Ottawa
needs to straighten out its tax and spending approach if Canada
is to have healthy, wealthy cities
(Winnipeg Free Press)
Our
cities are needlessly suffering environmental decline that has a
direct bearing on quality of life and wealth creation – in
good part because of Ottawa’s unfocussed approach to taxing
and spending. That’s the message of a report being released
today in Winnipeg at the annual conference of the Federation of
Canadian Municipalities.
Ottawa’s
influence on our cities’ development is largely unintentional
and often runs counter to sustainability objectives. The result
is misdirected government resources and programs that often under-perform.
That’s
a sad state of affairs, but one we can turn around. The federal
government could demonstrate leadership and make a tremendous positive
contribution to the health and wealth of our cities simply by coordinating
its tax and spending policies using an environmental focus.
In
many cases, we’re not talking about taking in less revenue
or spending more money – we’re talking about moving
tax burdens from green economic activities to unsustainable activities,
with investment shifted in the opposite direction.
Why
is environmental quality particularly important to Winnipeg and
Canada’s other major urban areas?
Because
more and more Canadians are living in cities. Because environmental
quality is an element in overall quality of life. And because urban
environmental quality plays an important role in attracting and
retaining the talent that drives wealth creation.
But
most key indicators suggest negative trends in Canada’s urban
environment. Population densities are declining from more than 1,000
people per square kilometre in 1971, to 800/km2 in 1996 as urban
sprawl continues to chew up farmland. Car use is up and transit
use down. Smog levels are increasing.
Sprawl-generated
rising levels of traffic congestion are raising costs to business,
reducing productivity, and impeding trade.
Planning has thus far failed to tame urban sprawl and move people
from cars to transit. One important yet commonly overlooked cause
of this failure is the inadvertent undermining of urban planning
by upper tier government fiscal policies that pave roads to greenfield
development sites, for example, while failing to adequately support
existing built-up areas.
That
needs to change, the National Round Table on the Environment and
the Economy says in its new report entitled Environmental Quality
in Canadian Cities: The Federal Role.
On
the spending side, for example, the Round Table recommends that
Federal infrastructure funding should be granted only for projects
where the municipality can identify and quantify expected improvements
to environmental quality, such as better air or water quality.
Similarly,
Ottawa should make a substantial, long-term investment in public
transit – but funding should go only to municipalities that
adopt policies that encourage land use patterns that support transit
use. Funded cities should be required to charge less for transit-accessible
development when setting property taxes, user fees and development
charges.
Transit
is a crowbar our cities can use to spring themselves from the urban
sprawl trap. As my colleague Michael Harcourt, Chair of the Round
Table’s Urban Sustainability Task Force, and today in Winnipeg
making his first major public appearance since his accident last
fall, says: “Shifting from automobile travel to transit will
likely have the single greatest impact on the environmental quality
of Canadian cities.”
On
the taxation side, the Government of Canada should use the GST to
promote more sustainable cities. A 100% GST rebate should be granted
for green infrastructure projects such as public transit, water
and sewage treatment plants, renewable energy generation and community
energy systems, for example.
As
well, Canadians should be encouraged to make energy efficiency renovations
on their homes with a partial (36%) GST rebate on the materials
and labour. Individuals should be encouraged to buy new energy efficient
R-2000 homes by increasing the partial (36%) GST rebate on new all
homes to 50% for purchasers of R-2000 houses. Alternately, the existing
36% rebate could be gradually redirected solely to R-2000 new home
buyers.
The
Federal Government should further contribute to healthier, wealthier
cities by putting it’s own house in order.
Ottawa
should take a more aggressive approach – with numerical targets
– to increasing its fleet of alternate fuel and low emission
vehicles. Government properties should not be sold or leased to
parties that would develop them in ways that contribute to sprawl.
And when seeking new federal facilities, locations should be selected
that are in built-up areas that are transit accessible and contribute
to the sustainability of cities – not encourage car use and
sprawl.
Urban
environmental decline and sprawl are being driven by market distortions
that are inadvertently created by government fiscal policies. Market
forces are being altered by a complex web of direct and indirect
subsidies and cross-subsidies stemming from local provincial and
federal fiscal policies, the Round Table found.
Government
fiscal policies have inadvertently encouraged many of the difficulties
that are encumbering our cities’ progress. Now it is time
to grab these fiscal tools by their handles instead of their blades
– and put them to work building a sustainable urban future.
David
J. McGuinty is President and CEO of the National Round Table on
the Environment and the Economy.
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