Cities must get smarter about handling growth

First published in the Calgary Herald on Monday, October 24, 2005

Alberta municipalities need billions of dollars to pay for the costs of growth and development being spurred by the wild rush in the energy patch.  High and increasing world demand for oil and gas combined with the vast potential of the Alberta Tar Sands makes this once uneconomical resource a new frontier for development and profit.  

The opportunities are drawing big business and thousands of newcomers seeking employment and riches.  In Alberta, the boom is centered on Calgary, as the corporate home of the oil industry and Ft. McMurray, as the city closest to the actual tar sands.  And many other towns and cities in the province, particularly those located within the Calgary-Edmonton corridor are also dealing with the stresses resulting from growth. 

Nearly 100 per cent of the growth generated by thousand of migrating workers and executives is directed at cities and towns and, as a result, it is municipalities which are confronted with the brunt of the development cost.  Meanwhile it is the province which receives 100 per cent of the royalties the citizens are paid for the resource and decides how to dole it out.  

Canadian law dictates that municipalities are “creatures of the province” and any powers they have, including taxation powers, derive from that relationship.  The primary revenue generator for municipalities is property taxes, although they also charge user fees for many of the services they provide.  But lately, their limited revenue has been inundated by a tsunami of costs associated with the growth and development in the oil patch.  The dependent relationship between municipalities and provinces forces them to plea, like a diminutive Oliver to a hard-hearted Fagin, for more.

But municipalities are tired of being beggars.  From the floor of their recent convention AUMA President Bob Hawkesworth spoke of the urgent need for the province to provide a “sustainable” source of funding to meet current and projected infrastructure demands.  One suggestion being floated has been for the province to “create room” for municipalities by abandoning some of the education portion of municipal property taxes.  As nature abhors a vacuum, the new space, presumably, would immediately be snatched by municipalities striving to meet their funding requirements.  

With due respect, and while recognizing the difficult circumstances in which cities find themselves today, more money is not the sustainable solution to the urban crisis.  The reason is simple.  The system being supported by this funding is itself unsustainable.  How can unsustainable systems be funded sustainably?  If that sounds nonsensical to you I agree, but nevertheless, that it is what is happening. 

According to the City of Calgary’s own internal forecasts, somewhere around 90 percent of new growth in the city until 2025 and beyond will take place as suburbs on the agricultural fringes, a practice admitted by high ranking city officials that is known to be unsustainable.  It hardly makes sense to be spending billions on infrastructure that will be obsolete far before the end of its lifetime but this is precisely the approach to urban planning we in municipalities continue to follow.

Ponder it.  Municipalities are asking for money that will, in large part, be used for only two purposes: subsidizing new growth and development and catching up on the accumulated costs incurred by old growth and development.  Using this model, taxpayers in rapidly growing areas pay twice; once for new development and once again to maintain the world that new development has created.  Despite the upside down results this is the logic of our city-building practices.  

Not accounted for in this mindset, but that exist nonetheless, are the social costs that arise as the flip side of growth and development.  Poorer health resulting from congestion and pollution, increasing poverty, homelessness, and social isolation, and increasing gang-related crime, are but a few in the litany of expensive, long-term problems that come part and parcel with suburban growth and development.  

In the approach implicit in the AUMA’s request for more, lip service is paid true sustainability by trotting out examples of innovative developments or inner city densification, or new initiatives like imagineCalgary.  While these instances are indeed laudable, all the while the machine that is building the unsustainable parts of the system keeps on chugging away with no end in sight.  The very sad part is that we know they are unsustainable and we continue anyhow.  

Another critique involves the fate of the education portion of the property tax.  Where would that end up?  Since the motivation for the AUMA request comes from observing the growing bulge in the provincial treasury presumably they believe this is what’s giving the province the “room” to vacate part of the education property tax.  Does that mean we should be relying on what may be short-lived, windfall profits to fund our education system?  

Its sounds like more nonsense but that’s the implication.  When transient funding sources dry up so will the support for our education system if that is what they depend on.  Boards of Education, which are also suffering financially from having to provide education services in a sprawling city, will not be able to exist except in the face of a new education tax.  In this context the proposal by the AUMA is just another, somewhat nefarious, way to offload our financial problems to the next generation of citizen and taxpayer.  How sustainable is that?

None of this is to say I’m a supporter of the province.  Within the framework of Canadian law cities are very vulnerable to the funding whims of their provincial parent which has all the power and all the bucks.  So for meaningful change to happen there must be change on this front as well – municipalities need to be given new taxation powers that make sense – but unless the city building system that is now in place is altered, the results are guaranteed to be identical.

To get off the unsustainability merry-go-round we have to come to a fundamental realization that city-building practices have to change.  Instead of paying lip service to sustainability the AUMA should be leading in the search for a fresh approach.  Insanity, after all, can be defined as doing things the same way, time and again, yet expecting a different result. 

The key to a meaningful understanding of what does constitute sustainable development is to realize that the benefits of it come not in the form of profit, the standard metric of growth and development, but of future costs that don’t have to be incurred to pay for problems we can avoid creating today.  While the current boom, fueled by oil and gas is very good for business it is citizens who will be left holding the bag after all is said and done.