Editorial: Why relying on federal handouts is no way to build a city

And it's definitely no way to build a subway line

June 16, 2016

By Trevor Melanson

Don’t get me wrong, the latest federal budget was good news for transit advocates. The Lower Mainland will receive $370 million for renovations and system upgrades over three years. Then comes phase two, in which major projects like the subway and the light-rail lines in Surrey will receive the feds’ support. The Liberal government will foot half the bill for those new lines, when traditionally it only covered one-third of such expenses. Like I said, it’s good news—an opinion Mayor Gregor Robertson has certainly expressed.

But here’s the catch: phase two is contingent on the Liberals being re-elected in 2020. A lot can happen in four years, meaning that money is far from certain—and the fate of key transit projects along with it. Meanwhile, what is certain is that Vancouver is a growing, densifying city—and Surrey even more so. In a perfect urban world, ground would have already been broken on the Surrey light-rail lines. But that perfect world would be one in which cities could raise the money themselves, and we don’t live there.

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According to the Fraser Institute’s 2015 Canadian Consumer Tax Index, the average Canadian family pays just 10.5 percent of its total tax bill to property tax, the main source of revenue for cities in Canada. Put another way, cities take home just a sliver of the tax revenue pie. Municipalities are thus left to beg the federal and provincial governments for the vast majority of the money required to fund anything that’s, well, literally ground-breaking. Indeed, the feds and B.C. will together cover 83 percent of the costs for those major lines, with the city picking up the remainder. And even that will be a struggle, requiring alternative revenue-raising tools (like the 0.5 percent regional sales tax voters vetoed last spring).

The solution? Rather than money flowing through Ottawa or Victoria and then into Vancouver, why not give cities a small slice of income or sales tax revenue in lieu of piecemeal handouts? No offence to the prime minister—or the people behind the Olympics or Expo, for that matter—but we shouldn’t need them to get a subway built in our city.

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