Uncomfortable financial advice

The city organized a “Hamilton Summit” this month to push the province for more money for our failing infrastructure but the message from some of the invited experts was not quite what some councillors and taxpayers wanted to hear. Instead of echoing the plea for provincial dollars, Harry Kitchen and Aaron Moore cast a critical eye on what Hamilton should be doing for itself.

That included calling for tolling roads, expanding user fees and raising property taxes, especially on single family homes. It also challenged council’s fixation on growing the non-residential part of the city’s tax base.

Kitchen was introduced as “the rock star” on municipal finance and governance. He has written more than one hundred reports, studies and books on the subject and is currently “the visiting scholar at the prestigious Institute of Municipal Finance and Governance of the Munk School of Global Affairs at the University of Toronto.”

Born in Lynden where his father was the reeve, Kitchen began his remarks by tearing into the city’s summit document which he noted repeatedly says “we need dollars from the province” but without explaining why.

“Until you can say why you need it if I were sitting at the province I’d say go back and do your homework,” he declared. “Are there other ways you should finance services?”

Kitchen has some specific suggestions such as “those who drive on roads should pay as they drive”. He recounted being “lambasted” on phone-in shows when he argued for that in 2006 but receiving a much different reaction more recently.

“The attitudes are starting to change,” he observed. “I’m not so sure they’re changing quite so quickly among councillors, but they are changing among a lot of citizens, particularly the younger population.”

Staff suggestions to toll the Linc and Red Hill expressways were offered more than a decade ago, but turned down by councillors who have shown no interest in revisiting this potential financial source. Tolling those or other roads would require provincial permission but the Wynne government seems to be moving in that direction for parts of provincial highways.

Aaron Moore, also part of the Institute of Municipal Finance and Governance at the Munk School of Global Affairs, also supported “taxes on driving” to help reduce congestion on roads in the GTHA and encourage more transit use.

“All we’re doing is investing in transit,” he noted. “The problem is we know from experience elsewhere that to actually get people to use transit you have to make it harder to drive.”

Both men advocated more use of property taxes. Moore contended that “the property tax is good and it’s not a horrible thing to raise it to keep up with inflation year to year.” Kitchen argued that it is “the most accountable tax we have in Canada” and the ideal way to properly fund essential local services.

“If you don’t have a good public sector, a good set of public services including social services, you haven’t got a country that’s really that much fun to live in,” he declared. “So I think we’ve got to get this notion of cut taxes, cut taxes, cut taxes – get it out, stop it! We’ve got to spend money and make sure the public sector is treated with respect and also that they provide the services.”

Kitchen took particular aim at Hamilton’s residential tax rates, criticizing as unfair the much higher rates on apartments and the commercial-industrial sectors and characterizing the single family rate as too low.

“We’re overtaxing the multi-residential sector vis-à-vis the residential sector based on benefits received,” he said. “The reality is that the tax on the residential sector is one hell of a deal. The tax on the other sectors not so much.”

Throughout the post-amalgamation period, council has consistently tried to avoid raising single family rates while bending every effort to attract more industrial businesses so that sector would cover more of the tax burden.

Buying and selling pipelines

How they voted in February