Premier François Legault’s speech at the Union des municipalités du Québec (UMQ) convention last Thursday in Gatineau reflected what we like about the Premier, but also illustrated the gulf that separates the government from the municipal world.
Mr. Legault spoke to the crowd with the tone that was part of his success. He was frank, direct, funny too (“I’m very happy that the congress is in Gatineau and not in Lévis or Quebec – I tell you the same!”). His speech frankly illustrated, without embellishment, his concerns. Major electrification projects are underway. The infrastructures managed by the Québec government require investments. State employees are in negotiations. The ability of taxpayers to pay is limited, etc.
And the concerns of cities? Okay. We are given a list of programs that can accommodate their requests and for the rest, “there will be no miracles”. In short, there are occasional problems to be solved, but no major substantive problems. The Prime Minister has the merit of being clear.
The gulf between the reality of cities and this position is abysmal. I will detail two of the main disagreements.
A little is enough
The Prime Minister is concerned about taxpayers’ current ability to pay: he is therefore putting modest amounts on the table for the adaptation of municipal infrastructure to climate change. The numbers are hard to pin down, but it’s safe to say that cities are asking at least 10 times more than what the government is providing. For what ? Firstly because they know the needs on the ground better than the government, they have had studies done to support their demands, but also because they make a long-term calculation.
The president of the UMQ stated that every dollar invested now to increase our resilience results in savings of $15 in the future. In this respect, the Dutch example is the most eloquent1.
There, they understood that a lasting problem requires a lasting solution. Here, governments are managing this issue on an ad hoc basis while cities are experiencing “permanent climate pressure”.
The government is limiting disaster relief because it does not want to pay indefinitely. Cities are asking for the same. If lasting solutions are not found for the affected neighborhoods, they will continue to spend millions of dollars with each new flood. Blue-collar workers, firefighters, police officers will take risks and cost us dearly, every time. Hence the analysis of the mayors: the threat to taxpayers is greater if we do not invest, starting today. To recognize this is not to beg, it is not even to have vision, it is to know how to calculate.
To each his own problems
The other disagreement between the cities and the government is just as deep. For the Prime Minister, there is no problem with city taxation. It’s the same for everyone, he says, no one has room for manoeuvre. The discussion pretty much ends there.
It is quickly forgotten that successive governments in Quebec manage to lower taxes (1.7 billion just this year, 9.2 billion over 6 years!). Same thing in Ottawa: not so long ago, the federal government lowered taxes and the GST. From the margin, they have some.
Meanwhile, cities manage 58% of public infrastructure and receive only 8% of taxes and levies: they all have a huge hidden infrastructure deficit.
Inflation fills the coffers of Quebec and empties those of the cities. Neither the Quebec government nor the federal government pays all their municipal taxes. Both governments continue to give more responsibility to cities. They must mobilize for housing, for welcoming immigrants, for homelessness. They have to deal with climate crises, constantly. And don’t talk to me about the quality of management in the cities, they have absolutely no lessons to learn from Quebec and Ottawa.
Even the creation of wealth is not an answer to their difficulties. In today’s economy, the wealth produced is growing two to four times faster than the need for physical space for companies2. Cities must therefore offer more services to businesses and individuals, but without increasing the number of commercial buildings to be taxed. It is the very basis of municipal taxation that is crumbling.
We are often told that the money always comes out of the same pocket, that there is only one taxpayer. We must not forget that there is also only one citizen. Cities are not a lobby like any other, they are the spokespersons for local communities, the spokespersons for thousands of citizens who have very real needs, needs which they are finding it increasingly difficult to meet.
Cities are trying to be more efficient, trying to diversify their revenues, but without the help of Quebec, no, there won’t be any miracles.