CANWest Articles

Please welcome asymmetrical federalism

The Vancouver Province, October 25, 2004

By Roger Gibbins

Surely Canada is the only country in the world where leaders can trumpet an awkward mouthful like "asymmetrical federalism" as a bold new constitutional principle.

This happened earlier in the fall when the first ministers signed off on a new health-care accord that recognized Quebec need not account for the infusion of additional federal funding in the way expected for other provinces.

When asymmetrical federalism was proclaimed as part of the health accord, many national commentators predicted a vigorous political protest from the West where anything smacking of special status for Quebec is viewed with suspicion or even hostility.

But protest was hardly detectable. Why? To answer this, we have to return to the opposition of western Canadians to earlier attempts to formalize a special status for Quebec in the 1987 Meech Lake Accord and 1992 Charlottetown Accord.

The problem for western Canadians did not lie in a distinct status for Quebec, one that was apparent through the Quebec Pension Plan, special bilateral immigration agreements and favourable program treatment.

Like it or not, special status was a fact of life. However, whether it should be constitutionally enshrined was another matter. Westerners argued for the constitutional equality of provinces, a position that precluded any constitutional recognition of a distinct status for Quebec.

When the new constitutional amending formula was unveiled in 1982, it reflected the notion of provincial equality more than it did of a distinct society in Quebec. Given this, why the muted 2004 response to asymmetrical federalism, which appears to acknowledge a special status for Quebec?

First, Quebec now plays a greatly diminished role in the political world of western Canada. Comparisons between Quebec and the West have all but disappeared as western Canadians look forward to the future of their own region.

Second, it's assumed the principle of asymmetrical federalism will apply to all, and thus that the principle of provincial equality has not been violated. In short, asymmetrical federalism is not seen as recognizing Quebec's special status, but as an option for all.

If western perceptions are correct, this means a more decentralized or more differentiated federal system with room in the West for policy innovation and experimentation. More importantly, it meets Quebec's concerns for recognition without causing great angst in the West. However, this optimistic forecast could go off the rails if the following happens.

First, if political discourse in Quebec frames and promotes asymmetrical federalism as recognition of Quebec's special status, the West will protest.

Second, Ottawa may in practice apply the principle to Quebec, but not to other provinces. It may tolerate the privatization of health-care delivery in Quebec while resisting it in Alberta.

Third, Quebec may push asymmetrical federalism to the extent that it and the rest uneasily co-exist in different public-policy worlds. In the short term, we have the essence of a truly Canadian bargain -- a term that recognizes a special status for Quebec while also recognizing the equality of the provinces for western Canadians. It is asymmetry, interpreted asymmetrically.

Natural Capital's time has come

Winnipeg Free Press, October 21, 2004

By Les Brost

Every once in a while, someone comes up with a big, shiny, whiz-bang of a concept, and the world sits up and pays attention. Folks quickly lather up their brain cells examining the ramifications of the latest "big idea." Furious debate breaks out between the devotees of the new "big idea" and those who have an interest in maintaining the status quo.

Yet others are saying that there is truly nothing new under the sun -- that everything new is built on the framework of something that already exists. This school of thought believes that genius comes in finding new and innovative adaptations of old knowledge and wisdom.

The concept of "Natural Capital" is one of the newest "big ideas". It is currently hotter than an old ranch pick-me-up with a broken fan belt. The idea of having our society formally ascribing value to the natural landscape is catching on cut-cat quick with the West's movers and shakers. Some of our key industry honchos are already working together to encourage governments to travel the Natural Capital Highway

Is natural capital really a brand-new idea? Consider the farmer down at Plum Coulee, Manitoba, who has stubbornly refused to drain a 20-acre slough at the top end of his cropland. Why does this silly bugger refuse to hire the bulldozer to turn 20 acres of marsh grass, bullfrogs and blackbirds into hard red spring wheat at 50 bushels to the acre? How can he turn his back on the dollars of per-acre support payments that come to the owners of "productive" farmland?

Down at Manyberries, Alberta, there's the hardnosed rancher who won't get with the program and break that section of virgin prairie grassland. He stubbornly refuses to bring in the breaking plow even though government programs pay bigger bucks to support broken land.

These people do what they do because they value the landscape and what it provides. Despite the signals received from all levels of government and industry, they persist in working for a sustainable environment -- something above and beyond what is expected from responsible land managers.

So why don't more folks do the right thing for the environment? Does the problem lie with government? Do Holsteins do the tango?

We, the public, call the shots in our society. Most times, our politicians don't lead -- they follow. When we say that we value the natural landscape and then refuse to put our money where our mouth is, our governments happily sit on the public wallet. Perhaps we should listen to that grand old philosopher Pogo when he says, "We have seen the enemy, and the enemy is us".

