Where’d that Star headline go?
Sorry for going AWOL on the blog. Long story. Anyway, the front-page headline in this morning’s Star—“PM to cities: Drop dead”—is one for the ages. Kinda makes you feel like you’re living in a parallel universe in which no one is passive aggressive, no one minces words and The Onion is the newspaper of record. But you’ll have to buy the print edition: by 11 a.m. the snarky headline had been erased from the on-line edition. Whatever words it chooses, the Star can crow all it wants: Stephen Harper will never collect a cent of sales tax and then hand it over to municipal governments because it’s bad policy. One Ottawa scribe I spoke to called it “appalling federalism.” Cities may yet succeed in wringing money from Ottawa, but it will not come—it was never going to come—in the form of a GST transfer.
What’s at issue is how to keep the cost of cities transparent to city taxpayers. Ottawa’s view is that, if (for instance) Toronto wants a one per cent share of sales taxes, it should levy its own one per cent sales tax. That way, if Toronto finds itself short of cash in the future, it can raise its sales tax to two per cent if it wants—and city hall, not parliament, can suffer the wrath of its taxpayers. Besides, Harper is notoriously averse to cutting special deals (like the Newfoundland and Nova Scotia agreements on offshore oil revenues) or treading into areas of provincial responsibility (like municipal affairs).
Curiously, Mississauga Mayor Hazel (“Hurricane”) McCallion seems to understand this better than most. McCallion went out of her way to pick a fight with Harper and Finance Minister Jim Flaherty this week, but she never said a word about sales taxes. If you read between the lines, what she seems to want is money for roads, bridges or buses, or to help fund the transit system. In other words: she wants money for stuff, rather than just pure money. This is a much easier request for Ottawa to comply with. For one thing, it avoids any constitutional or jurisdictional issues. For another, when Ottawa helps build a bridge or buy a fleet of buses, it gets to take some political credit. Ribbon-cuttings matter, and if all Ottawa does is wire money from one account to another, where’s the photo op?
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