Guest Commentary
By Nina Gormanns

Throughout the recent election campaign, the Federation of Canadian Municipalities (FCM) and big city mayors have been making the case for more federal handouts to cities.
Calgary Mayor Naheed Nenshi, for example, said that he is looking forward to working with the new government on transit, infrastructure and social housing. While new MPs are still unpacking, cities are already lining up, hat in hand, claiming that they have a revenue problem and need a bigger share of tax dollars.
But new research from the Canadian Federation of Independent Business(CFIB) shows that cities, large and small, have a spending problem, not a revenue problem. Reasonable city spending growth should be in the ballpark of inflation and population growth, accounting for increases in prices and people. Instead, cities have hiked their inflation-adjusted operating spending almost four times as much as population growth from 2003 to 2013.
This excess spending has cost each household in Canada $5,200 over the past decade. 
Altogether, Canadian cities overspent to the tune of over $68 billion. 
Had local governments better managed their finances, that money could have been invested in social housing, infrastructure and public transit, and saved for future projects. It could have been put towards other services that citizens and businesses need and expect, and helped drive our local communities' growth and prosperity.
But instead, cities wasted it.
Irresponsible city spending has direct consequences for homeowners and businesses locally through property tax increases. 
Even when the money is not collected locally, when federal or provincial governments give more money to cities, federal or provincial tax hikes come from the very same taxpayers' pockets. Regardless, residents and small business owners simply cannot afford it. City governments need to be more accountable for their spending to ensure good value-for-money in public services.
It is particularly concerning that half or more of a city's operating spending goes to employee wages and benefits that are overly generous: A municipal worker in Canada receives 22% more in wages and benefits than someone doing the same job in a private business. On top of that, local governments in many parts of the country have hired more than the private sector, further boosting their spending.
A storm is brewing and will undoubtedly propel spending further out of control unless governments take action now. 
It's time for city governments to stop crying poor and focus on spending restraint. 
They can start by ensuring that the wages and benefits of city staff are more sustainable, by better aligning them with the private sector.
And as tempting as it may be for the new federal government to come to the rescue, it should not do so unconditionally. Federal money should come with clear expectations for prudent financial management and planning coupled with more accountability. As taxpayers, we have a right to expect our governments to be responsible and respect the limits of what we can afford.

Nina Gormanns, is a research analyst at CFIB and co-author of the 8th edition of the BC Municipal Spending Watch.