Local Prosperity: Executive Summary
The next few years will be challenging times for BC’s local governments.
Social and economic changes will require adaptation and innovation in our institutions and governance structures. In particular, the BC economy is in the midst of a major transition.
The need for broad-based municipal finance reform has long been recognized in numerous studies and reports, such as those published by the Conference Board of Canada, the Canada West Foundation, TD Bank Financial Group, and the Canadian Chamber of Commerce. However, little has been done in the past three decades to advance specific proposals for how cities in this province – or across Canada – pay for the services and infrastructure that residents and businesses rely on now, and will need in the future.
This discussion paper is intended to spark debate among BC’s local governments, residents and businesses about the state of finances. The aim is to begin a process of building consensus around a set of solutions to address the fiscal challenges facing our province’s 189 municipalities and regional districts.
The first chapter of this paper looks at how local governments are currently financed in British Columbia, and how those financing arrangements have changed over time. It also examines some of the challenges and issues associated with the current model of municipal financing in British Columbia.
The second chapter explores questions related to social, environmental and economic changes that are reshaping British Columbia. These changes are happening simultaneously at both the global and local levels. This chapter argues that BC is in the midst of a major economic transition that has important predicable consequences for local communities; consequences we must prepare for as best we can.
The ongoing economic transition requires that we develop new ways to finance local governments. It is argued that the most important aspects of the economic transition will be driven by demographic changes toward an aging, more urbanized population; industrial changes away from renewable resource extraction and processing; and changes in government financing arising from rising government debt and declining revenue buoyancy.
The third chapter looks at possible solutions to diversify revenue sources for local governments. Using examples and case studies from British Columbia and other jurisdictions, we explore solutions that would allow governments to diversify their sources of revenue.
In the fourth and final chapter, we examine a number of promising economic development policies to help BC communities grow their local economies. These ideas aim to diversify our economy; improve local multiplier effects with high-value industries; keep money circulating longer in our communities; and attract and retain business investment and human resource talent. Together, they provide a blueprint for a more self-sufficient, more entrepreneurial and more sustainable economy.