Strong Fiscal Futures A blueprint for renewing the local government finance system Presentation to Mayors Caucus September 2019
Committee’s Mandate and Membership • Consider whether local governments have the right revenue tools for the range of services they now deliver; and • If not, to consider what changes are appropriate
Strategic Approach Local Government • Everyone benefits • Economic Growth Provincial Agenda • Not asking for $ already committed in Budget • Those largely outside of our direct control Cost Containment • Those within our direct control No quick fixes • Blueprint for change over the next decade
System Strengths and Challenges Strengths Challenges Low per capita spending and taxes; Substantial external cost drivers reducing share of revenue from business Legislative, assessment and debt Property tax unresponsive to economic financing systems of high quality and growth and not overly fair modern 20 years of infrastructure programming Cost of future infrastructure upgrades having impact on infrastructure deficit will be considerable
System Opportunities Canada relies Most US states more heavily on provide access property taxes to two major than most other sources of countries taxes Property taxes Income tax most common sharing with but many local jurisdictions governments is use common in supplementary Europe sources
Evaluation of Revenue Options Revenue Source Expenditure Revenue Management Sharing Local Grant Sources Programs
Key Directions for Change Resiliency • Keep/protect what we’ve got Economy • Manage External Cost Drivers Responsiveness • Grow the economy and share in that growth Fairness • New revenue to counteract property tax challenges Excellence • Local governments helping local governments
Resiliency Revenue/ Grants Other Taxes Regional Gas Tax Traffic Fines Trusts Hotel Room BCF and MIC TransLink Tax 65% Local Small share of DCC flexibility Communities property taxes
Economy Manage Externally Driven Costs Legislation to UBCM/Provincial require Better first Regional Management Provincial response transportation Committee to paramedical authorities, financial oversee shared commitment for services protocol outside Metro mandates new regulations
Responsiveness Share in improved economic growth • Local governments can help • Guaranteed share deposited to grow the economy, such in bank in high growth years as: • Spending for infrastructure • Guaranteed share of growth • Regional economic and other community that exceeds predetermined strategies building investments, which thresholds could be in low growth years • Regulatory harmonization • Share and thresholds to be negotiated Infrastructure and Grow the economy Community Development Bank
Fairness Expand Revenue Tools to make distribution fairer and more responsive to economic growth Property Tax Tax Sharing Principles Reform Arrangements
Excellence Creating a “made by local government” process for developing best practices advisory services Develop innovative and collaborative Develop meaningful Develop resource business tax materials to support mechanisms to indicators and local finance and tax achieve greater benchmarks decision making service efficiencies and economies
Status • Report unanimously endorsed at 2013 UBCM Convention • Overtures to the Province were declined under the previous government • May be an opportunity to refresh SFF now
Questions? • The SFF report is available on the “ Finance and Infrastructure ” section of UBCM’s website
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