Cities arm for power grab

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The following op-ed was published in the Calgary Sun and is posted at taxpayer.com

As Alberta Municipal Affairs Minister Doug Griffiths begins the process of negotiating “big city charters” with Edmonton and Calgary, it’s becoming very apparent what Alberta’s two major cities want out of these charters: More of your money.

A City of Calgary document obtained by the Coalition for Property Tax Fairness (the Canadian Taxpayers Federation is a member) reveals just what new taxing powers some of our municipal politicians may be pressing for.

In total, the City of Calgary is looking at a whopping 15 new fees, levies, taxes and other methods of increasing city revenues.

For starters, the city is on the warpath for an even bigger slice of gas taxes, and the freedom to stiff the drivers who pay them. While the federal and provincial governments currently share gas taxes with municipalities, the city wants either a greater share of the current tax, or the power to implement an additional gas tax of its own. That would be above and beyond the 25-cents a litre on gasoline that Albertans already pay.

Currently, the federal gas tax transfer requires that the city spend the money on roads and other capital infrastructure.

The city seems to think that this model is outdated and that it should be able to spend the money on whatever it likes, including day-to-day operating costs.

Next target for new municipal revenues in the city’s proposal is a share of gaming, alcohol and tobacco taxes.

After that, of course, it wants a slice of the federal and provincial income tax.

And as many in Calgary have heard suggested by a couple of business leaders, the city wants a municipal GST put on the table.

Perhaps most bizarrely, the city is even contemplating a property insurance tax, vehicle insurance tax and vehicle registration tax. Read that again: A special tax on insurance policies, some of which governments force us to purchase.

The list goes on: hotel taxes, land value capture taxes and property transfer taxes.

While politicians may enjoy the power to tax, they love the power to borrow.

Borrowing provides all the money that taxes would, less the political pain of raising taxes.

Municipalities in Alberta currently borrow money from the province through the Alberta Capital Finance Authority, which allows them to run up debt for the purposes of building infrastructure with interest rates lower than they would otherwise be able to obtain on their own.

The city’s document recommends allowing private developers to tap into this debt-underwriting program.

As in, if a local businessman wanted to build a new bowling alley, they could avoid going to the bank for a loan and just ask the city or province to lend them the money. Of course taxpayers would be on the hook if the business defaulted on their loan.

The province tried this “loan guarantee” program back in the 1980s and ended up losing billions of taxpayer cash in bad loans to meat packing plants, paper mills, oil upgraders and waste treatment plants.

This tax, borrow and spend manifesto is not yet official policy of the City of Calgary, but it is evidence that it is arming itself for a power grab from the province.

Minister Griffiths has clearly communicated he isn’t interested in handing cities the power to tax their citizens without a referendum. It’s a good start, but it might not be good enough. Once that door is cracked open, the tax-and-spenders at city halls across this province certainly have plans to bust the door, and your wallet, wide open.

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