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OPINION: Unraveling Municipal Tax Hikes and the Burden of Past Neglect

First train into Medicine Hat, Alberta (Photo Provincial Archives of Alberta Flickr)

In the tumultuous world of municipal governance, the perennial call for fiscal responsibility and cost reduction during election seasons has become a familiar refrain. Every candidate, seems to echo the same sentiment: "Council needs to reign in its fiscal belt and lower costs for our community." I, too, found myself espousing this mantra during my council campaign in 2010, unwittingly perpetuating the cyclical nature of municipal financial challenges.

As we witness tax increases looming across major cities like Toronto, Calgary, and Ooyoos, ranging from 2 all the way up to 39 percent, the knee-jerk reaction is to hold the current mayors and councils responsible. However, it's time to question whether the problems of today truly stem from the decisions made in the present or if we are unfairly placing blame on those currently in power.

In reflecting on the situation, I am reminded of a line from Shakespeare's "The Merchant of Venice": "The sins of the father are to be laid upon the children." Could it be that the issues we face today are a result of inadequate planning and decision-making by past mayors and councils?

Municipalities operate under the constraint of not being able to run deficits, forcing them to navigate each year with the resources at hand. While some may scoff at the notion that all municipalities spend wisely, it is crucial to acknowledge that the majority do their best to allocate resources judiciously. However, the root of the problem lies in the long-term consequences of decisions made by councils in the past.

One pervasive issue is the electoral cycle dance where councils, especially in the years leading up to an election, manipulate tax increases to present a facade of financial prudence. This tactic involves implementing incremental tax hikes, each attributed to different justifications: past council decisions, community needs, and the purported effort to restore fiscal order. The result is a seemingly miraculous near-zero tax increase in the election year. This approach, while not universal, has been employed frequently, hindering long-term financial planning.

Yet, the escalating costs of doing business cannot be ignored. Prices for essential infrastructure, equipment, and personnel are continually on the rise. Those who anticipate a return to pre-2019 prices after the economic challenges faced by Canada are likely to be disappointed. In my four decades on this planet, I have witnessed prices only moving in one direction—upwards.

The heart of the matter lies in planning for the future. While every municipality desires growth, the luxury of time differentiates councils today from those 30 to 40 years ago. The pipes buried beneath our feet were brand new in the 70s, 80s, and 90s, but now they are reaching the end of their lifespan. Today's mayors and councils must grapple with the reality that infrastructure replacement and repairs are imminent, necessitating immediate action and strategic planning - which all come at a cost.

The mayors of yesteryear focused on growing their communities, often neglecting the long-term consequences of aging infrastructure. They sought growth while keeping taxes low, thereby limiting funds for future generations. Fast forward to 2024, and present-day municipalities find themselves caught between the imperative to foster growth and the responsibility to rectify the past's lack of foresight.

The current tax increases, whether 10 percent or 7.8 percent, are undoubtedly a bitter pill to swallow. However, perhaps if councils from decades past had prioritized financial prudence and prepared communities for the future, we wouldn't be grappling with the burdensome consequences today.

It's time for a collective acknowledgment that effective governance requires not only addressing current challenges but also planning for more sustainable future.

1 Comment

I would also suggest that reserve fund planning from 1990 to 2020 was overly conservative to satisfy the "budget appetite" and the significant changes to the landscape during and post-COVID were not even a remote possibility in most planning.

Replacement of fire apparatus, a fairly specialized market, usually happens on a 15 to 20 year cycle and municipalities planned for that long-term future cost with typical projections of inflation at 2-5%, and often less as "who knew what things will look like that far out?"

Unfortunately starting in 2020-21 we started to see fire apparatus double and sometimes triple in price due to part and materials shortages. An aerial tower that may have been $1.2M in 2019 can now come…

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