Australia and Canada are both federations with many similarities in law and culture. Federal constitutional recognition has eluded Local Government in Canada just as it has Australia. As a result Canadian Local Governments are ‘creatures of the Provinces’ just as Australian Local Governments are ‘creatures of the States’.
Canadian Local Government faces many challenges that are similar to Local Government in Australia. In particular, the dominant property tax is not adequate to fund local services. In both countries, growth in user charges has helped to a degree to fill the breach. As in Australia, Canadian Local Government infrastructure is in need of repair and in both countries the Federal Government has provided significant funds to help address the backlog.
Canadian Local Government has significant debt, unlike Australia. In Canada, growth in transfer payments from the Federal and Provincial Governments has been modest in recent times. Apart from the infrastructure program, Federal transfers are small and are mainly in the form of payment in lieu of rates for Federal property.
Local Government in Canada, as in Australia, provides a range of property services including transport and communications, planning and development and recreational and cultural services. But it also has responsibility for significant fire and police services, which is a major difference with Australia.
Municipalities, particularly the bigger Canadian cities, have a significant role in social services and local revenues are insufficient to fund expenditures on social services, health and housing.
As in Australia, Canadian Local Government provides a range of commercial services, such as water and sewerage. However, in Provinces such as Quebec, Ontario and Alberta, the range of Local Government commercial services is broader and can include electricity, phone, gas and transit services.
In Australia these network type services have usually been privatised.
The range and depth of Local Government services also varies markedly by Province. In New Brunswick, people services, such as education, health, justice and social welfare, are Provincial Government responsibilities, while property services, such as policing, fire protection, recreation, land use planning, water and wastewater, local roads and recreational facilities, are municipal responsibilities.
In Australia, the range of services provided by Local Government in each State is fairly uniform, with the major exception being the water and sewerage services that are provided by Local Government in Queensland, regional New South Wales and Tasmania, but by State Governments elsewhere.
Power is highly decentralised among ten Canadian provincial and three northern territories, with Provinces having more financial strength and autonomy than Australian State Governments. They have specific rather than residual powers and they do most of the revenue raising and service delivery.
Canadian provinces have specific constitutional authority over Local Government and the 3,700 Local Governments have limited fiscal and policy autonomy.
It is the Provinces that provide the main tax transfer to Local Government. These transfers are highly conditional and fluctuate according to the financial fortunes of individual Provinces, many of which have a significant debt burden.
Local Government in Canada – driven by the need to secure a more adequate revenue base – has sought, but not won, constitutional recognition. The Federation of Canadian Municipalities is now seeking better outcomes for Local Government within the existing constitutional framework.
* Adapted from the Local Government National Report 2002-03 – www.dotars.gov.au.