People who believe in a sustainable environment see the "Natural Capital" concept as a winner. It proposes putting real value to the true "Alberta Advantage", or "Manitoba Advantage", or "Saskatchewan Advantage" -- our marvelous landscape. By encouraging our governments to adopt the "Natural Capital" concept in policy-making, we can begin the process of structurally shifting our primary resource industries to a foundation of sustainability.

As one of those bedrock industries, agriculture can benefit from implementation of the Natural Capital philosophy. Preserving and creating value in the landscape gives land-managing entrepreneurs new market opportunities. By amending the criteria of some recent agriculture support programs with perverse environmental impacts and messages, the playing-field between traditional production pressures and environmental sustainability can be levelled.

Boil all of this theory down, and you are left with the truth understood so clearly by the Plum Coulee farmer and the Manyberries rancher. It is all about the land. Whether we use it for farming, forestry, mining or urban development, the basic resource is still the land, and the debate is over how we value and plan for its end-use.

Trying to calculate the value of a particular end-use without knowing the value or cost of the various components is like trying to count cows with your eyes closed. That's what we are doing as long as we ignore the value of natural capital contained in our landscape. Integrating the concept of natural capital into government policy could have huge implications for our agricultural industry and the men and women who manage the land. Calculating the value of the assets in our natural capital "bank," such as our virgin grasslands and functioning watersheds, would result in very different agricultural policies. It would also have an impact on the location of urban growth.

Are we talking "radical revolution" in conservative Alberta, or even NDP-ruled Saskatchewan and Manitoba? Does this sound like a "silver bullet" for land-use conflict? Before we saddle up our horses and thunder off to the paradise of Natural Capital, we should wash our faces in the cold waters of Reality Creek. Urban growth onto land historically used for agriculture will continue. Huge farms will continue to compete in the global commodity production market. More and more smaller operations will look for opportunities to add value to products and diversify their income streams. Governments will continue to respond to industries in difficulty. Hard decisions and debates involving land use will continue to bedevil our society.

However, the context in which land-use decisions are made would change. Land-use decisions rooted in the concept of natural capital would result in outcomes more closely aligned with the public good.

Until now, most of us have been hitchhikers on Stewardship Road, trusting those good folks in Plum Coulee and Manyberries to protect our provincial advantages. We say we care about preserving our environment, but we have wanted to preserve the environment on somebody else's dime. Like the old Manyberries' rancher says, "Talk's cheap, but it don't buy whisky".

That is changing. There is a growing awareness that the West can't just hitchhike to a long-term, sustainable landscape. Our society is beginning to acknowledge the need to have a direct stake in the building and preserving of our provinces' natural capital. Society's recognition of the public interest in land-use decisions might frighten some folks in the agriculture industry. They may even see it as bad news.

The reality is that if the philosophy of natural capital were adopted, there would be bad news and there would be good news. The public would be carefully watching the land-use decisions that are being made by land managers.

That is bad news for land managers who don't consider and value the natural capital in our environment. The good news is that folks who do things that enhance our natural capital would be rewarded. That is very, very good news, and that's why Natural Capital is a "big idea" whose time has come.

Les Brost is an Alberta Agricultural Food Council member, chairman of the Alberta Ag Summit and Agrivantage Strategic Initiative Committee Chair, and an advisor on the Canada West Foundation's Natural Capital Project.

Less than nine cents out of every tax dollar goes to property tax

10/12/2004

CALGARY, Alberta, Oct. 12, 2004 – Property tax, a new report from the Canada West Foundation states, represents only a small portion of total tax bill facing the average Canadian.

The report, called Straight Talk: Property Tax in Western Canada’s Big Six and released today, shows that less than 9 cents out of every tax dollar goes to maintaining services such as civic administration, emergency response, policing, and roadways.

“When you remember that roughly half of the property tax is dedicated to education,” Senior Policy Analyst and author Casey Vander Ploeg said, “it doesn’t leave much for services we all count on.”

In the early 1960s, Canadians paid about 14.6¢ out of every tax dollar in property tax (for municipal and education purposes), he said. By 2000 all forms of property tax comprise less than 9¢ out of every tax dollar paid. With roughly half of this amount dedicated to education, the municipal property tax comprises less than 5¢ out of every tax dollar collected across the country.

Even more important, he said, when measured against personal incomes, the amount of municipal property tax collected today in the six big western cities is among the lowest levels seen in the past 40 years. “Are property taxes out of control? Hardly. Blaming municipal property taxes as leading to an ever increasing tax burden for the average Canadian is misplaced.”

To download a copy of the report, click here.

Below are statistics for each of western Canada’s six biggest cities.

