Monthly Archives: June 2015

N1agara: Cui Bono?

Hubbub about One Niagara City (N1agara is my chosen, 21st-century moniker) has cropped up again recently, due to a meeting of local business leaders.  (http://www.stcatharinesstandard.ca/2015/06/23/region-gets-blast-from-business-sector)

Let me start by saying George Darte and Tom Rankin are great business leaders and great community leaders. Each has made a large, lasting and positive impact in Niagara through both their businesses and their community work. It is important, however, to remember that they are not a Business/Community Leader. Being successful in business does not necessarily mean you’re going to become a community leader, and being a community leader does not require you to be a business person. In a similar vein, it is important that we are able to separate “what’s good for the business community” and “what’s good for the community.” These will (often) be one and the same, but not always.

I’ve discussed N1agara previously (https://niagaranext.wordpress.com/2014/09/16/oneniagara/) but wanted to try to answer a more specific question this time around. Namely: Cui Bono? Who benefits from N1agara? Without re-stating my previous post in its entirety, a quick summary: Niagara does not have a single urban centre the region revolves around, amalgamation has not found success where it has been tried and finally, amalgamation does not lead to a decrease in municipal spending (http://www.thestar.com/news/gta/2014/01/13/amalgamation_brought_fewer_ontario_cities_but_more_city_workers_report_finds.html).

The last point is an important one, as cutting costs leading to reduced taxes is the most frequently cited argument for N1agara. In many ways, amalgamation is more about taxes than it is about governance. Improved service delivery and “cutting red tape” are usually cited as potential byproducts of amalgamation. But make no mistake, the crux of the pro-N1agara argument is about cutting costs.

In fact, in the very Standard article that kick-started the recent outbreak of hubbub, here are some quotes from local business leaders:

“[W]e want one City of Niagara. That’s your first line item in cutting costs.”

“We have to do something, we’re almost bankrupt. We’ve got seniors who can’t afford to pay our taxes. We’ve got working people who can’t afford to pay our taxes”

“If (the interest rate) spikes — if Putin decides to start shooting, which he probably will and the interest rates start climbing, you are bankrupt,” Fox said, referring to Russian President Vladimir Putin and his aggression in Ukraine. You are going to be going the way of Detroit. There’s a part of me … that actually would like to see that happen, because it would solve the problem. So if you don’t want that to happen … stop spending money. We need a plan to significantly pay off the debt over time.”

(I included that last one for comic relief; the idea that an outbreak of a large-scale war with Russia would be particularly worrisome for us locally because of Niagara Region’s debt load is hilariously single-minded, and only topped by comparing us to Detroit, a city that claimed bankruptcy for a multitude of reasons but had a debt load 3600% higher than we do currently. Maybe don’t use the “Detroit” comparison quite yet…)

Sounds like our taxes compare negatively to the rest of Ontario.

http://www.niagararegion.ca/government/budget-taxes/municipal-tax-comparisons.aspx

It would appear our tax rates for similar residential, commercial and industrial properties is actually close to the lowest among comparable municipalities in Ontario . In fact, businesses seem to get a big break in Niagara, considering the lower tax rates for residential, commercial and industrial properties. Certainly, at worst, our tax rate could be considered “normal” if not “low”. This leaves alone other ways businesses are aided in Niagara, like development charges being waived (http://www.niagarafallsreview.ca/2013/01/18/region-waives-development-charges-for-industry), or money simply handed to businesses by government  to the tune of 19.7 million dollars (http://www.stcatharinesstandard.ca/2015/04/22/speedway-incentives-approved ) (talk about picking winners and losers.)

What about that pesky debt rate, how does it compare?

Long-Term Liabilities (debt)/Capita
Hamilton  $                     702.83
Durham Region  $                     343.47
Waterloo Region  $                     840.46
Niagara Region  $                     606.58

So, amalgamation wouldn’t help cut costs, and Niagara doesn’t currently have significantly higher taxes or debt load even if it did. So why is the business community crying out for lower taxes (by way of N1agara)?


Cui Bono?

If taxes aren’t the reason businesses are staying away (as our tax rates are good or normal), lowering them further won’t help attract more businesses. Even if N1agara did lead to lower taxes, (which we’ve seen it hasn’t), who would benefit from this? Currently established businesses (like I don’t know, all the ones at the roundtable at the Region this week) would save significant amounts of money right away if taxes were lowered. Cuts to services would be required, as we have seen that attrition alone isn’t enough to put amalgamated municipalities in the black. Even if laying off staff was enough, it just means a higher unemployment rate when those municipal workers are laid off. So unemployment goes up, services get worse and this benefits Niagara how?


 

Conclusion

The main problem with Niagara’s problems is that we have not even articulated, let alone agreed upon, Niagara’s problems or possible solutions. We have just consistently heard from the business community about its problems because it has a loud voice and a united goal ($$$). Again, I like George Darte and Tom Rankin, but this isn’t about the greater good. I’m not discounting the business community, I think good, responsible and successful businesses are important to any community. But that is just one part.

Is status quo acceptable? I think any reasonable person would say that it is not. We know that the jobs issue is a big one, but is it the only one? Is it a cause of problems or a symptom of problems or both?  Is the problem that we are spending too much or not spending enough to provide better services that may attract businesses and people? Are we overgoverned, misgoverned or adequately governed? Should we amalgamate or better collaborate while maintaining our municipalities? Do we want to become a commuter, bedroom community? There are a myriad of complex questions that N1agara seeks to solve with one solution. It cannot.

It is fine (and great!) to have an opinion on the proper way forward, but it should be backed up by facts, precedents and impact if it is to be taken seriously. An absolutely exhaustive statistical analysis of amalgamation is beyond my scope, but it also hasn’t been carried out yet, so why are still putting the N1agara horse before the analysis cart?

My opinion? Sure, you’ve come all this way: leverage our advantages (like tourism dollars and proximity to the border) to provide better services (roads, transit, community programs) without increasing taxes. Instead of a flat tax cut across the board, give the thousands of non-local students who graduate every year here a reason to stay in Niagara by providing property tax breaks for hiring Brock or Niagara College grads. Grow the population by making Niagara attractive to all, not just corporations. Address the complex issues with intelligent, nuanced solutions. Simple? Yes. But it requires a lot of cooperation and hard work.

Just one citizen’s opinion.

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