Notes from CTF Atlantic Director Kevin Lacey's address to the Atlantic Mayors Congress in Halifax.

Folks my name is Kevin Lacey, and I am the Atlantic Canada Director for the Canadian Taxpayers Federation. We are an organization that exists to stand up to politicians and to fight for the average taxpayer that so often is left behind.

Our Federation is not a business organization, nor does it have anything to do with government. And while we do accept donations from companies we are largely funded through the hard work of regular taxpaying citizens who share our values and give non-tax recieptable donations mostly through our website or through the mail.

This means our views are not driven by what we can achieve for a narrow few but rather what can we do for the average taxpayer, we work for those who just try to make ends meet and believe that for too long all levels of government take too much and give back too little.

Our organization was first formed 20 years ago during the late 1980’s.

The 1980s were indeed interesting times, many of the issues that Canadian faced then are still troublesome issues today.

Then federal and provincial spending was adrift, deficits were spiraling out of control and, along with raising taxes the Conservative government in Ottawa had introduced the brand new national value added tax known as the GST.

It seemed that for every promise a politician made not to raise taxes, was almost the same number of times that the commitment was broken, with governments reaching into the pockets of taxpayers.

There was a growing sense at that time that politics had gone wrong. Governments it seemed forgot that they were not the employer of taxpayers but they were the employees of taxpayers.

Anger began to boil over.

And people began to organize.

In small church basements, in community halls and large convention centers.  And they began to start groups of concerned taxpayers who didn’t see anyone fighting for them.

First a group was called the Saskatchewan Taxpayers then others groups in Alberta and other parts of the country began to spring up. All the organizations shared a common goal, of defeating the GST, reducing the size of government and getting the deficit down.

This new organization held rally’s in opposition the new tax, group’s spokesman testified before committees in the legislature and used the media to get their message out.

Then 20 years after the organization was formed the organization decided to move east, and hence just this past year we set up an office here in Atlantic Canada.

And while we didn’t win the fight against the GST all those years ago.

We’ve certainly won our share since. Here’s an example of a few of them.

For years unknown to most taxpayers, prisoners serving time in our federal penitentiaries were raking in thousands of taxpayer’s dollars in pension benefits thanks to lax laws and bureaucratic inertia.

One such prisoner Clifford Olson, serving multiple life time sentences was banking thousands of your and mine tax dollars in Old Age Security payouts. He was even trying to donate his money to the Conservative party of Canada.

As a result of our efforts a bill was presented in Parliament in November that was passed by all political parties that would end these outrageous payments to our nations toughest criminals.

Also our federation conducted research on our nations native reserves and found that payments to on-reserve politicians verged on the ridiculous. On one reserve near Hants County Nova Scotia, one band councilor was receiving almost a million dollars in contracts and salaries from a reserve that had just 87 people living on it.

As a result of our efforts the assembly of first nations has said that it will introduce new accountability measures on reserves to ensure that public money is not misspent. It’s an issue that we will continue to follow and speak out on.

Lastly, we opened our Atlantic office launching a report on the pensions that out provinces politicians receive.

And what we found shocked us.

The Nova Scotia MLA pension plan is far and away the richest plan in all of Canada. Its so rich that some MLAs can actually retire for the legislature and earn more in pension than they would in MLA salary.

Consider this…for every one dollar contributed by an MLA they receive back $22 from taxpayers.

Payout out to retired politicians cost the treasury $11 million each year, a tough number to accept when you consider the government is looking at laying off teachers and struggling to pay for health care.

We continued time at every opportunity to demand that these outrageous payouts to our politicians be reviewed. It’s our belief that any right minded review will use common sense and scrap this program once and for all.

And just a few weeks ago, the speaker of the Nova Scotia House of assembly launched a review of this outrageous pensions program, and will continue to follow this until the program if finally reformed so that its fair for all taxpayers.

Our slogan is Lower Taxes, Less Waste, and Accountable Government. These are the principals that guide us and these are the issues we fight for.

Today though I accepted this invitation because I wanted the opportunity to talk to you about the problems that face our regions municipalities.

Our Federation talks about, and gets involved in, issues at all three levels of government.

But I can tell you that at out Atlantic office, that despite provincial spending scandals, federal elections, the correspondence that comes into our office is overwhelmingly municipal related.

The fact of the matter is, that while politics dominates the discussions at the other two levels governments, people’s expectations are simple and not overly complicated. They want the best possible government services for the lowest possible taxes. And while I know it probably a cliché you hear often, it is municipal government that the taxpayers see first. 

And today I would like to talk about the taxpayer’s agenda for municipal ratepayers.

Our agenda has three components.

First, buck passing from other levels of government has to stop.

It seems every time the provincial and federal governments have themselves in a pickle financially they chose to do the “old roll the proverbial crap down the hill”.

So given the huge problems Federal and Atlantic Provincial governments are facing…you can bet that government’s will try this trick again…and when they do its going to be a whole lot harder to deliver municipal services.

The fact is our governments at both the federal and provincial levels are broke, running huge deficits with no real plan for how they are going to make it back to a balanced budget position.

To give you a sense for just how big the fiscal hole our governments face just look at what’s going on in Ottawa.

Thanks to minority government and increasing program costs our national debt is climbing at a rate of about $1,000 per second or $81 million per day.

