IMFG Research Publications

Permanent URI for this collectionhttps://hdl.handle.net/1807/78776

Questions of how to finance and govern municipal policies and programs are at the heart of all city-building discussions. Since its founding, the Institute on Municipal Finance & Governance's research and programming has brought these issues to the forefront: informing policy solutions at the local and provincial level, encouraging practitioners across the policy spectrum to apply the municipal finance and governance lens to their work, and generating interest in these topics among the general public.

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Flooding: Toward a Municipal Contribution to Economic Risk Sharing
(Institute on Municipal Finance and Governance, 2024-09-12) Deschamps, Bernard; Gachon, Philippe; Leclerc, Michel; Boudreault, Mathieu
In Québec, flood damage costs have risen sharply over the past 40 years, partly due to population and property growth in flood-prone areas. This phenomenon is exacerbated by extreme weather events, such as torrential rains, some of which are on the rise in southern Québec in spring. Today, these costs are primarily covered by provincial and federal financial assistance programs and, to a lesser extent, by private insurance. These cost-sharing mechanisms give rise to moral hazard because they do not encourage municipalities or disaster victims to reduce risk. Municipalities need to be included in cost sharing because of their crucial role in land use planning and risk management. Similarly, disaster victims need to be included because they also have a role to play in reducing risk. This paper proposes and analyzes an economic contribution mechanism for municipalities that distributes the cost of damage to residential buildings more equitably. (Equity refers to a fair and just distribution of the financial burden based on the relative level of exposure to risk and the ability to reduce the risk for all parties involved.) The contribution is calculated for three medium-sized municipalities in Québec based on the sum of the average annual damage to each of the residential buildings located in their jurisdictions, and on property values. Three observations are drawn from this analysis: 1) a municipality's level of exposure is not correlated with its property value; 2) the low damage rate of a majority of buildings located in flood-prone areas justifies maintaining these buildings in these zones, provided that mitigation measures are implemented; and 3) relocating a minimum number of buildings would considerably reduce the municipality's economic contribution to damage costs. Implementing an economic contribution mechanism for municipalities and exposed citizens is intended to reduce the moral hazard and inequity generated by the current approach and encourage municipalities to implement mitigation and risk reduction measures. All stakeholders could equitably finance these measures.
Levelling Up Innovation in Local Government: An Evaluation of International Smart City Competitions
(Institute on Municipal Finance and Governance, 2024-08-28) Zwick, Austin; Spicer, Zachary; Eben, Aaron
The rising popularity of smart city technology and digital government has prompted many national governments to attempt to spur municipal governments to adopt new tools aimed at digitalization, modernization, and innovation in a movement collectively known as “smart cities.” With few tools available to mandate that municipalities pursue a smart city approach, several national governments have turned to incentive-based competitions, launching state-led contests for their cities to upgrade their capabilities and offering millions of dollars in funding and organizational resources to incentivize communities to participate. Even for cities that do not win, these contests have created opportunities to critically assess their smart city aspirations and revisit long-term planning. Despite the intertwined histories of the smart city concept and urban competitions, limited research exists on the impact and influence of smart city competitions on city processes, plans, and operations. We ask the question “Is the competition model a good method to advance technological adoption in cities?” This paper addresses this gap by exploring in depth four different government-led smart city challenges – one each in the United Kingdom, the United States, the European Union, and Canada. By examining the program goals, competition mechanics, and publicized outcomes of each, then evaluating and comparing them through an urban change framework, this paper identifies the challenges inherent in a nationally driven, centralized approach to competition funding of municipal programs. It finds that these competitions were very effective at realizing the desired learning outcomes at the individual, organizational, and city levels: they helped generate new ways of thinking about technological solutions, and they supported the building of new relationships to address urban challenges for winners and non-winners alike. However, in terms of institutional and system change outcomes, the results of these competitions were much more limited. They were often most impactful for the city winners who were able to realize projects, and for national governments piloting a novel funding-by-competition model. We conclude by making policy recommendations on how to improve the implementation of this new model for the future.
