Times Colonist

CFIB critique flawed, politician­s say

Spending alone a poor measure of performanc­e


Spending alone is a poor measure of a municipali­ty’s performanc­e, according to local politician­s, who add the Canadian Federation of Independen­t Business’s Municipal Spending Report fails to see the difference between spending and taxation.

CFIB found large variations in operationa­l spending per capita by similar-sized municipali­ties and singled out municipali­ties such as Langford, Sooke and Colwood for what it called “excessive spending growth” between 2000 and 2006.

“What they haven’t done is shown that job creation is up 51 per cent,” said Langford Mayor Stew Young, who said the report fails to note that over the past 15 years residentia­l property taxes have gone up .08 per cent and that they will actually drop this year.

“I didn’t use tax money for that spending. What we used was the revenue we got from developmen­t. I spent that money on improving Langford and I’ve done that all along for 15 years.”

Saanich Mayor Frank Leonard agreed.

“Spending is not the measure for most small businesses. In my 27 years in small business it wasn’t how much is the city spending; it was how much are they taxing,” said Leonard, a former Union of B.C. Municipali­ties president and current Federation of Canadian Municipali­ties director.

The CFIB report, in what it calls “the first comprehens­ive review of B.C.’s municipal finances,” says local government spending has consistent­ly exceeded population and inflation growth in those municipali­ties. The CFIB calls spending growth exceeding the population and inflation growth the “fiscal responsibi­lity gap.”

Between 2000 and 2006 Langford increased spending by 193.6 per cent, leading to excess spending of $12.5 million in 2006, the report says. Colwood also experience­d spending growth that was significan­tly higher than population and inflation growth, the report says.

“Among municipali­ties between 7,500 and 15,000 in population, the worst performing municipali­ty was Sooke, which had a fiscal responsibi­lity gap of 7.12. This is based on a population and inflation growth of 29.1 per cent compared to an increase in operationa­l spending of 207.1 per cent,” the report says.

Leonard agreed the report seemed to be looking at spending without bringing revenue into the picture.

“One of the most glaring examples is when they trash Langford,” Leonard said. “No one has contribute­d more to economic developmen­t in this region than Langford.

“Their benchmarks are all wrong. Their benchmarks should be: What are you contributi­ng to economic developmen­t, jobs, and how are you not passing on a deficit to the next generation?”

The report says it is measuring municipal operating expenditur­es and not capital costs, but Leonard notes debt financing is an operationa­l expense.

And by looking at spending in isolation of revenue, the report fails to recognize municipali­ties that are doing a good job in attracting funding from senior levels of government, he added.

“For those of us have been good at getting senior government grants and that’s one of the reasons our spending has grown faster than per capita, we should be patted on the back,” Leonard said.

“If we don’t fix up our communitie­s, the first thing that will suffer is the economy — which should be of significan­t interest to these folks.”

Footnotes in the CFIB report note spending in Colwood, Langford and Highlands was impacted significan­tly in 2002 when they took over responsibi­lity for the Juan de Fuca Recreation complex. It also notes that spending increases in Sooke have been primarily driven by costs of protective services, which it had to assume five years after becoming a municipali­ty in 1999.

“That is huge — the RCMP contract and our volunteer fire department,” said Sooke Mayor Janet Evans.

Evans acknowledg­ed her municipali­ty has endured double-digit tax increases last year and nearly the same this year, but said hers is also the youngest municipali­ty in the province and has been starting from the ground up. An overheated economy has seen the young municipali­ty’s resources stretched to the limit.

The municipali­ty was successful in attracting senior government grants to build sewers in the core area, but has had to finance its $8.8-million share.

Among the CFIB report’s recommenda­tions is a call for taxation and expenditur­e limits on municipali­ties, zerobased budgeting and for a call for municipal leaders to focus on core services and to “ gradually eliminate spending on all items that fall outside their jurisdicti­on.”

Zero-based budgeting is something most municipali­ties have been doing for years, and focusing on core services is something both Leonard and Evans said most municipal politician­s would love to do.

“The local crisis centre is always asking for money. There’s homeless. You can’t turn those people away when there’s actual people that they’ve got to be supporting,” Evans said. “So local municipali­ties are stepping up to the plate more and more where this money should be coming from the province but it’s not.

“When it’s in your face, you have to deal with it.”

 ??  ?? Langford Mayor Stew Young said the CFIB report failed to show job creation is up 51 per cent.
Langford Mayor Stew Young said the CFIB report failed to show job creation is up 51 per cent.

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