The premise that our national economic future is inextricably
intertwined with that of our urban regions should be self-evident. In
this century, city-states are where it's at. But this Martin-esque
pattern of calling for a national debate has become a little tiresome.

To start with, this debate has been underway for the better part of four
years. Moreover, Martin has called for national debates in the past,
most notably in successive economic statements about the role of
government in the post-deficit era.
Yet this debate never transpired. Instead, Prime Minister Chretien and
crew proceeded with their own agenda.

If the proverbial man from Mars came to Canada, he might rightly
conclude that the role of the Canadian government is routinely present
suspect budgets, overtax citizens by $10 billion annually, blow $4
billion on corporate welfare each year, blatantly ignore Parliament's
servants like the Auditor General and Information Commissioner and drop
a cool $100 million on unneeded executive jets on the last day of the
fiscal year.

Given this, the pundits may wish to ask if Mr. Martin is sincere, or if
his newfound love of cities is more the stuff of political leadership
posturing?

In a report this week, the TD Bank recommended municipalities be granted
additional taxation powers to help pay for improvements in social
housing, water systems, sewers, roads and public transit systems. The
bank's report is well researched and direct in its conclusions: Cities
need a new deal and new revenue sources to meet their infrastructure needs.

The most recent census shows that over 60% of us live in Canada's 27
largest census metropolitan areas (CMAs), while well over 80% of us live
in areas with a population of 10,000 or more. That we are an urban
nation is beyond question.

So to is the revenue dilemma with which local governments must contend.
While the numbers may differ somewhat among the provinces, on average
65% of your total tax paid goes to Ottawa, the province collects another
30% and the last 5% finds its way to city hall.

This small amount primarily consists of property taxes. Property taxes
are already too high for homeowners, they unfairly penalize commercial
operations and the inequities that they foist upon owners of
mutli-residential units are obscene.

Funding cities presents a bit of a constitutional problem. Cities are
legal creatures of the provinces so any moves by Ottawa to intervene
will be interpreted as another federal incursion by the provincial
governments.

However, the feds can make the case that the vibrancy of the economic
union is dependent on thriving cities thus providing some wiggle room
for action. This brings us to some principles to be followed as we move
toward accepting cities as an equal - and not junior - order of
government alongside the other two.

First, it is up to city mayors to foster the political climate to allow
for federal-provincial cooperation (as opposed to constitutional and
jurisdictional squabbling) in any solutions proposed.

Second, any transfers of funds (ideally from Ottawa's shameless
pillaging of $5 billion annually at the gas pumps) for cities'
infrastructure projects must be revenue neutral. Ceding of tax room
through a tax point transfer scheme is one idea to be considered, but
the combined fed-prov-city tax burden cannot increase.

Finally, city governments must get their own acts together in rooting
out wasteful spending by setting funding priorities, embracing more
public-private partnerships and yes, privatizing or contracting out
non-core services.