Changing Patterns of Governance in Metropolitan Regions: Australian and Canadian Perspectives
(Institute on Municipal Finance and Governance, 2024-07) Sansom, Graham; Taylor, Zack; Baker, Janice
In May 2023, the Ontario government announced that it planned to dissolve the Region of Peel and replace it with three single-tier cities. Meanwhile in Australia, the Greater Sydney Commission had launched a plan that split Greater Western Sydney in two. With this context, IMFG convened a public panel entitled “Changing Patterns of Governance in Metropolitan Regions: Australian and Canadian Perspectives” in the fall of 2023. Although the Province of Ontario reversed course and the New South Wales government abolished the Commission to centralize control, the discussion highlighted emerging trends in regional governance in Australia and Canada more generally, and Peel Region and Greater Western Sydney in particular. Zack Taylor provided an overview of the increasing need for effective regional governance to manage the many societal pressures facing Canada and explored contemporary models across the country and suggested future directions. Graham Sansom reflected on how similar issues are playing out in Australia, where state governments, notably in New South Wales, were bringing about significant changes to metropolitan planning and governance. Janice Baker highlighted the sheer complexity of untangling the Peel Region’s operations, combined with the lack of both a clear definition of the problem dissolution was intended to address and of the due diligence in making the decision to go ahead. The discussion made clear that in both countries, the balance of responsibility for sound metropolitan governance rests with provincial or state governments. The paper concludes that current approaches to metropolitan governance in both Canada and Australia are falling short and puts forward key themes drawn from the panelists’ insights.
The Municipal Role in Immigration
(Institute on Municipal Finance and Governance, 2024-06) Preston, Valerie; Shields, John; Preugger, Valerie; Paquet, Mireille; Thayaalan, Sivakamy; Eidelman, Gabriel; Neufeld, Spencer; Forman, Kass
The ninth report in the Who Does What series from the Institute on Municipal Finance and Governance (IMFG) and the Urban Policy Lab examines the role that municipalities play in immigration and their ability to fund, manage, and deliver services and implement policies to respond to new arrivals. Valerie Preston and John Shields show how non-governmental organizations and municipalities support international migrants, the complex links between them and the other orders of government, and the tensions and challenges in these relationships, using examples from Ontario. Valerie Pruegger explores the journey to get a municipal immigration policy approved by Calgary City Council, how it was subsequently implemented, and the various barriers encountered along the way. She identifies the strategies that were successful in overcoming these challenges. Mireille Paquet and Sivakamy Thayaalan examine what is needed to help municipalities handle the situation of residents who live with precarious immigration status or without any immigration status. They argue that municipalities need to have a role in the governance of immigration in Canada.
Land Use Planning to Mitigate Climate Change in the Greater Golden Horseshoe: An Analysis of Potential Scenarios
(Institute on Municipal Finance and Governance, 2024-05-23) Turner, Clara; Allen, Jeff; Chapple, Karen; Smith, Sarah A.
This paper assesses the potential effects of housing development on regional greenhouse gas emissions in Ontario’s Greater Golden Horseshoe. Using models of different development scenarios based on household vehicle kilometres travelled and energy use, we evaluate the impacts of different forms of new housing production on greenhouse gas reduction targets and suggest housing and land use best practices and policy approaches. We model core scenarios of development from 2023 to 2030 that reflect current debates on housing development and land use planning in the region that include Build as Usual (on-going intensification); All-Sprawl (under recent policy changes); and four alternatives: Business as Usual, Moderate, Limited, and No Sprawl. Our findings suggest that aggressive intensification would reduce greenhouse gas emissions by as much as 26 percent, with particularly significant and compounding effects to be expected over the long term. We conclude that progressive land use planning and other mechanisms by the provincial, regional, and municipal orders of government that reduce the emissions generated by buildings, preserve open space that provides critical carbon sequestration, and reduce vehicle miles travelled, should be aggressively strengthened to build on progress made under the Province’s Growth Plan for the Greater Golden Horseshoe.
The Municipal Role in Child Care
(Institute on Municipal Finance and Governance, 2024-05-02) Friendly, Martha; Cleveland, Gordon; Colley, Sue; Vickerson, Rachel; Ferns, Carolyn; Holt, Carley; Eidelman, Gabriel; Neufeld, Spencer
In 2021, the federal government introduced a Canada-Wide Early Learning and Child Care (CWELCC) program, to be implemented through federal–provincial/territorial bilateral agreements. The program followed on the federal government’s budget commitment to provide parents with, on average, $10-a-day regulated child care spaces within the next five years. With the notable exception of Ontario, along with, to a limited degree for some years, Alberta, child care in Canada has not historically been delivered by municipalities. The CWELCC provides an opportunity for a significantly enhanced role for municipalities to increase access to quality child care. In this series of papers, the authors examine the ability of municipalities to fund, manage, and deliver child care in response to the increased demand. Martha Friendly reviews international precedents for federally funded and municipally managed and/or delivered child care with a view to learning from their experiences and considers the advantages that a heightened municipal role could play in strengthening Canada’s newest social program. Gordon Cleveland and Sue Colley investigate the roles and responsibilities of the different orders of government and how they will change in light of the CWELCC, with a focus on actions that Ontario will need to take over the next 20 years. Rachel Vickerson and Carolyn Ferns discuss how governments can play a role in addressing the dire need for early child care educators, while Carley Holt proposes a roadmap for