'It's not how you build cities': Mayor calls for sustainable municipal revenue sources

Rapid population growth and a booming economy may prove to be a double-edged sword at London city hall.

On Tuesday, council’s Strategic Priorities and Policy Committee supported a motion requesting that the province review each level of government’s responsibilities and the corresponding funding sources.

• Council endorse the attached resolution from the Association of Municipalities of Ontario, requesting the Province of Ontario to undertake a comprehensive social and economic prosperity review to promote the stability and sustainability of municipal finances across Ontario.
• Council support Mayor Morgan, Councillor Franke, and Councillor Hopkins in raising these concerns at Ontario Big City Mayors, Federation of Canadian Municipalities, and Association of Municipalities of Ontario, respectively.

The goal is to ensure municipalities like London have greater financial stability.

“The property tax system in the Province of Ontario is 150-years old. It’s not how you build cities. This discussion has to happen,” Mayor Josh Morgan told council colleagues.

As the province’s fastest growing city, London is experiencing unprecedented demand for new infrastructure and city services, but rising costs and limited revenue sources are putting the squeeze on municipal finances.

“The municipality doesn’t actually have enough money to supply the services that Londoners expect,” explained Morgan. “That’s why a significant amount of our revenues are grants from other levels of government, so at some point we need to rebalance this”

Municipalities can generate revenue through property taxes, service fees, and grants from senior levels of government.

Since these revenues sources do not grow with the economy or inflation, municipalities increasingly rely to property taxes or user fees to cover costs.

Those revenue sources can unfairly burden people on fixed incomes and small businesses.

Morgan believes it’s time for a new arrangement between cities and the senior levels of government regarding their responsibilities and revenue sources.

“It does not mean more taxes for Londoners. It means a realignment of this imbalance,” he told CTV News. “So that we are not dependent for all of the things we do on some [funding] program that another level of government comes up with.”

The mayor says the province and feds have indicated they’re willing to have those discussions with Canadian municipalities.