EDMONTON

Are current property tax levels high relative to historical levels in Edmonton?

Not really. To be sure, Edmontonians are paying more municipal property tax in absolute terms than they were 40 years ago. But when these amounts are controlled for inflation and population growth in the city, the real per capita municipal property tax has been falling steadily since the early 1980s.

When Edmonton’s municipal property taxes are measured against the personal incomes out of which they must be paid, Edmontonians are paying some of the lowest municipal property taxes in the past 40 years. Are property taxes out of control? Hardly.

A declining property tax burden in Edmonton means the City has foregone millions in property tax revenues since 1990:
In 1960, municipal property taxes in Edmonton represented 3.36% of personal incomes in the city. In 2003, municipal property taxes represented 2.38% of personal incomes. If in 2003 the City of Edmonton had collected property taxes at the 3.36% level, the City would have seen another $189.7 million in property taxes collected in 2003 alone.

Over the 1960-2003 period, Edmonton’s municipal property taxes represented an average of 2.76% of personal incomes earned in the city. If this average had been maintained throughout the 1990-2003 period, the City would have collected another $58.3 million in property taxes over the 1990-2003 period.

The argument here is not that Edmonton should have kept the property tax to income ratio steady. Rather, the essential point is that when it comes to property taxes and their relation to income, Edmontonians are not paying an inordinate amount of municipal property tax relative to historical levels. A relatively low property tax burden that is also declining implies that there is at least some room for cities like Edmonton to employ the property tax as one means to help address any under-funding of municipal services and also come to grips with a sizeable infrastructure deficit facing the city.

CALGARY

Are current property tax levels high relative to historical levels in Calgary?

Not really. To be sure, Calgarians are paying more municipal property tax in absolute terms than they were 40 years ago. But when these amounts are controlled for inflation and population growth in the city, the real per capita municipal property tax is no higher today than it was in the early 1990s.

When Calgary’s municipal property taxes are measured against the personal incomes out of which they must be paid, Calgarians are paying some of the lowest municipal property taxes in the past 40 years. Are property taxes out of control? Hardly.

A declining property tax burden in Calgary means the City has foregone millions in property tax revenues since 1990:
In 1960, municipal property taxes in Calgary represented 3.57% of personal incomes in the city. In 2003, municipal property taxes represented 2.15% of personal incomes. If in 2003 the City of Calgary had collected property taxes at the 3.57% level, the City would have seen another $455.2 million in property taxes collected in 2003 alone.

Over the 1960-2003 period, Calgary municipal property taxes represented an average of 2.65% of personal incomes earned in the city. If this average had been maintained throughout the 1990-2003 period, the City would have collected another $1.0 billion in property taxes over the entire 1990-2003 period.

The argument here is not that Calgary should have kept the property tax to income ratio steady. Rather, the essential point is that when it comes to property taxes and their relation to income, Calgarians are not paying an inordinate amount of municipal property tax relative to historical levels. A relatively low property tax burden that is also declining implies that there is at least some room for cities like Calgary to employ the property tax as one means to help address any under-funding of municipal services and also come to grips with a sizeable infrastructure deficit facing the city.

SASKATOON

Are current property tax levels high relative to historical levels in Saskatoon?

Not really. To be sure, residents of Saskatoon are paying more municipal property tax in absolute terms than they were 40 years ago. But when these amounts are controlled for inflation and population growth in the city, the real per capita municipal property tax is no higher in 2003 than it was in the early 1990s.

When Saskatoon’s municipal property taxes are measured against the personal incomes out of which they must be paid, residents of Saskatoon are paying some of the lowest municipal property taxes in the past 40 years. Are property taxes out of control? Hardly.

A declining property tax burden in Saskatoon means the City has foregone millions in property tax revenues since 1990:
In 1960, municipal property taxes in Saskatoon represented 2.37% of personal incomes in the city. In 2003, municipal property taxes represented 1.95% of personal incomes. If in 2003 the City of Saskatoon had collected property taxes at the 2.37% level, the City would have seen another $20.5 million in property taxes collected in 2003 alone.

Over the 1960-2003 period, Saskatoon’s municipal property taxes represented an average of 2.31% of personal incomes earned in the city. If this average had been maintained throughout the 1990-2003 period, the City would have collected another $153.5 million in property taxes over the 1990-2003 period.

The argument here is not that Saskatoon should have kept the property tax to income ratio steady. Rather, the essential point is that when it comes to property taxes and their relation to income, residents of the city are not paying an inordinate amount of municipal property tax relative to historical levels. A relatively low property tax burden that is also declining implies that there is at least some room for cities like Saskatoon to employ the property tax as one means to help address any under-funding of municipal services and also come to grips with a sizeable infrastructure deficit facing the city.