municipalities that brings stakeholders together to establish distinct approaches for their communities. Municipal Friendly explores how municipalities can become more significant players in boosting access to early learning and child care, considering both public management and public provision as opportunities. Cleveland and Colley look at the history of the delivery of child care in Ontario, the changes that the CWELCC will bring to the municipal role, and the importance of municipal involvement in provincial planning. Vickerson and Ferns discuss the importance of staffing; they argue that municipally operated child care provides, on average, better working conditions and wages than private or non-profit care. Holt provides examples of cities across Canada that have defined a role in supporting accessible, equitable, and high-quality early learning and child care initiatives, and presents a list of seven key actions that municipalities can take to achieve these goals. Provincial Friendly notes that the implementation of the CWELCC’s goal of reducing parent fees substantially was met, or nearly met, by all provinces and territories by the end of 2022 – but that this success has driven demand for more child care programs, turning a spotlight on the need for equitable expansion in each province. Cleveland and Colley provide a list of actions Ontario will need to take over the next 20 years to fully develop the early learning and child care system, including more operational funding, better compensation for educators, loan guarantees for capital expansion for both non-profit and public organizations, and increased subsidies for children with special needs. Vickerson and Ferns recommend that provinces improve their expansion planning, including removing legislative barriers, and develop province-wide workforce strategies and pay scales for early childhood educators. Federal Friendly notes that, until 2021, there was no defined federal role in, or funding for, building a Canada-wide child care system. She reviews international precedents from the European Union, where senior governments provide funding and goals, while municipalities largely manage and deliver child care, based on the principle that services should be delivered by the level of government closest to those who are affected (i.e., subsidiarity). Cleveland and Colley foresee the necessity for further funding from the federal government to meet the expected demand for child care spaces in Ontario over the next 20 years. Intergovernmental cooperation Friendly points to examples of new kinds of partnerships between municipalities and provinces, such as a municipal organization in Manitoba that worked with the provincial government, using provincial and federal funds, to create and construct modular child care centres in rural and First Nations communities. Cleveland and Colley criticize Ontario’s lack of collaboration with local municipalities in child care planning since signing the CWELCC agreement, and call for the formation of a new provincial body to ensure that Ontario’s Child Care Action Plans reflect municipal knowledge and priorities. Vickerson and Ferns argue that the federal government should include municipalities in child care policy-making. Involving municipalities in the CWELCC agreements’ intergovernmental meetings and its Implementation Committees would enable them to align child care with other priorities and bring local expertise in operation and system management to the table. Holt notes the importance of creating a board or committee that focuses on early learning and child care and involves key stakeholders and all order of governments in order to form partnerships and create collaborative, sustainable solutions.
Reforming Statutory Public Hearings for Planning
(Institute on Municipal Finance and Governance, 2024-02-15) Moore, Aaron A.; Caporale, Alexandra
Throughout Canada, provincial legislation requires municipal governments to hold public hearings on certain issues pertaining to land use planning, including amendments to official and comprehensive plans and zoning bylaws. The aim of these statutorily required public hearings is to provide concerned parties with a forum to comment on proposed developments and other land use matters in front of the body responsible for rendering planning decisions. However, many have criticized the effectiveness of statutory public hearings and questioned whether they should be reformed or removed altogether. In a new paper for the Institute on Municipal Finance and Governance, Aaron Moore and Alexandra Caporale interviewed a variety of stakeholders to examine the entire rezoning and amendment process in four cities: Toronto and Brampton in Ontario, and Vancouver and Surrey in British Columbia. The authors acknowledge that public hearings are a necessary part of the planning process, but provide four recommendations to address what are often seen as ineffectual forums for public participation. In brief, they recommend public hearings be held earlier in the planning process; be located in neighbourhoods where proposed developments will take place; are restructured to be less antagonistic and more amenable to open discussion; and include all members of the pertinent decision-making council or committee, or their representatives.
Decarbonization of Buildings in Canadian Cities: Using Property Assessed Clean Energy (PACE) Financing to Attract Private Capital
(Institute on Municipal Finance and Governance, 2023-12-18) Stewart, Robert
Building decarbonization (reducing emissions from buildings) is a key issue in major Canadian cities where buildings are one of the largest sources of emissions. One way to fund building decarbonization is property assessed clean energy (PACE) financing. PACE allows property owners to access long-term financing for energy efficiency upgrades, secured through a lien on their property taxes. In a new paper for the Institute on Municipal Finance and Governance, 2022–2023 Richard M. Bird Post-Doctoral Fellow Robert Stewart outlines three approaches to PACE financing: government administered and financed; privately administered but government financed; and privately administered and financed. For the third approach, Stewart discusses the use of sustainability-linked bonds (SLBs) to attract private capital to PACE programs. SLBs are a type of debt which ties emissions reduction targets to the interest rate, meaning the rate could climb if targets are not met. Finally, the paper proposes that municipalities establish special purpose entities to administer PACE programs for commercial buildings and capitalize them by issuing SLBs.
