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Tax time in Whistler



It's probably not a coincidence that the Federation of Canadian Municipalities (FCM) holds its annual meeting a week after most homeowners receive their tax notices. The meeting gives municipal politicians a chance to get out of town and escape the wrath of voters seething over tax increases - and this year they are all convening and commiserating in Whistler.

The good news is 2,000 delegates - the largest conference Whistler has ever held - will be in town next week, spending money during a slow period. That may be tempered by the collective whine of 2,000 local politicians complaining to one another about municipalities being at the bottom of the Canadian political food chain and beholden to the whims of provincial and federal governments.

The FCM conference is the one time of the year when some people pay attention to that whining. Liberal leader Michael Ignatieff and NDP leader Jack Layton are expected to be in town to lend a sympathetic ear to local politicians, and to promise that things would be different if they were leading the country. Prime Minister Stephen Harper has bigger fish to fry and is expected to send a cabinet minister or two to reinforce the Conservatives' message that money is tight, times are tough and the federal government really can't afford to do much more than it is already doing.

There will be resolutions passed at the conference, promises made, lobbying efforts redoubled, but any substantive change in municipal governments' relationship to provincial and federal governments is a long way down the road.

In British Columbia, for instance, Gordon Campbell's Liberal Party promised major change when it came to power in 2001. Many of the party's MLAs, including Campbell, were former municipal politicians and they knew first hand the frustrations of senior governments downloading costs on to municipalities. They had lived with the frustration of a system that sees provincial and federal governments collect more tax revenue than they need, and then announce grant programs to disperse some of that revenue to municipalities. The random nature of such always-over-subscribed grant programs is a bit like feeding time at the zoo, and makes it difficult for municipalities to plan for the long term.

So the B.C. Liberals planned to introduce the Community Charter, legislation that would empower municipalities by giving them the right to impose one additional tax. Communities dependent on the forest industry, for example, might collect tax revenue from that industry. Towns where tourism was dominant would be able to tax that industry.

And then the various industries and business community recognized what was proposed and started lobbying against the idea. The final result was a watered down Community Charter that did not change the basic relationship of municipalities to the provincial government, nor substantively increase municipalities' authority in any way related to taxation.

So there is no quick fix for municipalities. They have only the authority to tax property and impose fees for various services. They have to plan for the long term to avoid falling into financial black holes and must be quick on their feet to adjust to changes imposed from governments above.

This week Whistler taxpayers saw what that failure to plan really means: an average 8 per cent tax increase, on top of last year's 5.5 per cent increase, after several years where taxes only increased at the rate of inflation. Next year, taxes are expected to increase by another 7 per cent, and in 2011 by another 5 per cent. Most fees and parcel taxes are also up again this year, to catch up to where they should be, we are told.

But the newsletter included with Whistler's tax notices also shows how senior governments can muddy municipal waters. Whistler is facing a $1.4 million increase in transit costs this year, largely due to a new transit facility. The facility is rumoured to cost $24 million, of which Whistler must pay 57 per cent. However, Whistler won't own the facility; B.C. Transit will.

The facility will be the home of the hydrogen fuel cell buses the federal and provincial governments are anxious to show off during next winter's Olympics. Those buses, and the new buses that replaced Whistler's dilapidated fleet last fall, are largely paid for by senior governments. But one of the costs - to Whistler taxpayers - they came with is the transit facility.

So the complaints that come from next week's FCM conference are not without some justification. Federal and provincial governments spend more time thinking about how to stay in power than how to assist municipalities. But municipal politicians should have known that when they got into the game. They exist in the space between property owners upset at tax increases and senior governments that seemingly have bigger issues to deal with.

The situation will only change substantively if municipalities can collectively find a way to connect property tax increases to senior governments.