Municipalities and Taxes

Larry Coté
Managing Director
January 9, 2025

Municipalities function similarly to businesses and are obligated to provide essential services to the public – their customer. One primary source of revenue is the annual assessed tax paid by residents. Additional revenue comes from fees for specific services such as garbage collection, parking, permits etc.

As Municipalities finalize their budgets each year, there seems to be ever increasing requests for additional funds, which in turn translates to residential tax and fee increases. It has become common practice for municipal taxes to increase annually, often rationalized by things like rising labour costs and inflation. Municipalities assert that these increases are necessary to meet higher expenses and necessary to continue providing the services expected by their citizens.

Experience with government processes at various levels has taught us that a considerable amount of the activities within these processes are inefficient or 'non- value' adding. In fact, some processes have been found to contain up to 90% non-value activities, throughout both administrative and operational processes. This is in no way the fault of staff, who in fact can most easily identify ‘waste’. They simply need to be coached on how to effectively analyze systems and make the improvements.

Given the significant inefficiencies within the current systems, there exists a real potential to reduce waste resulting in lowering the cost of providing services, all the while enhancing service quality. There are many examples of municipalities addressing inefficiencies and achieving improvements of 30% to 50% within months.

There hasn’t been a better time to reexamine budgets. Residents are experiencing financial strain. Municipalities could be a major part of easing this burden. With the appropriate knowledge on how to make changes effectively, they would be able to adopt a more realistic approach to calculating the precise dollars needed to provide services to their taxpayers.

As taxpayers (the customer), we must ask the question of our political leaders – Do taxes need to increase or are there ways to reduce costs while enhancing services, using alternative methods??

A must read:

KLEIN: Canada’s debt crisis: Trudeau, Kinew, and City Hall are driving us to the brink
Published Jan 09, 2025