The Municipal Role in Long-Term Care
(Institute on Municipal Finance and Governance, 2023-11-30) Armstrong, Pat; Balasal, Daniella; De Santi, Nadia; Hoy, Shirley; Eidelman, Gabriel; Forman, Kass; Neufeld, Spencer
By 2036, approximately 25 percent of Canadians will be over the age of 65. This demographic shift, combined with the acute crisis brought on by the COVID-19 pandemic, has made reforming long-term and seniors’ care an urgent issue. In general, responsibility for providing care to seniors falls to provinces, which in turn benefit from significant federal transfers to help fund services in this area. In Ontario, however, municipalities share in the delivery of seniors’ care, and are required to run a minimum number of long-term care homes. Moreover, their responsibilities in urban planning extend to designing age-friendly communities that meet the needs of older populations. The seventh report in the Who Does What series from the Institute on Municipal Finance and Governance (IMFG) and the Urban Policy Lab examines the role that municipalities play in long-term and elder care, with a special focus on Ontario municipalities. Pat Armstrong argues that municipal long-term care facilities provide the best care and working conditions relative to private and for-profit homes. She calls for Ontario to build upon its role with respect to funding and regulating municipal long-term care homes by improving wages for workers in these facilities. She also suggests that the federal government apply conditions to transfer payments to encourage other orders of government to adopt higher standards of care. Daniella Balasal and Nadia De Santi discuss the concept of age-friendly communities, describing how municipalities are developing strategies and plans to meet the needs of their aging populations outside institutional settings. They cite Ontario’s age-friendly community planning guide as an overarching framework for municipalities to develop local strategies and plans. Shirley Hoy advocates for a foundational restructuring of the long-term care sector. Hoy calls for deep integration of provincial health services, such as doctors and hospitals, with the broader elder care system. Given their role in providing both long-term care and social services, municipalities have a critical part to play in coordinating primary care, long-term care, and community-based supports. Hoy adds that the 2023 health care funding deal between the federal government and the provinces could act as the impetus to strengthen long-term care at the local level.
Using Green Investment Banks to Finance Low-Carbon Pathways
(Institute on Municipal Finance and Governance, 2023-08) Stewart, Robert
Increased financing for low-carbon investments is critical to enable Canadian cities to reduce emissions. However, there is a gap between the financial capital available for low-carbon investments and the amount needed. Public financing is insufficient, and the availability of private financing is limited by the real or perceived risks associated with low-carbon projects, such as the viability of nascent technologies and the possibility of regulatory changes. These risks are compounded by the high levels of upfront capital required by some projects. Green Investment Banks (GIBs) can bridge the financing gap to ensure adequate financial capital is available for low-carbon investments. By offering long-term financing instruments and innovative financing mechanisms, GIBs drive private capital to low-carbon projects. Moreover, GIBs at the municipal level could invest in low-carbon projects that respond to the specific needs of cities. In a new paper for the Institute on Municipal Finance and Governance (IMFG), Richard M. Bird Post-Doctoral Fellow Robert Stewart presents GIBs as a tool that can address the low-carbon financing gap and support green economic activity. After reviewing four international examples of successful GIBs (Australia’s Clean Energy Finance Corporation, the UK Green Investment Bank, the Connecticut Green Bank, and the New York Green Bank), he argues that municipal GIBs could help Canadian cities lower their emissions. Taking inspiration from the GIB model, he proposes that institutions such as The Toronto’s Atmospheric Fund and other members of the Low-Carbon Cities Canada (LC3) Network build coalitions with financial institutions to identify the barriers that impede low-carbon investments and devise financial arrangements to overcome these barriers. set up GIBs in Canadian cities.
Strong(er) Mayors in Ontario – What Difference Will They Make?
(Institute on Municipal Finance and Governance, 2023-05-15) Taylor, Zack; Chapple, Karen; Elliott, Matt; Smith, Alison; Eidelman, Gabriel
On October 19, 2022, IMFG convened a public panel discussion titled “Strong(er) Mayors – What Difference Will They Make?” The speakers were Karen Chapple, director of the School of Cities at the University of Toronto; City Hall journalist Matt Elliott; Alison Smith, assistant professor of political science at the University of Toronto; and Gabriel Eidelman, assistant professor, teaching stream, at the Munk School of Global Affairs and Public Policy at the University of Toronto. The panel was moderated by Zack Taylor, associate professor of political science at Western University. The discussion and follow-up questions by the audience brought to the surface a variety of perspectives, both for and against the “strong mayor” provisions of the Strong Mayors, Building Homes Act passed by the Ontario legislature on September 8, 2022. This commentary contextualizes and summarizes the speakers’ remarks. It also takes account of the additional provisions in the Better Municipal Governance Act passed on December 8, 2022, and the February 17, 2023, resignation of Mayor John Tory. The invited speakers provided insights on specific aspects of the law and their implications. Karen Chapple discussed the inspiration for the reform, American “strong mayor” cities. Matt Elliot probed how the relationship between the mayor and councillors might change. Alison Smith talked about the provincial-municipal intergovernmental relationship and the politics of housing policy. Finally, Gabriel Eidelman examines the implications of the change for the relationship between elected officials and professional administrative staff. Zack Taylor provides context for the discussion and, in his conclusion, addresses questions such as the risk of politicizing the public service, the implications for small and regional municipalities, and the role of the province.
