• Tax Levy Debate

    Posted on February 4, 2016 by in Politics

    Closing the Leadership Gap

    On February 1st the Corporate Services committee received Staff’s report entitled “Infrastructure Environment and Funding Options”. The purpose of the report was to address the multi-million-dollar infrastructure deficit facing the city of Guelph; one of the most serious issues facing our community and the future of our city.

    The report moves on to Council for consideration as the entire committee approved receipt of the report; with the exception of our mayor, who by voting against ‘receiving’ the report effectively signalling that he believed that it was not worth consideration. Unfortunate but not uncommon, the infrastructure crisis has been exacerbated across the country by many a politician who is unwilling to look beyond the next election cycle to address this expensive time bomb.

    What is the infrastructure gap and how did we get here?

    Canada has underinvested in its infrastructure for decades, and is now playing catch-up. The Federation of Canadian Municipalities (FCM) has assessed the estimated cost to bring these systems up to a “good” standard is $172-billion to address rusting bridges, crumbling roads, crowded buses and subways, boil-water advisories, sewer backups and power outages across Canada.

    When it comes to Canada’s physical infrastructure, the federal government has the money, the provincial governments have the constitutional authority, and local governments have the responsibility for making the actual investments. Municipalities own over 60% of the country’s infrastructure but collect just eight cents of every tax dollar paid in Canada. The end result is that Guelph has been left holding the bag to the tune of almost $200 million.

    Meanwhile back in Guelph…

    No one on City Council has been more vocal on this issue and councillor Mark McKinnon. He has tirelessly fought to bring this issue to the forefront and he deserves a lot of credit for doing so. Unfortunately, if the Mayor gets his way it appears that councillor McKinnon’s efforts will continue to fall on deaf ears and the community will suffer in the long run.


    2014 Criticism of Pro-Infrastructure Platform

    On the surface this appears to be a rather drastic political flip-flop. The mayor himself ran on a platform, and continues to pontificate, his desire to move away from the lofty agenda of his predecessor and focus more on the fundamental services of the city such as maintaining basic infrastructure like roads and sidewalks. Even stranger, it was the Mayor himself who originally asked staff to come back to Council with options and alternatives to address the infrastructure deficit.

    Cam has been very clear as to why he refuses to consider a tax levy; however his rationale appears contradictory and irrational. The Mayor has proposed that council “look in the mirror” before imposing a tax on the community. This suggestion is that Guelph should find cost savings via some form of service rationalization prior to implementing a levy. Fair enough… however it was the Mayor who killed the service rationalization during the last budget deliberation even though it had the support of a majority of Council the night before.

    Furthermore, (and more importantly) the ‘best case scenario’ savings to be shaved from a TOTAL annual operating budget of just over $200 million couldn’t possibly address the existing infrastructure gap of $23 million let alone come anywhere near resolving the existing backlog of $165 million. Regardless of the any savings garnered from a service rationalization, the problem would continue to exist and get worse. Putting our head in the sand and ignoring the problem will not make it go away.

    Now don’t get me wrong, I’m not entirely sure I support the recommendation from our staff for a 2% levy over 10 years. There are a number of other factors and options to consider. The trend in forward looking municipalities is no longer to try to eliminate their infrastructure gap: The idea is to stop digging so that the hole doesn’t become deeper.  This is commonly referred to as asset management, it is not a new concept and the City of Guelph has been working on this for a while.

    The best example is that of car ownership. At the time of purchase, the owner is given a maintenance schedule in order to ensure the longevity of the asset. Changing the oil every 5,000 kilometres, maintaining the tire pressure, replacing the air filter and so on are all part of the asset management procedures the car owner is required to fulfill under the warranty conditions. Managing infrastructure assets is no different, in terms of the approach, than managing a car. Obviously there are additional complexities but the principles are the same.

    We do not yet have a complete and comprehensive asset management plan in place; it’s going to take a while to complete. The Mayor has stated that this is important to have this plan in place prior to implementing any other form of fiscal tool to solve our existing problem, however the Mayor actually attempted to eliminate both the Corporate Asset Management Analyst, and two supporting GIS positions specifically dedicated to this project during the past budget. While this might have brought this year’s budget closer to the CPI it is most certainly “penny wise and pound foolish” and would have done nothing to stop the bleeding. Thank goodness a longer term vision prevailed.

    A debate about levels of service and ratepayers’ willingness to pay would certainly be valuable. What is not debatable, however, is the fact that we have the responsibility to maintain vital services to our community. All governments – federal, provincial, and municipal – must work together and with the private sector to make immediate infrastructure repairs to protect public health and safety.

    We must act now to establish a fully funded, long-term plan to build roads, water systems, community facilities and transportation systems Guelph needs to support businesses and families, enrich our quality of life and maintain competitiveness in international markets. Regardless as to whether we can find operational savings through service rationalization or a robust asset management plan Guelph will continue to face a massive problem in infrastructure renewal over the next decade.  We must develop long-term infrastructure strategies that are based on real needs, not electoral politics.

    Without leadership, sadly, 10 and 20 years from now, future Guelph mayors will probably still be complaining about their infrastructure needs to provincial governments who will be complaining to federal governments about theirs. And many of our structural problems will be fixed with new duct tape instead of well-conceived plans.

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