"I would hope that cities – and I include Toronto here – ... would reflect on their own budget exercises and try to be prudent in their budgeting and budget within their means," Flaherty said.
Flaherty has little to offer municipalities and chides local governments `to be self-reliant,' `prudent' with finances
March 20, 2007
Bruce Campion-Smith in Ottawa
John Spears in Toronto
TheStar.com
The new deal for cities is dead.
Finance Minister Jim Flaherty delivered the death sentence yesterday, serving up a rebuke for cash-hungry municipal leaders who had come cap in hand to Ottawa seeking billion of dollars in new federal funding for pressing urban demands.
"The day in Canada of governments with their hands out to other governments (is) passing. It's time for governments to be self-reliant and to be answerable to their own taxpayers," Flaherty told reporters.
And he served up a slapdown to Toronto and other municipalities, suggesting that fiscal imprudence, rather than real need, was behind their demands for more money.
"I would hope that cities – and I include Toronto here – ... would reflect on their own budget exercises and try to be prudent in their budgeting and budget within their means," Flaherty said.
His comments sparked an angry reaction from urban leaders, including Toronto Mayor David Miller, who called the budget a "step backwards."
He said Flaherty and Prime Minister Stephen Harper are "out of step" with the fact that Canada is a suburban and urban nation.
"He's dead wrong about this country. The census just demonstrated that more and more Canadians are living in urban areas," Miller said.
"For Canada to succeed, we need investment in those cities ... . This budget does not meet the needs of Canada's cities in any substantial way," he said.
There was some good news – the Conservatives extended by four years the Liberal program to share federal gas tax revenues for municipal priorities such as roads, public transportation and water. That commitment, which now runs until 2014, means an extra $8 billion.
"They asked for a sharing of the gas tax in the budget today. We've extended that sharing," Flaherty said, adding that Ottawa will pump a record $33 billion into infrastructure over the next seven years.
"Of course, the major metropolitan areas like the GTA will share in that," he said.
The budget also creates a "Building Canada Fund" to be allocated to provinces and territories on a per capita basis for improvements to highways, public transit, sewage treatment as well as cultural and recreational facilities. This fund starts at $572 million this year, rising to $1.7 billion a year by 2013.
But municipal leaders hoping to get a share of the GST revenues, or a new federal fund to pay for transit expansion – two demands worth $7 billion a year – were left disappointed. They even failed in their bid to have the gas tax funding made permanent.
Even the extra cash was overshadowed by Flaherty's comments that shut the door on years of lobbying by municipal leaders to have Ottawa take a more active role in urban issues.
Instead, Flaherty said it was time for governments at all levels to "take care of their own knitting," suggesting that municipalities should take their fiscal gripes to the provinces, which have constitutional responsibility for cities.
For municipalities, his statements mark a dramatic turnaround – and a bitter disappointment – from the days when former prime minister Paul Martin promised a new deal for cities, and the pledge of not only cash but a voice in the federal issues that affect them.
Flaherty's comments confirm the worst fears of urban leaders like Miller who had long feared that Harper took a traditional view of the Constitution that dictates that Ottawa stay out of urban affairs.
"This budget appears to be a direct reflection of that philosophy ... . It's out of touch with modern Canada," Miller said.
Earlier this month, Miller helped unveil a strategy on behalf of the Federation of Canadian Municipalities to win $2 billion in permanent federal funding for transit.
"We had expected at an absolute minimum to see concrete steps toward a national transit strategy in this budget. Those steps have not been taken."
Miller says the municipal push for cash will continue.
"When you see the census result, people live in cities. They need their cities to be funded. They need to have proper access to programs and facilities, and people are going to stand up and demand it."