The Municipal Role in Transportation
(Institute on Municipal Finance and Governance, 2023-04-27) Tremblay-Racicot, Fanny; Wood, Patricia; Kim, Carolyn; Bhardwaj, Chandan; Thorn, Adam; Assunçao-Denis, Marie-Ève; Pinder, Matt; Eidelman, Gabriel; Forman, Kass; Neufeld, Spencer; Riaz, Kinza
Investments in transportation are among the most visible investments made across all orders of government in Canada, with each order of government illustrating different forms of involvement in the country’s transportation networks. The federal and provincial governments oversee long-distance transportation, while municipalities are responsible for public transit, active transportation, and local highways and roads. By changing policies and priorities across all orders of government, cities could make transportation networks more effective while reducing emissions. The four papers in this report focus on the role that Canadian municipalities currently play in transportation and how other orders of government can support that role. The papers also propose policies to strengthen the municipal role in transportation while alleviating congestion, moving goods more efficiently, and promoting active transportation and sustainability. Municipalities Fanny Tremblay-Racicot examines the links between transportation, urban planning, and land use and asserts that municipalities have the power to prioritize complete streets interventions and active transportation investments, particularly in vulnerable neighbourhoods, as well as to democratize land-use planning. Patricia Burke Wood argues that Canadian cities need collaborative and regional transportation governance for strong, multimodal networks to provide better service to transit riders. She recommends that municipalities play a leading role in these governance structures and in efforts to coordinate travel across local networks. Carolyn Kim, Chandan Bhardwaj, and Adam Thorn discuss the unique policy levers that municipalities can use to make urban freight transportation more sustainable by encouraging low-emissions deliveries and optimizing freight routing. Marie-Ève Assunçao-Denis and Matt Pinder stress that municipal governments should continue to designate mixed-use areas, especially near public transit, and complement such land-use changes with upgrades to active transportation infrastructure to create more walkable environments. Provincial governments Tremblay-Racicot notes that provinces need to implement stronger growth-management policies and legislation regarding transportation and urban planning, so that local governments have more incentive to make changes. Wood finds that the working relationships between municipalities and provincial governments on urban transit governance are often weak, unclear, unstable, and antagonistic. She recommends more collaboration, drawing on international models. Kim, Bhardwaj, and Thorn advocate for provinces to enhance financial support and autonomy for municipalities. This support could include funding for low-emissions freight transportation technologies and granting the power to implement policies required to support more efficient goods movement. Assunçao-Denis and Pinder call for provinces to increase the funding available to municipalities for active transportation infrastructure and initiatives, highlighting existing programs in British Columbia and Québec. Federal government Wood argues that Canada’s transportation governance structures and practices are uneven and often unaccountable. The federal government’s current role is characterized by ambiguity and inconsistency, which could be improved by mutually agreed-upon expectations across orders of government. Kim, Bhardwaj, and Thorn highlight federal programs that have supported municipalities in adopting more sustainable practices, such as fleet electrification and the accompanying need for more public electric-vehicle charging stations. Assunçao-Denis and Pinder emphasize the crucial role of federal funding in the development and improvement of active transportation infrastructure and programs, including research and feasibility studies, community engagement initiatives, and cycling and walking infrastructure projects. Intergovernmental cooperation The need for increased intergovernmental cooperation among orders of government is an underlying assumption of all the contributors, particularly with respect to stronger legislation and funding assistance. Assunçao-Denis and Pinder call for more horizontal coordination across local governments such as boroughs and municipalities to support active transportation. Kim, Bhardwaj, and Thorn suggest that sustainable freight traffic would benefit from improved coordination of goals and policies among all orders of government.
How Can Municipalities in British Columbia and Quebec Contribute to Flood Risk Reduction?
