Canadian municipalities are expected to do too much with too few financial resources and this has created a survival crisis felt most severely in small rural communities, says a report by the Federation of Canadian Municipalities.
The report, trying to cash in on the battle over appropriate taxation power between federal and provincial governments, said there also is a “municipal fiscal imbalance” that limits services and infrastructure that communities are able to offer residents.
In rural Canada, it is made worse by a static or declining property tax base, little or no industrial tax base and declining populations because of lack of services such as reliable internet access and good roads.
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“Many of these communities get into a form of vicious circle,” said University of Guelph rural planning and development professor David Douglas.
“The more people or businesses or services leave, the harder it is to attract new people and investment to the community.”
Douglas was part of the group that prepared the rural section of the municipal study. While all communities have service and infrastructure requirements that exceed their financial capacity, the situation is more dire in small rural communities.
“All municipalities have a problem but for the larger communities, it is a question of the level of service they can provide,” Douglas said.
“For many rural and small communities, we’re not too far from the survival bottom line so it is not a question of service levels but whether the community will survive. We have had hundreds that have not.”
The report concluded that rural municipalities have a particular problem in financing their
operations.
“Rural municipalities in Canada, because of their relatively small economies and some political reluctance to aggressively expand their user fee practice, continue to rely particularly heavily on the local residential property tax base,” said the report.
This has resulted in “deferred capital maintenance, especially in physical infrastructure.”
It recommends investment in broadband internet service throughout rural Canada, an unfulfilled promise by a succession of governments.
The report also recommends federal and provincial investment in rural transportation infrastructure.
But Douglas said the response from more senior levels of government must go further.
“It’s true that some shrink below the critical mass needed to keep a community viable but I think there is a public policy question here that the government of Canada or the government of Saskatchewan or whatever province needs to address. If a rural community shows the will and determination to survive, should it receive investment? I would say yes. If not, then the question arises. Who makes these community life and death decisions?”
