake — will help solve the problem, it feels a little like Calgary is being left to its own devices.
It all points to Calgarians coming up with a plan of our own. And this is a city where people design, finance and implement complex, multibillion dollar projects.
The truth is, what Calgary faces today is not much different.
What are we waiting for?