(Institute on Municipal Finance and Governance, 2023-02-02) Deschamps, Bernard; Bourdeau-Brien, Michael; Boudreault, Mathieu
Flood-related losses are on the rise in Canada and private insurance remains costly or unavailable in high-risk areas. Despite the introduction of overland flood insurance in 2015, following the federal government’s invitation to the insurance industry to participate in flood risk-sharing, federal and provincial disaster financial assistance programs still cover a large portion of these costs. As the risks increase, governments are questioning the sustainability of using taxpayers’ money to finance such losses, leaving municipalities with significant residual risk. The growing number of people and assets occupying flood-prone areas, including public infrastructure, has contributed to the sharp increase in flood damage costs. Based on a literature review and discussions with experts, this paper describes the municipal role in flood-risk management, and shows how provincial and federal financial assistance to municipalities for flood damage in British Columbia and Québec may be counterproductive in fostering flood-risk management at the municipal level. We conclude that municipalities can play a more proactive role in incorporating risk reduction as the key objective of disaster financial assistance and propose three specific policy instruments to help reduce the growing number of people living in flood zones: flood mapping, land-use planning, and the relocation of high-risk properties.
Measuring the Fiscal Health of U.S. Cities
(Institute on Municipal Finance and Governance, 2023-01-05) Chernick, Howard; Reschovsky, Andrew
This paper analyzes the fiscal health of 148 U.S. central cities using a specially constructed Fiscally Standardized Cities (FiSC) database that accounts for the revenues and spending of all the governments that provide public services in cities – municipal governments, school districts, counties, and special districts. These data permit comparisons of city finance between cities with widely different governance structures. The fiscal health of a city is defined as the relationship between its expenditure needs and its revenue-raising capacity. The expenditure needs calculations are obtained from regressions of six separate categories of spending. The analysis makes it possible to identify variables that are likely to affect the cost of providing different types of local public services. Tax capacity is measured by applying average tax rates to the major tax bases used by each FiSC in the database. User-charge capacity is based on residents’ ability to pay. Own-source fiscal capacity is supplemented by grants from the federal and state governments. The empirical analysis is based on a panel dataset for 2000 through 2014. The results indicate that that a substantial number of U.S. cities are in weak fiscal health because their revenue-raising capacity, including intergovernmental transfers, falls short of their expenditure needs. Fiscal disparities, measured as the variation in these fiscal gaps, were large in both 2000 and 2014 and increased over that period. On average, own-source revenue-raising capacity grew much faster than intergovernmental transfers. The largest single contributor to the increase in fiscal disparities was the uneven growth in own-source revenue-raising capacity across cities. Targeted increases in federal and state grants could help improve the fiscal health of U.S. central cities and reduce fiscal disparities.
The Municipal Role in Policing
(Institute on Municipal Finance and Governance, 2022-12-01) Mukherjee, Alok; Kwon, Jihyun; Laming, Erick; Eidelman, Gabriel; Hinds, Chloe; Forman, Kass
When compared with other public services provided at the municipal level, policing stands out not only in terms of its cost, but also for the controversy associated with it. At the same time, recent blockades and protests have brought the role of municipal police services to the fore. The governance of police services is complex, intertwined with questions of justice, equity, and inclusion. The relationship between police services, police boards, and other systems of accountability and oversight are central to the discussion. The essays in this Who Does What report not only describe the current challenges in delivering police services across three orders of government, but also set out approaches to address these challenges. Municipalities Alok Mukherjee and Jihyun Kwon frame their discussion against the backdrop of the significant cost borne by the City of Ottawa to respond to the convoy protests in early 2022. While the protests themselves were directed at the federal government, responsibility for policing fell largely to the municipality. The authors argue that municipalities face a mismatch between the police work necessitated by federal areas of responsibility and the reality that the funding comes from local ratepayers. Erick Laming explores the important role of municipalities in determining how police services boards (PSBs) function, but calls for a de-politicization of their relationship to municipal government. He suggests that local elected officials have their direct participation on boards reduced in favour of a “pure civilian model.” In this arrangement, the role of municipal governments would largely be selecting the best candidates to serve on the PSB. Provincial governments Mukherjee and Kwon examine provincial legislation governing police services in Ontario and explore the statutory ambiguity surrounding municipalities’ role in policing areas of federal jurisdiction. They call for the province to provide greater clarity in statute on the municipal responsibility for interjurisdictional policing. Laming describes the inconsistencies in the provincial role with respect to PSBs across the country. To bring about greater clarity, Laming proposes arm’s-length police governance monitors at the provincial level to oversee PSBs. Federal government Mukherjee and Kwan argue that the federal government effectively downloads certain tasks to municipal police forces, such as intelligence and national security, emergency planning, coast guard responsibilities, and consulate protection. In view of this downloading, the authors suggest considering federal funding for municipal police services. Intergovernmental cooperation Mukherjee and Kwon question whether all functions currently performed by police should be assigned to local government. They raise the possibility of separating functions by level of government, with municipal governments focusing on community safety and well-being. Further examination would be required to determine which level of government is best suited to carry out the functions requiring armed and uniformed personnel. Building on the concept of provincial police governance monitors, Laming proposes an interprovincial working group to facilitate collaboration in standardizing police governance.
