Cities are too important for municipalities alone.

MUCH OF THE DISCUSSION OF urban issues in Canada in recent years has focused on jurisdictional questions: amalgamation, city charters, municipal autonomy, even city-states. Andrew Sancton examines these debates and argues that the emphasis should be shifted from who does what to the well-being of cities themselves. All levels of government need to be "entangled" in the affairs of Canada's cities so that their policies, taken as a whole, support and enhance the quality of urban life. "Cities," he concludes, "are too important to be the sole responsibility of our municipalities."

THAT CITIES ARE OF INCREASING IMPORTANCE IN CANADIAN SOCIETY CAN hardly be contested. More and more of our economic activity takes place in cities, the proportion of our population living in cities continues to increase and, as Jane Jacobs continually reminds us, cities are the breeding ground for the innovation that is so necessary if we are to maintain our high standard of living and our ability to adapt to changing circumstances. That city governance is the responsibility of municipalities is often assumed. It shouldn't be. We must see city governance as being multilayered, involving the federal and provincial governments at least as much as municipalities.

When we think about federal and provincial governments, it is easy to be clear about boundaries. Except perhaps in Labrador, we know exactly where one province ends and another begins. Not so with cities. In ordinary language, the word "city" has many different meanings. Sometimes, as when people say "the city should keep the park clean," they are referring to the municipal government. At other times they might say, "the city boundary is at Princess Street," referring to the formal territorial limit of the municipality. But most of the time when people talk about "cities" they are referring to a social, economic and physical environment that means much more than whatever might be connected to the organizational apparatus of a particular municipality. Residents of Mississauga in Ontario quite properly often consider themselves Torontonians, just as residents of Laval in Quebec consider themselves Montrealers. Conversely, a resident of the vast rural area contained within the City (i.e. municipality) of Ottawa are making a meaningful statement when they say that they are going to drive "into the city," meaning they want to go to the urbanized area.

Cities or municipalities?

There are at least two ways in which the confusion between "city" and "municipality" manifests itself in our discourse about the governance of cities. The first problem is that many people start from the operating assumption that each city should have one municipal government. For small urban settlements, this undoubtedly makes sense. But large cities are complicated entities. Their urban development often extends around what were once freestanding towns and villages, which may or may not have had their own municipal governments. We need procedures for centre-city municipalities to extend their boundaries and even, under some circumstances at least, to absorb the municipal governments of nearby towns and villages. But it does not necessarily follow that each city needs only one municipal government. If anyone doubts this, they should reflect on recent debates about municipal governance in Toronto and Montreal. For these cities to have only one municipal government each, the new megamunicipal corporations of Toronto and Montreal (the creation of which caused considerable controversy in both places) would have to be further expanded so as to double their respective populations and at least triple their respective territories. Municipalities such as Mississauga, Markham, Laval and Longueuil would be no more.

It is true that many large Canadian cities do effectively have only one municipality; Calgary, Winnipeg, Ottawa, London and Halifax are significant examples. But this does not mean that boundary issues are solved. In each of these places, people can be found who think that, for some reason or other, the boundary should be further extended. Similarly, there are often people on the periphery who, if given a choice, would vote to secede on the grounds that they have little in common with the central city and do not receive the full array of urban municipal services. Despite all the effort that has been put into "municipal restructuring" in recent years, no one has been able to make the case that cities having a single large municipality are really any better off than those that have many smaller municipalities.

Vancouver is now the main Canadian example of such "municipal fragmentation." The central City of Vancouver had a population in 2001 of only 546,000 while the population of the entire metropolitan area (as defined by Statistics Canada) is just under two million. Whereas some suburban municipalities have populations of only a few thousand, Surrey's population is 348,000 and Richmond's is 164,000. Such fragmentation is now anomalous in Canada, but it is still the norm in the United States. It was once fashionable to argue that municipal fragmentation was the source of many of the severe problems of American cities. But central-city boundaries were generally not extended, suburban municipalities were never eliminated by state legislation--and the central parts of most American cities have experienced at least the beginnings of what seems to be a remarkable renaissance.

Even in cases where there is only one municipality for a city, it would still be a mistake to think of the municipality as "the government" of the city. This is because the functions of municipalities are so limited. Jane Jacobs has argued that, for cities to maximize their capacity to generate wealth, each should really have its own currency. Others have noted that municipalities have no control over who resides within their borders; no control over imports, exports or financial services; and limited fiscal freedom (especially in Canada) in relation to both borrowing and taxation. Attempts by municipalities (even more than central governments) to develop their own redistributive programs come to grief because they ultimately attract poor people and drive out taxpayers who can find lower tax levels elsewhere. Even for functions that are clearly municipal (e.g. zoning and land-use planning), central governments often control the general framework in which decisions are made (B.C.) and sometimes even engage in case-by-case reviews of the substance of particular local decisions to which objections are raised (Ontario Municipal Board).

