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Canadian Urbanism Uncovered

Reflections after Tax Time

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So I did my taxes last month and, seemingly for the first time, I took note of the slip of paper from the landlord indicating how much he paid in municipal taxes on our apartment.

I suppose I have pretty high expectations of my municipal government but, having always been renter, I’ve rarely thought about the financial support that we city-dwellers provide. Without going into the nitty gritty of my personal finances, here’s what it boiled down to:

  • My share of municipal taxes represented about 1.5 months of my rent.
  • The amount of federal income tax I paid was equivalent to a bit more than 5 months of rent.
  • The amount of provincial income tax I paid was equivalent to 11 months of rent (including drug insurance, after deductions for past tuition).

Note: When I refer to my rent, I mean my portion of the rent of a reasonably-priced apartment in a triplex in NDG that I share with 2 roommates.

To be honest, my library card alone is probably worth about a fifth of what I contributed to the city last year, to say nothing of snow removal, garbage and recycling pickup, water purification and sewage treatment, cycling infrastructure, transit subsidy (fares only cover about 55% of the STM’s costs), pools, parks, festivals and more.

Another way to look at it is that 8% of the taxes I paid went to the municipal government, 63% to provincial and 29% to federal. And that’s before you factor in the GST and QST.

This is actually exactly what the Federation of Canadian Municipalities reported in 2008: only 8 cents of every tax dollar made it to municipal government. During the last federal election, the FCM called on the federal parties to re-examine this balance sheet, which was drafted back when the vast majority of the country’s population lived in rural areas. Today 80% of Canadians live in metropolitan areas and cities are floundering to meet the needs for infrastructure, transit, affordable housing, public security and environmental protection.

But as far as the Conservatives are concerned, cities are just not their problem. And they have a point: municipal funding has traditionally fallen under provincial jurisdiction. Yet projects like the Turcot interchange make me think that the city is invisible to the provincial government: the design they came up with may as well be in the middle of a field rather than a stone’s throw from tens of thousands of homes.

I am not the kind of person who complains about taxes. I am all for paying taxes and then taking full advantage of all those wonderful things they afford us like free health care, extremely affordable education, arts and culture funding, public transit etc. I have different levels of government to thank for each of those.

But I wonder, does it make sense that the city provides only 8% of the value of public services that I enjoy? And with so little funding from citizens, is it any wonder that the city is quick to compromise for anyone who promises profitable development? Do I want the majority of my taxes to be used by a government who thinks the city I live in is “mostly for students and immigrants,” as if that makes it unworthy of careful planning and investment?

Also, I clearly don’t know much about finances, so if any readers have an informed opinion or good sources about this, please share.

Image by alan cleaver_2000 under creative commons licence.

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7 comments

  1. Je trouvais ce texte intéressant jusqu’à ce que j’arrive à la fin. À ce passage, en fait:

    «Do I want the majority of my taxes to be used by a government who thinks the city I live in is “mostly for students and immigrants,” »

    Il faut faire gaffe de ne pas faire valoir des arguments bidons, au risque d’invalider complètement les arguments valables. Dans ce cas-ci, il ne faut pas un doctorat en science politique pour comprendre qu’un cadre du MTQ n’est pas le gouvernement. Louis XIV était l’État. Pas un cadre du ministère, d’autant plus qu’il n’est pas identifié par M. Ferrandez. C’est un gars un peu cave qui construit des routes, point barre. C’est dommage qu’il ait cette vision de la ville, espérons que dans 10 ans il n’y en aura plus des caves comme ça au MTQ, mais ça reste un cas isolé.

    Vos impôts allant au gouvernement du Québec servent toutefois à financer un système de santé universel, une éducation publique de qualité, l’assurance-emploi pour les chômeurs, le bien-être social pour ceux qui ne sont pas aptes à «relever les défis du capitalisme», à aider des PME en Gaspésie et au Lac-Saint-Jean, et à garder en vie le gouvernement le plus socialiste en Amérique du Nord.