The Old and the New: A Tale of Two Local Property Taxes in Ireland
(Institute on Municipal Finance and Governance, 2022-11-24) Turley, Gerard
Property taxes are common in countries around the world. While Ireland is no exception in its current tax treatment of real property, the background to its local taxes on non-residential and residential properties is unusual in that the former dates back more than 400 years while the latter, at least in its current configuration, has been in existence for less than 10 years. This research paper outlines the rationale, history, features, and administration of commercial rates (the “old”) and the residential Local Property Tax (the “new”). The purpose is to highlight, from a political economy and public policy perspective, improvements in the design and implementation of both taxes. While both taxes have some common features, the Local Property Tax has a number of unusual characteristics, including self assessment and valuation bands. While recognizing country-specific circumstances, the paper draws potential lessons from the Irish experience, identifies future opportunities, and explores challenges for policymakers. The Local Property Tax experience shows the importance of tax administration and the role of the central tax collection agency, and, in terms of design, the principle of simplicity combined with a tailored approach to suit local circumstances. Challenges include the relative tax burdens on non-residential and residential properties, the long-term sustainability of both tax regimes arising from legacy issues, the effects of current global trends and future revaluations, and, finally, the need for frequent property tax reform because of political and taxpayers’ opposition to a highly visible, unpopular, but good local tax.
The Municipal Role in Public Health
(Institute on Municipal Finance and Governance, 2022-11-17) Eidelman, Gabriel; Hachard, Tomas; Cabaj, Jason; Fierlbeck, Katherine; Loh, Lawrence; McLaren, Lindsay; Watson-Creed, Gaynor; Rosalle, Ruth
Public health is a rich and broad concept. It includes the direct provision of programs and services, but also encompasses expansive notions of a healthy society. In this sense, a wide range of government functions intersect with public health. In fact, 90 percent of municipal operational expenditures in Ontario contribute directly or indirectly to the social determinants of health. The formal public health system cuts across federal, provincial, regional, and municipal jurisdictions. The COVID-19 pandemic serves as a case in point: the federal government was responsible for certain quarantine requirements and the Public Health Agency of Canada, which served as the face of the national response; provincial governments set in place province-wide mandates; and local governments played a key role in implementing, or even going beyond, the measures required by higher levels of government. As public health is both a complex concept and a shared responsibility, coordination and cooperation between levels of government take on special importance. Municipalities Katherine Fierlbeck and Gaynor Watson-Creed set out the broad scope of municipal engagement in public health, noting that the urban context can have a direct impact on the health of individuals. They stress the important role of municipalities in tailoring public health interventions to the local context. Similarly, Lawrence Loh highlights how municipalities sometimes act as first movers, setting precedents later adopted at the provincial level, and sometimes play the opposite role, adjusting provincial policies to fit the local context. He cites the examples of the Smoke-Free Ontario Act, which the province introduced only after many cities had already banned smoking in public spaces, and the COVID-19 pandemic response, where municipalities adapted provincial decisions to fit local needs. Lindsay McLaren and Jason Cabaj put forward a vision of public health in which municipal governments have a more clearly defined role, and which, in turn, supports a broader well-being agenda as a path to population health and health equity. Provincial governments Fierlbeck and Watson-Creed note that while the role of the formal public health system is enshrined in provincial legislation, some provincially led reorganizations have undermined the system’s effectiveness. Provinces must collaborate and share data with municipalities to achieve better outcomes. Loh recognizes the provincial government’s role in putting in place overall frameworks which local authorities can adapt, or exceed, as necessary. In this context, Loh emphasizes the need for the provinces to adequately and equitably resource local public health units. McLaren and Cabaj call for legislative changes at the provincial level to facilitate coordination with municipalities. However, they also point out that a well-being approach to public health applies to provincial governments as well as municipal governments, since it hinges on a broader, coherent societal vision of health rather than the actions of a single level of government. Federal government Fierlbeck and Watson-Creed argue that failure to coordinate across levels of government, including at the federal level, characterized the handling of the SARS outbreak in 2003. But improved coordination does not necessarily mean centralization: information and data-sharing at the national level should strengthen local governance of public health. McLaren and Cabaj also emphasize the federal government’s role in coordination, as well as in funding and establishing accountability mechanisms. To this end, they explore the possibility of a national Public Health Act. Such legislation would enhance public understanding that formal public health involves all levels of government. Intergovernmental cooperation Cooperation between levels of government underpins the recommendations in all three papers. For example, Fierlbeck and Watson-Creed describe how a national framework for health data collection could bolster public health surveillance. Loh concludes that Ontario’s balance between local and provincial policy-making can lead to complicated dialogue but achieve good results. McLaren and Cabaj frame intergovernmental cooperation in two contexts: first, as the cornerstone of incremental efforts to strengthen the formal public health system, and second, as a means to implement a bolder well-being agenda, which will require action on the part of all levels of government.
