May 31, 2013

CFIB spokesperson blames downloading for muni cost increases


The Canadian Federation of Independent Business (CFIB) published a report this week talking about the alarming rate of increase in municipal spending and blaming it all on overpaid public employees.

It turns out their numbers are suspect but there are other problems that raise questions about whether this is just about a political agenda.

BC’s Liberal government has been very generous to business with its tax cuts.  But the business community wants even more and in January 2012 the government appointed the Expert Panel on Business Taxation.  The panel was to “provide analysis and recommendations to the Province on business tax competitiveness and administrative improvements to streamline the Provincial Sales Tax.”

The four experts on the panel were a director of Enmax, the CFO of Goldcorp, a managing partner from KPMG and Laura Jones, the CFIB’s Senior Vice-President for Research, Economics and Western Canada.

The report, published in August, looked at municipal spending and did not find rampant overspending.  What it found was:

BC has relatively low municipal (and overall) residential property taxes, compared to other Canadian jurisdictions. Non-residential taxes in BC are higher than residential taxes and are not dissimilar with non-residential taxes in other provinces.


Recently municipal costs have been growing faster than the combined rate of inflation and population increase. In many cases, these costs are driven by decisions that are outside the direct control of a municipality and require some form of collaborative action with other governments. The accelerated rate at which municipal costs are rising and the lack of an effective mechanism to address many key cost drivers is a matter of concern and the importance of this issue will grow if municipal expenditures continue to increase at the current trend.

The report calls for:

Managing cost drivers, including those created by federal and provincial regulatory requirements, rather than searching for new revenues or shifting taxes between taxpayers. To be successful, management of these cost pressures requires collaborative action between the provincial and local governments;

The CFIB’s Laura Jones signed the Expert Panel report, which found costs were often driven by factors outside the control of local governments, like provincial and municipal downloading.  That is quite a different conclusion than the CFIB’s own report.

Why the difference?  The CFIB’s agenda is tax cuts for business.  Period.  The Expert Panel’s report might help local government’s facing downloading, but it doesn’t contribute to the campaign to cut business taxes.   And when it comes to that campaign the facts, whether in municipal financial statements or in the reports of Expert Panels, play very little role.

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