In just the amount of time it take me to speak with you today our national debt will go up by another $2.4 million. And that doesn’t include the Provincial debt, where all four provinces are running deficits. 

The reality is, once the name calling, negative campaign ads and election rally’s are all over, something has to be done to address these huge budget shortfalls.

And my fear, that I am sure I share with all of you, is that when the government looks to balance the budget they will do as they did in the 1990’s…and simply attempt to download more of the costs of government on other levels.

Next year the Canada Health and Social Transfers are up for renewal and given the finances there is little if any chance that those agreements will be as rich as they are today.

And once provinces don’t get the money they were hoping, again savings will be looked at, and then their problems will land on your door steps and quickly become your problems. 

Politicians making budget decisions that simply pass the buck from one another government to another just doesn’t it cut it...at the end of the day there is just one taxpayer, and provincial and federal governments should get their own houses in order and not pass the buck to the municipalities.

I should also mention that we were, however, very pleased that the federal government committed to make the gas tax transfer permanent in their last budget.  This is something we’ve long argued for. In 2004, we drove a van from Victoria, BC to Ottawa demanding not only lower gas taxes, but that the gas taxes that are collected by Ottawa be transferred to those who build 80% of the roads in Canada – municipalities.  We called for a permanent “Municipal Roadway Trust” to be created that would ensure you had the funds you need to maintain and build new roadway infrastructure.  We’ve been successful in getting some of those funds transferred and we’re very pleased they are looking to make it permanent.

Second, lower taxes:

Our federation has been long time supporters of property tax cap. A Tax Cap would provide predictability for homeowners, businesses and local government. It would give local politicians the tool to say ‘no’ to incessant demands to increase spending from special interests with agendas.

It provides both taxpayers and government with predictable taxes.

Let me be clear, property taxes are a poor form of taxation.  But, and this is a big but, whenever we talk to taxpayers about changing the system, they fear moving to an income or sales tax based system, for fear they would end up paying more.

In fact, more often that not, the number one concern we hear from ratepayers is that they never know how much their property tax bill is going to rise each year.

Its not that we think these property tax caps are perfect, but they are one way to ensure that the average taxpayer, particularly seniors who are on fixed pension incomes are protected from major changes in home assessments. Often these particularly affect those on coastal or urban areas.

Along with the cap we also support ending the assessment process by implementing a sales-price based assessment is founded on a simple principle: the price paid for a property is its value.

A property's assessed value could be re-adjusted by any change in inflation only at time of sale. If a property does not change hands in a given year, its assessed value is adjusted by an amount no greater than the rate of inflation. This adjustment does not eliminate the tendency for newly acquired properties to pay more in tax; it merely moderates it and makes predictable the amount of property tax the new owner will have to pay. This has the additional benefit of creating defined property tax expectations when a property changes hands.

No matter what happens with taxes, any tax that continues on assessment is frankly confusing and most taxpayers don’t know how or why their assessments are changing.

And if I can single out Nova Scotia for a moment, the process here is even move convoluted. Because of the property valuation corporation.

Putting municipalities in charge of home assessments when they have an interest in what those assessments turn out to be, reduces both the transparency, and simply makes people more suspicious of the assessment process.

Cities should remove themselves from the assessment process all together, and turn the function to a truly independent organization with a board of regular citizens, rather than politicians.

Lets work together to clean up this issue with assessments. Only through a property tax cap, and a transparent assessment process will taxpayers have faith in the property tax process.

Third principal, empower rate payers through more accountable government.

Should a local government or its citizens want to spend more than the revenue increase created by the annual adjustment would allow for, either council could put a referendum to voters, or citizens could gather signatures to press a referendum.

To pass, the referendum would require 50% plus 1 of votes cast. Referendums could be held on an annual basis or coincide with local council elections. Conversely, citizens could also petition for a property tax reduction.

Laws establishing rules for local citizen-initiated referendum, including signature thresholds, collection times, and verification rules would have to be established by provincial statute. However, there is precedence in Alberta for citizens' initiative at the local level. In that province, 10% of registered municipal voters are required to sign a petition within 60 days, to force a public vote on an issue.

The CTF proposal brings together the notions of a tax limitation and direct democracy. These two elements must be an integral part of any property tax reform in Canada.

In conclusion let me say that I believe that all levels of government need to earn back the trust of the average voter.

Certainly the voters who I speak too as I continue our Federations work tell me that they are tired of seeing taxes go up, without ever seeing an improvement in service. They want to have a voice again in what is happening with their municipal government, especially since so many of the issues have such a direct impact on their daily lives.

What’s wrong with giving them move a voice, and what is wrong with working to ensure that they can keep more of their hard earned dollars.

During the debates over confederation here in the Maritimes in 1867, opponents of confederation won a plurality of the seats in the subsequent election and in Newfoundland of course the vote there was very close.

Opponents of confederation said that Maritimes inclusion into Canada would mean higher taxes, restrictive trade, bigger government and less services.

They made the argument that Maritimes and later Newfoundland had a unique culture and heritage that was based on personal responsibility and freedom from government.

While Canada has undoubtedly treated the region well, we should consider again those values that were supported way back in 1867, and perhaps in some small way they would be a guide for us today.

Thank you for having me…