City of Toronto - One Cent NOW! Campaign

Federation of Canadian Municipalities

Cities generate dollars for Canada’s economy. Returning money back to cities makes sense.

Fill out our online petition.

• Cities asking for the return of one cent of GST on every dollar
• Cities power the Canadian economy
• City of Ottawa provides services that touch residents’ everyday lives
• Federal and provincial governments’ revenue sources grow with the economy
• Current funding from federal and provincial governments
• Federal government claims there’s room to cut GST
• What you can do to make Ottawa’s voice stronger

Cities asking for the return of one cent of GST on every dollar

Along with other cities across Canada, the City of Ottawa has joined the City of Toronto’s campaign entitled “One Cent NOW!” to lobby the federal government to return one cent of the existing GST back to Canadian municipalities. That means for every dollar that an Ottawa resident spends for goods and services, one cent would go back to the community where he/she works, lives and plays.

Cities power the Canadian economy

With over 80 per cent of Canadians living in cities, municipalities are the economic engines of our country’s strong economy. Ottawa, like other cities, feeds into the national economy by creating jobs and attracting investment and tourist dollars. Economic and policy experts agree that Canada’s cities lack the legislative and financial tools needed to adequately fund the services and programs they are obliged to deliver. If this municipal fiscal imbalance is not addressed soon, Canadian cities will be unable to continue to fund existing services and maintain public infrastructure. Correcting this situation is essential for Canada’s economic prosperity. In fact, the Conference Board of Canada – in its report “Mission Possible: Successful Canadian Cities” – states that Canadian municipalities require a funding source that grows in relation to the economy.

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City of Ottawa provides services that touch residents’ everyday lives

The City of Ottawa, like other municipalities, provides key services and programs that affect people’s everyday lives – like transit; roads and sewers; police, fire and paramedic services; social housing; and waste management and recycling. In addition to maintaining existing infrastructure, the City of Ottawa must also facilitate the continual growth of our city – creating new infrastructure and expanding services.

Our $2.6-billion budget is experiencing annual pressures of escalating costs to support the delivery of services and programs. This same challenge echoes true with all Canadian cities. These services, programs and infrastructure (roads, bridges and sewers) directly affect a city’s marketability to attract and retain businesses, investment and talented people. It’s creating a liveable, vibrant city that builds a strong local economic engine that helps drives both provincial and federal economies.

Each year, the municipal budget is faced with the challenge of limiting the burden on residents’ property tax bill and continuing to provide the same level of services and infrastructure requirements. Municipalities fund operations through property taxes, grants from federal and provincial governments, user fees, water and sewer rates and transfers from City reserve funds. However, none of these sources of revenue are growing at adequate rates to fund the annual growth in City costs. In addition, property taxes are relative to the real-estate market value, not based on the strength of the economy or consumer growth. In other words, operational demands are far and away outstripping supply. As a result, the City must look beyond taxation and user fees to other sources of revenue to bridge this widening gap.

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Federal and provincial governments’ revenue sources grow with the economy

Both the federal and provincial governments’ revenue streams grow when the economy grows. Their revenue resources are stable, and are also based on how much a person can afford – like income and purchasing power for goods and services (through the PST and GST). These stable and permanent sources of revenue include:

• Sales tax
• Income tax
• Corporate tax
• Resource tax
• Import duties

With the rate of inflation, the percentage of revenue increases attained by the provincial and federal governments exceeds those rates of the municipal governments.

Current funding from federal and provincial governments

Ottawa does receive some funding from both the federal and provincial governments. The federal government has provided financial assistance for public transportation through a phased-in share of the gas tax (1.5 cents in 2006 and two cents in 2008) and provided GST rebates on some purchased items. In addition to some one-time funding, the Province of Ontario raised its contribution to Ottawa for transit, paramedic (ambulance services), and Ottawa Public Health. Most of these used to be provincially delivered services, but have been downloaded to cities to deliver.

The federal and provincial governments have acknowledged that the money provided is not enough to meet the needs of municipalities. Cities in Ontario continue to hold discussions with the provincial government on funding issues on services that were once delivered and funded by the province. Besides the one-time funding, these services continue to be paid through the monies collected from property tax bills.

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Federal government claims there’s room to cut GST

The current federal government claims that there is room to trim another one cent of the GST. Canadian municipalities are now saying if there’s room to trim the GST, there’s room to invest in Canadian cities – the drivers of the Canadian economy. One cent of the GST could provide Ottawa and other Canadian cities a more stable and permanent revenue source that grows with inflation and the strength of the economy. It will also avoid a reliance on property tax increases to maintain effective programs and services, and could help provide the necessary infrastructure for our expanding city and ever-growing population.

What you can do to make Ottawa’s voice stronger

Together, we can speak for Ottawa in one strong, united voice to get our “One Cent NOW!” Fill out our online petition, contact your local MP, and if there is a federal election, talk to your candidates. Ottawa generates dollars. We also pay six cents in GST on every dollar we spend. It makes sense to ask for one cent of the existing GST to invest back into our city.

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