    Peut-être que vous rêvez de Bixi la nuit, de voir votre ville réaménagée par des architectes danois, que les nids-de-poules soient réparés et que les bus passent à la minute à minuit sur du Parc. Moi aussi, j’y rêve.

    Mais ce n’est pas en pillant un gouvernement déficitaire que vous y arriverez. Même si vous l’identifiez à un cadre du MTQ dont vous ne connaissez même pas le nom.

  2. The city also taxes commercial which probably provides about the same amount as residential in gross amounts. This is passed on to consumers through their purchases, whether of milk, clothing or whatever.

    Probably around 10 or 20% of the city’s gross revenues come from other sources such as permits, fines, interest etc.

    You are looking at the amount you are paying, which is very low. But look at the average evaluation of residence. The average residence is probably paying around $3000 a year in direct municipal taxes, quite a bit more than a month’s rent.

    Residents also then pay the school taxes. My combined taxes have more or less tripled in 10 years. 

    And if you want to go ballistic, look at the total school costs between island and rest of quebec…

  3. Thanks CJ.
    As I understand it, property tax works on a square-foot-of-ground-space basis. Since relatively few people live in single-family dwellings in Montreal, it would actually be quite low per capita (although i hear a different, more lucrative system is in place for condos).

    And yes, there is additional city income from business taxes, but then again the feds and province also tax businesses. I believe this is taken into account in the FCM’s calculation, but the city still seems to take in a low proportion considering the infrastructure costs they pay and the social issues they are expected to tackle.

  4. True, this all started back in the day of Martin & Chretien down loading. The feds downloaded cuts to the provincials who downloaded to the municipal. Instead of being called downloading, it should have been called off-loading.

    The biggest problem with gov’t budgets is that a very high proportion is labour. In the case of municipalities it is around 70% average. Because of labour contracts, labour costs only go up.

    But revenues do go down. This would normally be a good thing as it would force the municipal gov’t to put it’s house in order. They could basically go and say to the provincials, OK you want us to provide social housing, kick into the pot. But the result has actually been, let’s borrow more money and hope it works out.

    So interest charges are now a very high percentage of costs.

    I have not ripped apart the cities financials for a while, as you can tell with my estimates. But taxes are high enough, it is matter of readjusting how they are spent.

    The average blue collar worker has a starting salary higher than the median HOUSEHOLD income on the island. And his benefits are gold plated. Your garbage man makes more than you do, so does your bus driver.

  5. Not that I have much sympathy for Paul Martin, but he did run for PM with an ‘urban vision’ and a commitment to prioritizing urban issues. We all know the result of the Liberal Party meltdown, so one can only speculate about how things could have been….

    There was a web-site back then which offered interesting analysis of local government issues: http://www.localgovernment.ca/show_libary.cfm?id=94

    Since the subject of ‘urban empowerment’ has lost momentum, the Local Government Bulletins have been discontinued….

  6. I agree with the general point: the services which come from the city are those which most affect our daily well-being and they are worth paying for. However, it is very unjust when some much of our tax contribution is siphoned off (the school tax is totally inequitable).
    Québec needs modern cities and I mean modern, not reruns of planning approaches of forty years ago.
    Whoever said that about immigrants and students is despicably incompetent and I hope profoundly that he not concerned with decisions abut Montréal affairs,

    David Tighe

  7. Let’s not forget that many of the cities initiatives are also funded as well by the provincial and federal governments. All of the cities festivals have large contributions made my those levels of governments. All major infrastructure projects do as well including public transportation like all the metro renovations and the new metro cars. Even the Bixi bike receipt funding from both levels and is now using tools from the federal gov’nt to sell the program abroad. The city of Montreal has a 4.3 billion dollar budget which seems like an ample amount for the general governance they are mandated with. 25% of the budget goes directly to infrastructure (road, water etc) and public transport. I wonder how much money they wasted with their unwarranted half assed proposal for Turcot. Ten’s of thousands of homes – ha learn how to count.

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