I attended a workshop about financing city infrastructure that was chaired by Hazel McCallion, the 89-year-old mayor of Mississauga. Afterward, I spoke to her briefly. One of the things she talked about was how the federal and provincial governments benefit from the infrastructure funding they provide. Cities may wind up with new facilities, but higher levels of government get to collect tax revenue off them over the long term. Here’s how Mayor McCallion explains it….
When a municipality awards a contract to a company to build something, the employees pay income tax, sales tax, you name it. Every project that is put forward, we don’t get property tax from it because we’re building our own facilities and we don’t pay taxes to ourselves. But every project that is awarded under the stimulus program, the provincial and federal government benefit for all the many taxes that they collect that we don’t collect.
And here’s the audio from our interview….