The city-state solution

The problem, of course, is that for most cities in the world there is more than one level of directly elected government. In Canada, there are clearly three: federal, provincial and municipal. In some Ontario cities, a regional level brings the total to four (Kitchener in Waterloo Region, St. Catharines in Niagara Region). Just as some people want one municipal government for each city, others argue that we would be better off with only one level of government for each city. In their purest form, such arguments lead toward the desire for a citystate, Singapore perhaps being the world's most dramatic example. But Singapore does not exist as a sovereign city-state because of an abstract desire to establish the ideal form of city government. As with other sovereign countries, Singapore's boundaries are rooted in long histories of migration, war, political conflict and bargaining. Its location on its own offshore island has certainly facilitated its emergence as an independent political entity.

No one in Canada seriously advocates the creation of city-states like Singapore. There have, however, been suggestions from time to time that our cities would be better off separating from their respective provinces. Under such an arrangement, there would (in theory) be only two levels of government: federal and city-state. But such an arrangement is not as simple as it looks. The most obvious problem relates to boundaries. Would a Toronto city-state include Oakville? Hamilton? Kitchener? If it did not go as far west as Kitchener, it would not comprise the entire commuter shed, which for most serious regional planners would be one of the main reasons for having a city-state in the first place. If it did go out that far, then what would be left of Ontario?

In any event, a city-state for the Toronto region (however defined) would inevitably require the creation of municipalities within its boundaries. How else could local democratic decisions be made about such matters as zoning, park maintenance or street cleaning? Surely no one would advocate that such decisions for the Oakville area should be made by some central authority in downtown Toronto governing four million people. Adding municipalities within a city-state might seem redundant. But it is consistent with the reality of what municipalities actually do, as distinct from what central governments do.

Mayor Mel Lastman has been quoted as musing that perhaps his municipality, the City of Toronto, should separate from Ontario, thereby creating a city-state on the basis of a single municipality. If such an unlikely event were ever to occur, we would have provincial boundaries running right through Canada's most important urban area. It is hard to imagine what possible benefits could result from such bizarre political engineering.

Enhancing municipal autonomy

Most of the talk about city-states in Canada ends up being concerned with increased municipal autonomy. There are three major dimensions to any discussion about municipal autonomy: legal, financial and functional.

Improved legal status for municipalities can come about in many ways. One would involve formal guarantees of local autonomy in a national constitution, a measure long supported in Canada by the Federation of Canadian Municipalities. But the chances of this happening in the foreseeable future seem close to nil. Why would any of Canada's provinces effectively give up part of their total control of municipalities to the vagaries of court decisions about what such constitutional recognition might actually mean? National constitutions do protect municipalities in many countries, but the models Canadians most naturally think of, Britain and the United States, are not among them.

Most American municipalities have a form of constitutional protection--but it is at the state level through state constitutions. Canadian provinces do not have such constitutions, and therefore have no mechanism to entrench any form of municipal authority. This is why much of the current discussion in some provinces about the need for municipal "charters" is almost entirely meaningless. Legislatures can declare that a particular statute is a charter, and particular ministers at particular times can even declare such charters sacrosanct, but none of these actions can prevent a simple majority in a future legislature from amending the charter against the wishes of the local council or residents. Meanwhile, legislatures in Alberta, British Columbia, Newfoundland and Ontario have recently modernized their municipal statutes with a view to giving municipalities more freedom of manoeuvre. However, businesses subject to municipal regulation are not always supportive of additional municipal autonomy and, if sufficiently threatened by new municipal regulation, will doubtless challenge it in the courts. Then we shall have a clearer idea as to how meaningful such broad grants of municipal jurisdiction really are.

To some extent at least, recent demands for improved constitutional or legal status for municipalities stem from the legislated municipal amalgamations of the 1990s. People on both sides of the amalgamation debate argue that in the future large municipalities must be protected against arbitrary provincial action. The fact that it was arbitrary provincial action that created these large municipalities in the first place seems to be irrelevant.

Much more in the public eye these days is the claim that municipalities should be given more financial autonomy. Here the arguments are that they should have access to forms of taxation other than the property tax and that other levels of government should provide increased levels of financial assistance for services whose benefits transcend municipal boundaries. According to this argument, a central-government subsidy to public transit, for example, results in reduced pollution and congestion by helping to cut down the number of private cars in use. There are lots of good reasons why municipalities should have access to more money. There is certainly lots of evidence from around the world, including low-tax areas in the U.S., that allowing municipalities access to various forms of taxation (income and sales taxes among them) does not result in any kind of fiscal disaster.

