Spending has grown more than three times the rate of population over the past 12 years in Canada’s three largest cities — Toronto, Montreal and Vancouver — and in Canadian municipalities overall, according to a Canadian Federation of Independent Business (CFIB) report.
“Municipal officials claim they lack sufficient revenue, and argue that cities need … increased taxing authority. Our report shows the real problem is overspending,” says CFIB executive vice president Laura Jones.
This spending problem is not just confined to Canada’s largest cities. From 2000 to 2011, inflation-adjusted spending grew by 55% in all Canadian municipalities, while population only grew by 12%. The increases in spending are largely driven by public sector wages and benefits, which consume between 52% to 67% of local government operating spending in the three big cities.
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“From 2000 to 2011, city staff in all Canadian municipalities increased by 25%, more than double population growth,” says Mike Klassen, CFIB BC director of provincial affairs. “Combine that with wages and benefit packages that are more than one-third higher than comparable occupations in the private sector, and you can begin to understand the causes of overspending by our cities. It adds up to a cost of over $10,000 per Canadian family of four during the same period.”
“It’s time that we changed the conversation to move away from the persistent requests for new tax revenues from our local governments to one that addresses spending challenges—responsible policy-making depends on it,” suggests Laura Jones.
To read Big City Spenders report, visit www.cfib.ca.