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November 17, 2009

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Canadian Taxpayers Federation ignores evidence

In the past few weeks, Maureen Bader of the Canadian Taxpayers Federation has appeared twice in the Vancouver Sun calling for more cost-effective delivery of municipal services.

In the first case (Change municipal budgeting, Oct. 19), she called on municipalities to outsource all kinds of so-called "non-core services" to the private sector.

In the second (Property taxes fund municipal high rollers, Nov. 9), she called on the provincial government to step in and prevent "tax-gouging municipalities" from forcing corporations to pay taxes.

In both cases, the key culprit in Bader's neo-liberal wrath was public sector wages. Bader, like her fellow ideologues in the CTF, is fond of using hyperbole ("struck gold," "hit the salary jackpot") to distort the realities of compensation while minimizing the important work that public employees do. When it comes to addressing the one factor that's crucial to any discussion of public sector wages -- the services that these workers provide -- Bader's cost-benefit methodology fails miserably.

Bader asks: "Do local governments really need to provide garbage collection, swimming pools, and daycares?" She contends that privatizing these services would allow Canadian cities to save "millions of dollars each year." The opposite is often true, as the Canadian experience with so-called public-private partnerships reveals.

Bader contends that municipal bureaucracy has "exploded." But according to a study by the Institute of Municipal Finance and Governance at the University of Toronto, municipal services that increased as a percentage of total expenditure for all Canadian municipalities between 1988 and 2004 were protection (fire and police), recreation, culture and environment (water and sewer). Those which decreased were transport, general administration, planning and debt charges. This paints a picture of municipal efficiency, of local governments increasing spending on needed services -- not on administration.

Bader cites a 50-per-cent rise in municipal spending between 2002 and 2008, plus a 26-per-cent rise in property tax revenue, as evidence of some kind of "rot."

But her figures don't account for the fact that we are an increasingly urbanized society, with 80 per cent of Canadians living in communities of 10,000 or more. Urbanized Canadians and British Columbians require police, fire, solid waste, sewer, water, recreation and cultural services. Thanks to this year's 22-per-cent cuts to provincial library grants, to cite only one example, municipal libraries must face the choice of either cutting services or having the funding gap filled by local municipalities.

Another example can be found in the significant cuts to gambling grants for arts and culture organizations. Municipalities are involved in arts, culture and recreation, and are being pressed to fill the funding gap created by the provincial cutbacks.

This is an important order of government within our society, and the Canadian Taxpayers Federation simply does not make the case that municipal governments spend or tax too much, or are excessively harsh on homeowners.

According to the Centre for the Study of Living Standards, the productivity of Canadian workers, as measured in output per employee, rose by more than 37 per cent between 1980 and 2005. And yet, in that same quarter century, median wages barely budged; instead, most of the benefits from this productivity went to employers.

As the Progressive Economic Forum has pointed out, one of the first casualties of recent economic recessions has been unionized workers, particularly in the public sector.

Although public and private contract settlements have come out just about equal over the past two decades, governments use the deficit hammer to attack unionized public sector wage bills. Allies such as the Canadian Taxpayers Federation are only too happy to help them.

This column originally appeared in the Vancouver Sun.