The debate about financial resources for municipalities should not be separated from debates about the range of their functional jurisdiction. On this point, municipal leaders, including some of the mayors of our largest cities, often appear confused. Sometimes they are primarily concerned about "downloading." They seem to be objecting in principle to the notion that they should have responsibility for any redistributive functions, such as social housing. At other times, their message seems to be that such responsibility would be quite appropriate as long as municipalities obtained new taxation authority. But this latter position requires more thought. Would we really expect a municipality to raise its rate of municipal sales or income tax to finance its own social housing if neighbouring municipalities decided to have no social housing at all and to keep their tax levels low? Would such a course of action be fiscally sustainable?

Focusing on cities themselves

If municipalities are to be in any sense governments of their respective communities (and I believe they should be), then they must be involved in a wide range of governmental functions, including redistributive functions. This can only work if central (provincial, in the case of Canada) governments control relatively tightly what all municipalities do with respect to these functions. Through regulation and the judicious use of conditional grants, central governments can create minimum standards, preventing the "race to the bottom" that would be almost inevitable in their absence, especially in difficult economic times. But such central control must always leave room for some local flexibility; otherwise there is no point in having any local control. One of the great ironies of the Harris government's "local services realignment" in Ontario is that municipalities now spend huge amounts of money on Ontario Works (welfare) and associated programs, but elected municipal councils have virtually no authority to adjust these programs to local circumstances.

Most Canadian advocates of city-states, charter cities or just more autonomy for large municipalities seem to assume that this means more legal autonomy and access to forms of taxation other than the property tax. They are often silent on the scope of municipal jurisdiction, knowing that the more municipalities expand their functions, the more likely it is that they will face increased levels of provincial regulation and control. This is a problem for these advocates, because their vision is for municipalities to be as "disentangled" (to use a word once in vogue in Ontario) from the province as possible.

My vision is different: to be truly involved in the governance of their respective cities, municipalities must be infinitely entangled in almost every aspect of federal and provincial policies that affects their cities. This applies especially to municipalities whose territory includes the central parts of cities but, to a lesser extent, it applies to municipalities in more suburban areas as well. We have spent far too much time and effort in Canada reorganizing our urban municipal governments and trying to figure out exactly what functions should be local and what should be provincial. At various times, including the present, we have agonized over the possible role of the federal government. But we have spent far too little time and effort focusing on the well-being of the actual cities in which all three levels of government are inevitably involved.

One of the most important issues facing the central City of Toronto, for example, is the future of the Canadian financial services industry. The issue is also important to neighbouring municipalities, not just because many of their better-paid residents depend on head-office financial-services employment but also because many of the "backshop" operations of banks and other financial institutions can now be found in the suburbs. The regulation of financial services in Canada is largely under federal jurisdiction, but that does not mean that the mayor of Toronto should be silent on this issue of such vital importance to his city. Homelessness is another important issue in Toronto, where the homeless often reside on municipally owned property such as sidewalks and ravines. That should not be seen as an argument for the federal and provincial governments to neglect housing policy.

If the cities themselves had been our focus, rather than jurisdictional questions, our investments in urban infrastructure and social programs for low-income urban residents would not have been so recklessly reduced. No one should have expected that expenditures related to the well-being of cities would be immune to the cutbacks of the 1990s. But most of the fervent advocates of cutbacks in overall government expenditures were also supportive of the general process of globalization and were anxious to position the Canadian economy so as to maximize its possible benefits.

Adapting an economy to globalization means a lot more than cutting taxes. Virtually all of the serious literature on globalization points to the importance of cities as the incubators of the innovation and collaboration that are so necessary to compete successfully in the global economy. American public and private elites seem to have recognized this fact because, one way or another, they have invested billions of dollars in the last decade or so to revitalize and rebuild American cities. All of this has been done without any form of municipal reorganization and without extensive debate as to exactly who should be doing what.

The future of Canadian cities is not in the hands of our municipalities. It is in the hands of all levels of government, and of the wealthy Canadians and their companies who need our cities to make their money. Compared to many American cities, our cities are woefully short of sources of local private capital that can be called upon for civic purposes. This is in part because of the absence of local banks in Canada and because so many of our important companies are owned outside the country. This probably means that, if Canadians are to have cities that work for us in the global economy, governments need to play larger roles in our cities than they do in the United States.

Our municipal governments should be legally stronger, financially stronger and functionally stronger. But this does not mean that they should become increasingly autonomous or disentangled from the activities of the federal and provincial governments. In this sense--and this sense only--the movement for city-states and city charters can be counterproductive.

Cities in Canada need vibrant neighbourhoods and efficient, responsive and environmentally friendly urban services, including social services. These are the things that municipal governments look after best. To protect and enhance the quality of urban life in their respective areas, municipalities need also to be able to act as effective advocates for their communities with other levels of government. These other governments have to adapt and extend their policies so as to ensure that, taken as a whole, they support and enhance the quality of our urban life. Cities are too important to be the sole responsibility of our municipalities.

Andrew Sancton is chair of the department of Political Science at the University of Western Ontario. His most recent book, Merger Mania: The Assault on Local Government, was published by McGill Queen's University Press in 2000.