Big city spenders need to change conversation

May 2013
Nina Gormanns, Research Analyst

Spending by Canada’s three largest cities – Toronto, Montreal and Vancouver – has grown by 3 to 8 times the rate of population growth over the past 12 years, yet cities are talking about new taxes. CFIB is calling on municipal leaders to change the conversation from one focused on raising more revenue, to one that addresses overspending.

CFIB’s Big City Spenders report was released in advance of the 2013 meeting of the Federation of Canadian Municipalities (FCM) in Vancouver. The report shows municipal spending has increased by 55 per cent in Canada overall, while population has only grown by 12 per cent. The increases in spending are largely driven by public sector wages and benefits which consume between 52 to 67 per cent of local government operating spending in the three big cities.

From 2000 to 2011, city staff in all Canadian municipalities increased by 25 per cent - more than double population growth. Given that wages and benefit packages in Canadian municipalities are more than one-third higher than comparable occupations in the private sector, this is a major driving force behind spending growth.