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The Globe and Mail

Calgary Mayor spreads a gospel of revenue sharing

Calgary Mayor Naheed Nenshi attended a luncheon hosted by The Economic Club of Canada, in Toronto on Sept. 21, 2011.

Chris Young for The Globe and Mail/chris young The Globe and Mail

Canadian cities will prosper or decline depending on the individual powers they can win from their provincial governments, predicts Calgary Mayor Naheed Nenshi.

"Right now, we have a situation where every city is facing the same problem," he said of the municipal budgetary crises being faced from Toronto to Calgary and beyond. "Absolutely, those cities that are able to negotiate better forms of revenue sharing with their provincial governments will be more successful going forward, no question."

Mr. Nenshi, who is currently on a cross-Canada tour promoting his city, told The Globe and Mail editorial board that he is more optimistic about winning long-term, predictable funding from Alberta's next premier than he is from the federal government.

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The best cities can hope for from Ottawa is some additional cash, he said, while provincial leaders can actually transfer taxation powers and empower municipal governments to control their own finances.

And with five provincial elections under way or about to be across the country, Mr. Nenshi said it is an opportune time for municipal leaders to press for concrete funding promises.

"I'm not sure there's a desire for a conversation at the federal level about transferring tools rather than transferring money," he said.

Mr. Nenshi said the two leading candidates to head Alberta's Progressive Conservative Party and become the next premier, Gary Mar and Alison Redford, have both expressed a desire to change the municipal-financing model.

Mr. Mar has suggested that the province vacate their portion of the property tax so cities can use it for capital funding, while Ms. Redford has suggested changing the way provincial oil and gas royalties are spent, which would see more designated to municipal infrastructure projects.

"That's a very creative idea," Mr. Nenshi said. "I have yet to hear politicians at other levels of government have bolder ideas."

Mr. Nenshi recently launched a website called Cities Matter, encouraging provincial parties to develop platforms on specific municipal issues, and said he was "happy to lend the domain name" to his colleagues in other cities.

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With the federally backed Building Canada infrastructure fund expiring in 2014, cities will have to establish a new source of revenue, he warned.

In less than a year in power, Mr. Nenshi has become a vocal advocate for Canadian cities, including his own. Along with Edmonton Mayor Stephen Mandel, he has been pushing for Calgary and Edmonton to be treated separately in legislation from all other provincial municipalities.

"I'm the mayor of a city that has more people in it than five provinces, yet I have the exact same legislative authority as any village of 30 or 40 people," he said. "And that has to change."

Mr. Nenshi said Canadian cities are facing budgetary crises as their growing costs drastically outpace their property tax revenues, a problem that will only get worse as the population ages and is unable to pay taxes on their homes.

The City of Calgary is facing a budgetary shortfall of $140-million this year, said Mr. Nenshi, despite being one of the most prosperous cities in Canada.

His stop in Toronto was part of an itinerary that will also see him visit Ottawa, Montreal and Halifax, encouraging Canadians to consider moving to his Alberta city.

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"We are in a position where labour market constraints are threatening to choke off our growth a little bit," he said. "We're trying to get ahead of that."

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