Budget crunch (for municipal governments)

Municipalities have been called the closest level of government to the people. That's mostly because of the services they provide. If a sewer backs up in the basement, who are you going to call? Ottawa? Hardly. If someone breaks into your home you don't call your provincial capital. When you have a school problem, or need to talk to someone about garbage pick - up, or snow clearance; if you're going through a rough spell and need welfare, or you want to build an extension on you home -- you call your local government.

Municipal governments handle hundreds of the day - to - day needs of citizens. However, local governments don't have anywhere nearly enough money to provide all these services, so provincial governments chip in to help out. However, in recent years, the provinces have been chipping in less and less. City officials across Canada complain that the provinces are passing the buck but not the bucks.

One of the biggest burdens is social assistance (welfare). The cost of this is usually shared among the federal, provincial, and municipal governments while the last - mentioned level runs most of the programs. John Savage is now Nova Scotia's premier. In 1992, as Mayor of Dartmouth, he pointed out that his city was only supposed to pay 25% of welfare costs. But the provincial government was so strapped for cash that it cut back its share of welfare payments, leaving Dartmouth to pay 37% of the costs.

Since the recession began in 1989, welfare costs have been steadily rising. Winnipeg's welfare roll increased by 50% in 1991. That put the city's welfare spending about $12 million over budget. Saskatoon's welfare numbers increased 14% in 1991 to 8,676 people in December of that year. And, Canada's largest city has seen its welfare costs rise well above $1 billion a year. In 1988, Toronto averaged a monthly welfare caseload of 36,000; the recession has pushed this up to 117,000, giving the municipal government a double whammy. Many of the people now cashing welfare cheques used to be middle - class, property - owning taxpayers. So, while the number of welfare recipients is rising, the number of people paying taxes to support welfare is going down.

The story is the same in most municipalities across the country; the number of people on welfare is rising, those on welfare stay on it longer, more and more people with post - secondary education are drawingwelfare, and the number of people unable to pay municipal taxes is going up.

Of course, everybody, everywhere is trying to find a way out of this mess. There is a wide acceptance of the fact that welfare as it's currently operated doesn't work. Yes, there are some idle critters who prefer to live on a meagre welfare income rather than work. However, the vast majority of people on welfare would rather not be on welfare. Many are single parents who can't afford the cost of day care if they go out to work; many have low skill levels which excludes them from all but menial, temporary, and low - paid work; many would suffer financial loss by going off welfare -- a typical case would be someone needing expensive medication which is provided free on welfare but would have to be paid for out of their own pocket if they were employed; many could work part - time but now there is no incentive to do so because any money they earn must be declared and that amount is then deducted from their welfare cheque; some people are even cut off welfare if they receive financial help for job training.

Of course, these huge welfare bills are leading to cuts elsewhere. Libraries and recreational facilities have been the first to go. In fact, all non - essential services are under threat. Some municipalities are even having to reduce essential services such as policing and fire fighting.

Look at Edmonton. At $2.5 billion a year, Edmonton has one of the biggest municipal budgets in Canada. That's because in addition to the usual services Edmonton also operates its own telephone and power companies as well as municipal airport. Along with other Alberta municipalities, Edmonton has just taken a major hit. Last November, the provincial government slashed grants to Alberta's municipalities.

City politicians there, as elsewhere, are going to be working a lot of late nights trying to figure out how to share the pain around among the voters.

SUGGESTED ACTIVITIES:

1. Contact your local government and obtain a list of services it provides. Examine the list and divide the services into: (a) essential services that cannot be cut, (b) semi - essential services that can be reduced, (c) non - essential services that can be eliminated.

2. Some people say that welfare recipients should be forced to work on government projects such as snow shovelling for their money; this is sometimes called "workfare." Discuss the pros and cons of this approach.

Copyright Canada and The World Jan 1994
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