In T.O. speech, Calgary mayor joins chorus of cities asking for sales tax cash: first Miller, then Stintz and now Nenshi

In T.O. speech, Calgary mayor joins chorus of cities asking for sales tax cash: first Miller, then Stintz and now Nenshi

Calgary mayor Naheed Nenshi (Image: 5of7) 

Canada’s municipalities, desperate to raise new money and move off their reliance on property taxes, have long wanted a crack at levying sales taxes. David Miller famously had his “One Cent Now” campaign, which proposed that cities get one percent of the GST. Miller’s plan went nowhere, but the idea of sharing some of the GST (or, 2011 terms, the federal share of the HST) with cities is appealing enough that it never really dies: yesterday Calgary mayor Naheed Nenshi carried the torch another mile in a speech at the Toronto CivicAction Summit.

According to the Calgary Herald:

Revealing a potential plank of the “muscular urban agenda” he’s touted here — and floating an idea a group of Calgarians has been quietly organizing for almost a year — Nenshi said he expects the “penny tax” proposal will be controversial, but he wanted to open the discussion.

“You would give individual municipalities the ability to raise the GST in their own municipalities back to six, and you get that one per cent and use it for social infrastructure,” he said in an interview at the Greater Toronto CivicAction Summit.

“Should that one per cent of the GST be vacated, not all cities would choose to take it,” Nenshi said. “To have the option there: let us take the political blame or the political credit.”

Nenshi and Miller’s support of this idea might make it sound as though left-wing politicians are the only ones behind it. Not true: fiscal conservative Karen Stintz argued back in 2008 that, after the feds cut the GST to five per cent, the province ought to have raised the PST by one per cent and handed that extra cash over to cities. It’s the same principle, only with the twist that it wouldn’t have the feds interfering in cities, which are a provincial responsibility.

Nenshi’s particular proposal—putting the onus on cities to opt in to the tax, and not just asking for a straight transfer from the feds—has more than a little merit: a one per cent increase in the GST would have Canadians paying the same in sales tax as they did between July 2006 and January 2008. Not exactly the end of the world.

Of course, that doesn’t make this idea any more likely to happen. For federal politicians it’s lose-lose: they could be attacked for raising taxes without getting any of the money. Provincial governments would raise a stink for decisions made over their heads, and the current federal government isn’t actually interested in more sales taxes for anyone. In other words, without a change in Ottawa, it’s just not happening.

• Mayor Nenshi backs push for ‘penny tax’ to build new libraries, recreation centres [Calgary Herald]