Last week, reacting to the fact that some municipal tax increases amounted to 10%, 15% and even 28%, the Minister of Municipal Affairs announced that staff from her ministry would go locally to verify whether these tax increases were justified.1.
This decision to send public servants to do audits is far-fetched in several respects.
It is so first because it is part of a culture of paternalism towards cities, a culture that is collectively costing us a fortune. In 2016, the City of Gatineau’s finance department calculated that the city spent some 74,000 hours a year reporting to the Quebec government. This is the equivalent of 41 full-time employees2 ! However, Gatineau has an Auditor General, a healthy democratic life, a healthy media life, external auditors, competent civil servants, and so on. Yes, there are many checks and balances, in big cities as well as in small ones, but Quebec wants to check everything anyway.
Check everything… but by the minister’s own admission, her officials have no real power to act. To limit the tax increase, a special law would be needed.
One wonders what the envoys from Quebec will do. Will they redo the work of local actors?
When elected officials adopt such tax increases, I can guarantee you that they have looked for other options. They know very well that they will have to be accountable to their citizens, and this, at the municipal council, at the grocery store, at the garage and even at family celebrations. They do not need Quebec officials to know that they are managing the public good and that they must do so prudently.
According to the Fédération québécoise des municipalités (FQM), the average increase in snow removal costs in 2023 is 23%. The president of the FQM explained that in his own municipality, the cost of winter road maintenance had increased by 109%. Inflation, housing crisis, labor costs, economic and demographic growth or decline, the sources of increased municipal spending are as numerous and as diverse as cities.
Will the minister’s employees redo all the calculations? Are they going to suggest that municipalities stop snow removal, reduce other services, lay off employees, etc.? ?
To say, like Éric Duhaime, that tax increases should be capped at inflation, is to think like a technocrat disconnected from the immense diversity of realities on the ground.
Letting local players decide on their tax increase is by far the most effective, least costly and most democratic formula.
Moreover, if the citizens of a municipality believe that the people they themselves elected are incompetent, they must mobilize, denounce them, replace them. Citizens of several cities have already succeeded in having their municipal councils back down. Let us remember, however, that other citizens, citizens who perhaps speak less loudly, support the decisions of their municipal council. Quebec officials will choose which side?
A tax hike is an eminently political gesture. Reducing taxes by 30% can be a good choice, increasing them by 30% too. When we survey citizens about their relationship to municipal taxes or income taxes, the majority group is neither the one who opposes nor the one who supports them. The majority group is the group that says it is ready to pay taxes, depending on what the government will do with it.
To make the Quiet Revolution, the Quebec government increased state spending by 400% in a few years. Should he have let it go?
Property taxes have many flaws. For example, they are not directly proportional to the income of the people who pay them, they sometimes act as a brake on citizens’ investments in their own homes and they do not increase with inflation (for its part, thanks to the inflation, the Quebec government is increasing its revenues).
However, their main shortcoming is that they do not generate enough revenue to enable cities to assume their new responsibilities.3responsibilities that have often been imposed by the Quebec government itself.
An example: between 2001 and 2014, in Gatineau, 40% of new hires were mandatory positions, imposed by Quebec (mainly police and firefighters). Today, the current government is even forcing cities to pay for school grounds from the Ministry of Education. The Government of Quebec is responsible for a large part of the tax dead end in which cities find themselves.
If the Minister of Municipal Affairs really wants to help property taxpayers, instead of wasting her civil servants’ time, she should carry out a real reform of municipal taxation.
As long as the tax tools of cities remain archaic, elected officials will be forced to use them and, unlike the minister’s officials, they will be accountable to their citizens.
2. The city of Gatineau has 3,500 employees.