Resources are limited. They always are. It's one of the truisms of local government, and probably any order of government that there is always more work to do than there are resources available to do it. While those resources may include people, time, and political capital, it often comes down to dollars. To get everything done, more money is needed. Not only that, but reliance on volatile sources of revenue makes planning very difficult for municipal councils and the experts they've hired.
For the most part, local government in the southern part of Canada primarily relies on three sources of revenue: property tax, fees and charges, and transfers from other orders of government. Perhaps the most volatile of the three sources are those transfers that often come in grants or payments in lieu of taxes. They are volatile because local government really has no say and no standing in how the federal or provincial/territorial governments spend their own limited resources.
Some grants are based on political desires from other orders of governments—things like the federal gas tax, for instance. So receiving a share of what was collected is dependent on meeting certain conditions that the federal government wanted to happen.
A significant problem arises when there is a disconnect between the local council and the granting order of government. Prudent councils have a strategic plan and are moving their community towards that ideal future state a generation from now. That involves making choices – sometimes difficult ones – about what sort of actions to take and which ones to leave by the wayside. What happens when some of those choices mean that transfers from other orders of government are in jeopardy?
Politics can raise its head here too. I have worked with council members who have expressed caution of moving in a particular direction because of fear that the province (for example) might smite them for doing so. Speaking out about the actions or impact of another order of government, particularly when there are dollars involved, comes with risk, especially if the provincial government is seen as thin-skinned or desirous of positive words being spoken about them.
In both these situations, either leaving dollars on the table or in risking funding by speaking out against other orders of government, there is a risk. Political capital can get used up, or funding agreements may not be renewed. To me, there are principles at play here too. Is the local government representing citizens to the province or federal government, or has council chosen to represent those other orders of government to the people in the community?
Representative democracy starts to run backwards, and accountability is significantly reduced. As a result, we begin to see a short-term gain for long-term pain begin to emerge.
Council has another difficult decision to make when these circumstances arise, and only they can decide which way to go. Decisions like this are why there are councils in the first place. Robust debate on the principles and values at play and a focus on the municipal vision can help make the real people on council make the best choices for the long-term benefit of their community.
What do you think? Is this really an issue, or do most councils just keep quiet and do what other orders of government ask them to do in return for funding?
Please let me know what you think. You can find me at ian@strategicsteps.ca.