Housing and Infrastructure Provision for Informal Settlements: Comparing Accra and Buenos Aires
(Institute on Municipal Finance and Governance, 2022-11-04) Wang, Hsi_Chuan
Informal settlement growth across countries has led to distinctive actions that can enhance access for low-income populations to housing and basic services. This fact indicates the need to develop studies comparing countries and cities to identify policy learning opportunities. This paper is an experimental comparison between Accra, Ghana, and Buenos Aires, Argentina, investigating how policies on informal settlements have formed in the two countries. The two cities differ in the way that informal settlements are viewed by the public. In Argentina, the public often sees informal settlements (known as villas) as areas to be avoided, despite proactive policies to support and integrate low-income groups. In Accra, informal settlements may be viewed negatively or positively, depending on the characteristics and origin of their residents; some settlements are viewed as legitimate, ordinary communities that serve as transitional places despite their underdeveloped environment. Nevertheless, Buenos Aires, Argentina, demonstrates more inclusive policies for informal dwellers than Accra, Ghana. Argentina has chosen not to follow the market model, while Ghana maintains a neoliberal path. This difference is partly the result of a severe economic depression in Argentina in the early 21st century, coupled with institutional arrangements that give the city of Buenos Aires greater autonomy and leverage at the national level than Accra. In sum, Argentina could learn from Ghana about the way in which cultural barriers affect progress, while Ghana could learn from Argentina about removing structural and institutional barriers to improving the lives of those who live in informal settlements.
Unbalanced Investments: The Impact of Municipal Finance and Governance on Accra’s Informal Settlements
(Institute on Municipal Finance and Governance, 2022-11-04) Wang, Hsi_Chuan
Planning for informal settlements is a challenge in many countries. Informal settlements usually suffer from a lack of basic local services and infrastructure. This paper examines government expenditures in Accra, Ghana, to analyze the extent to which the Accra Metropolitan Assembly (AMA) invests in informal settlements. I engage with this topic from three perspectives. First, I review Accra’s urbanization and address how its historical legacies, such as Accra’s first town plan in 1958, have influenced current settlements. I find that little progress has been made because many “focal points” (that is, slums) identified in the 1958 plan remain as locations of present informal settlements. Second, from a fiscal standpoint, I analyze AMA’s budgetary trends from 2013 to 2017 to highlight this local government’s overreliance on the national government for infrastructure investments. Few infrastructure projects in AMA were supported by local government alone and many development projects would not be possible without external funds. Third, I engage with AMA’s unbalanced investments from a governance perspective, in part by exploring the distribution of drainage projects across the city. I notice that the funding for the drainage projects in AMA has not been deployed in the submetros with the most need. This finding also highlights that Ghanaian decentralization policy has not resulted in effective and just urban development, such as balancing citywide drainage development within local jurisdictions. Upon relating these dynamics with Ghana’s decentralization progress, I argue that: (1) Ghana’s arbitrary decision on decentralization does not help alleviate local pressure on informal settlement planning, and that (2) AMA as a local government has overlooked the urgency of balancing local development. I suggest local governments address these issues by enhancing their capacity for just governance and strengthening coalitions with other local governments.
A New Agenda for Local Democracy: Building Just, Inclusive, and Participatory Cities
(Institute on Municipal Finance and Governance, 2022-10) Andrew-Amofah, Brittany; Flynn, Alexandra; Wood, Patricia
There is a crisis of growing inequality in Canadian cities. As COVID-19 spread through Canadian cities beginning in spring 2020, racial inequities became apparent, including biased enforcement of bylaws and higher coronavirus rates amongst racialized and vulnerable communities. These health care injustices exposed municipal decisions that have led to negative outcomes for marginalized groups, especially in policing, community safety, housing, homelessness, and bylaw enforcement. In response, cities have been called upon – again – to change their governance models to allow for greater participation and better include the voices and lived realities of racialized and marginalized people in decision-making processes. In a post-pandemic period of city building, where socio-economic and racial inequalities have been exposed, municipalities must incorporate social equity and explicit race-based lenses in their decision-making and reimagine their governance practices. This paper sets out the ways in which municipal governance frameworks have worked to exacerbate inequality, with suggestions on how cities can design more democratic and responsible models. These include greater engagement with equity-deserving communities and community bodies, modifications to existing governance models, and legislative changes.

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