REGINA

Are current property tax levels high relative to historical levels in Regina?

Not really. To be sure, residents of the city are paying more municipal property tax in absolute terms than they were 40 years ago. But when these amounts are controlled for inflation and population growth in the city, the real per capita municipal property tax has been falling steadily since the late 1980s.

When Regina’s municipal property taxes are measured against the personal incomes out of which they must be paid, residents of the city are paying the lowest municipal property tax ever in the past 40 years. Are property taxes out of control? Hardly.

A declining property tax burden in Regina means the City has foregone millions in property tax revenues since 1990:
In 1960, municipal property taxes in Regina represented 3.48% of personal incomes in the city. In 2003, municipal property taxes represented 2.31% of personal incomes. If in 2003 the City of Regina had collected property taxes at the 3.48% level, the City would have seen another $55.3 million in property taxes collected in 2003 alone.

Over the 1960-2003 period, Regina’s municipal property taxes represented an average of 2.97% of personal incomes earned in the city. If this average had been maintained throughout the 1990-2003 period, the City would have collected another $200.4 million in property taxes over the 1990-2003 period.

The argument here is not that Regina should have kept the property tax to income ratio steady. Rather, the essential point is that when it comes to property taxes and their relation to income, residents of the city are not paying an inordinate amount of municipal property tax relative to historical levels. A relatively low property tax burden that is also declining implies that there is at least some room for cities like Regina to employ the property tax as one means to help address any under-funding of municipal services and also come to grips with a sizeable infrastructure deficit facing the city.

WINNIPEG

Are current property tax levels high relative to historical levels in Winnipeg?

Not really. To be sure, Winnipegers are paying more municipal property tax in absolute terms than they were 40 years ago. But when these amounts are controlled for inflation and population growth in the city, the real per capita municipal property tax has been falling steadily since the early 1990s.

When Winnipeg’s municipal property taxes are measured against the personal incomes out of which they must be paid, Winnipegers are paying the lowest municipal property taxes ever in the past 40 years. Are property taxes out of control? Hardly.

A declining property tax burden in Winnipeg means the City has foregone millions in property tax revenues since 1990:
In 1960, municipal property taxes in Winnipeg represented 3.51% of personal incomes in the city. In 2003, municipal property taxes represented 2.84% of personal incomes. If in 2003 the City of Winnipeg had collected property taxes at the 3.51% level, the City would have seen another $106.0 million in property taxes collected in 2003 alone.

Over the 1960-2003 period, Winnipeg’s municipal property taxes represented an average of 3.47% of personal incomes earned in the city. If this average had been maintained throughout the 1990-2003 period, the City would have collected another $257.9 million in property taxes over the 1990-2003 period.

The argument here is not that Winnipeg should have kept the property tax to income ratio steady. Rather, the essential point is that when it comes to property taxes and their relation to income, Winnipegers are not paying an inordinate amount of municipal property tax relative to historical levels. A relatively low property tax burden that is also declining implies that there is at least some room for cities like Winnipeg to employ the property tax as one means to help address any under-funding of municipal services and also come to grips with a sizeable infrastructure deficit facing the city.

VANCOUVER

Are current property tax levels high relative to historical levels in Vancouver?

Not really. When Vancouver’s municipal property taxes are measured against the personal incomes out of which they must be paid, residents of the city are paying some of the lowest municipal property taxes in the past 10 years. Are property taxes out of control? Hardly.

A declining property tax burden in Vancouver means the City has foregone millions in property tax revenues since 1990:
Over the 1990-2003 period, Vancouver’s municipal property taxes represented an average of 3.28% of personal incomes earned in the city. If this average had been maintained throughout the 1990-2003 period, the City would have collected another $24.6 million in property taxes over the 1990-2003 period.

The argument here is not that Vancouver should have kept the property tax to income ratio steady. Rather, the essential point is that when it comes to property taxes and their relation to income, residents of the city are not paying an inordinate amount of municipal property tax relative to historical levels. A relatively low property tax burden that is also declining implies that there is at least some room for cities like Vancouver to employ the property tax as one means to help address any under-funding of municipal services and also come to grips with a sizeable infrastructure deficit facing the city.

For more information:
Gary Slywchuk
Communications Officer
Canada West Foundation
403-264-9535

The Canada West Foundation is an independent, non-partisan, non-profit institute dedicated to the production and dissemination of objective research for informed public debate, and initiatives for active citizen engagement in Canada’s public policy process.

Canada West Foundation
Suite 900, 1202 Centre St. S Calgary, AB T2G 5A5
Ph: (403) 264-9535 Fax (403) 269-4776
E-mail: cwf@cwf.ca

Regional Issues 2004