Over the next few days, Quebec municipalities will adopt their 2022 budget. Other cities will adopt it in the coming weeks.
The crisis of recent months, combined with various meteorological events, has demonstrated the difficulty of cities in adapting quickly to such constraints. This is why the Quebec government must regularly come to the aid of municipalities. The latter must also dip into their surplus or abandon major projects to meet these new financial constraints. This situation is untenable in the medium term, especially since the health crisis is not over and the climate crisis will intensify in the coming years and decades.
If cities are to become more resilient to different crises, city budgets must become so too. They must have the financial flexibility necessary to put in place measures and invest today in infrastructure that will allow them to adapt to current and future crises, including global warming.
Today in Quebec, on all municipal revenues, the property tax represents 50%. In some cities, the proportion of property income is much higher, going up to 78%, for example, in the case of Quebec City.
The two other main sources of revenue for municipalities come from services rendered and pricing (18.6%), and transfers from Quebec (17%).
End dependence on property tax
To be more self-sufficient, cities must have a greater diversity of sources of income. This would help make them less dependent on Quebec. They must first use all the leeway they have. We are talking more specifically about the pricing powers that they can diversify to reduce the proportion of property tax.
To do this, cities should quickly adopt eco-tax measures. Under the polluter pays principle, this budgetary orientation would give them greater financial leeway in the short and medium term, while working effectively against certain environmental nuisances.
Here are some examples of eco-tax measures that cities could use.
The first is the pricing of residual materials sent to the landfill. Several cities are already doing it in Quebec.
In Canada, Quebecers are at the back of the pack, sending 385 kg of waste per person to the dump every year.
This tax measure would have the effect of inducing better behavior among citizens, while reducing the costs associated with landfilling for cities.
Then, cities could use pricing for overconsumption of drinking water and its commercial use. Once again, Quebecers are the champions with a consumption of 400 liters of water per day, compared to 329 liters on average per Canadian. The use of water meters should be considered for all users of the resource.
Several companies make profits thanks to the drinking water produced by the cities. In Quebec, cities cannot make a profit on the goods and services they produce. The government should change this legislative loophole, which would allow cities to charge more for the use of drinking water for commercial purposes.
For example, cities could impose a higher tariff on the use of the drinking water they produce for beer and soft drinks.
The imposition of a higher tariff when issuing building permits based on the rate of soil mineralization of real estate projects should also be seriously considered. The more impermeable the soil, the more rainwater will flow into the sewer pipes. The costs of sewer backups, broken pipes and seasonal flooding will increase with the climate crisis. We must therefore take all means to reduce soil mineralization in cities.
Finally, we cannot talk about eco-taxation without talking about the pricing for the use of solo cars. In Quebec, it is one of the leading causes of greenhouse gas emissions. Some cities with higher population densities should use more commercial and on-street parking pricing. Serious consideration should also be given to the use of road tolls in some cases.
Cities can already take action to diversify their sources of income. By using the principles of eco-taxation, this will have a double impact thanks to the reduction of certain expenses. However, we cannot envisage greater fiscal autonomy without reviewing the fiscal pact with Quebec. This is what we will talk about in the next text.