Municipal Spending Soaring and Unsustainable: CFIB

Operating spending vastly exceeds population and inflation growth since 2000

June 11, 2008 – Calgary/Edmonton – In its first annual Alberta Municipal Spending Watch released today, the Canadian Federation of Independent Business found growth in municipal operating spending is out of control: Population and inflation increased only 34 per cent between 2000 and 2006, while operational spending increased 56 per cent � or 1.65 times more.

In dollar terms, this lack of discipline represents $770 million of overspending in 2006 alone. �The bottom line for taxpayers is municipal spending is causing property taxes and fees to increase faster than our ability to pay. It�s time to start asking some tough questions about what�s going on because it�s just not sustainable,� said Danielle Smith, CFIB�s Alberta Director.

Property taxes, the biggest source of municipal revenue, increased 72 per cent between 2000 and 2006 while fees, which also generate significant income for municipalities, increased 64 per cent over the same period.

Of 18 cities, none were able to keep spending increases below the benchmark level of population and inflation growth. Six cities had spending that was more than double inflation and population growth including Cold Lake (4.67 times), Leduc (2.88 times), and Brooks (2.45). Per capita spending ranged from $1,853 per person in Fort Saskatchewan to $990 per person in Brooks. See backgrounder for details on 18 cities.

�There may be good reason for it, but when municipalities of roughly the same population, like Fort Saskatchewan and Brooks, spend vastly different amounts per person, it is important to ask why,� said Smith.

CFIB�s most basic recommendation is for municipal leaders to get a handle on what is going on. �Families and small business owners know how to control spending and make tough tradeoffs,� said Smith. �It�s time for overspending municipalities to learn to do the same.�

To arrange an interview with DANIELLE SMITH, contact Brian Gordon at 403-444-9290. The full report is available at www.cfib.ca.

CFIB is Canada�s largest association of small- and medium-sized businesses. Encouraging the development of good public policy at the federal, provincial and municipal levels, CFIB represents more than 105,000 business owners, who collectively employ 1.25 million Canadians and account for $75 billion in GDP.