What Are We Counting On

What Are We Counting On?

Introduction

The City of Ottawa is a fine place to live and a great place to raise a family. Ottawa has a way of growing on people despite the cold weather and its reputation as a government town—people leave but many of them return—it’s as if the City puts a rubber band on them when they depart.

Yet the City has been going through some serious transitions—there was a significant downsizing of the Civil Service under the first Jean Chrétien government in the early to mid 1990s and then there was the tech meltdown which began in 2001 and continues to this day. Tourism is also stalled, in part, because of the September 11^th and SARS crises and, more recently, because of the rise in the Canada dollar versus its US counterpart. Americans are just not visiting with the same frequency.

The Ottawa economy has largely depended for many decades on Government, tech and tourism employment. Other sectors such as education and construction have been of somewhat lesser importance and manufacturing and finance are smaller still. Looking to the future, we must raise the question on behalf of the citizens of Ottawa and its leadership—what (exactly) are we counting on to bolster growth and sustain our way of life in the coming decades?

Why It Matters

We ask this question because we think that the debate that is currently engulfing our elected Municipal officials and staff seems to us incomplete. The debate has so far been confined to questions like:

¨ How do we cut the budget?

¨ Which services should be cut?

¨ How much should we or can we raise taxes?

¨ Can we ask staff to work harder to maintain existing service levels?

This series of questions can only lead to a ‘death spiral’. Just look at what some cities in the US experienced from the mid 1960s onwards. Think for a minute—what happens to a city that raises taxes and cuts services? It hollows out—people leave for other places, often those just outside their jurisdictional boundaries.

Think it can’t happen in Ottawa? It already is. Development Charges in Ottawa (recently reduced somewhat by the City) are so high that residents are leaving for Arnprior, Brockville, Carleton Place and so on. And how does it help Ottawa if we can’t cut the grass, afford to maintain our roads and services and invest in important infrastructure or if we don’t have enough money to assist festivals and cultural activities or if we can’t nurture key industries and educate our children?

As our City degrades around us, so does our quality of life. If the City can’t afford to pick up litter, patch potholes, remove graffiti, cut the grass and so forth, then it shows a lack of respect for its own property. If you don’t respect your own property, why should others respect it? It is clear that cities that don’t maintain the ‘public room’ also suffer from greater incidence of crime and much lower rates of economic development (sometimes, a negative rate of growth results).

Now if we are going to grow our way out of our problems, we need to think hard about where our economic growth is going to come from.

At a minimum, we need to be more creative—cities in Ontario, much like most Canadian Universities and Colleges, are in a terrible squeeze.

Universities and Colleges can’t raise tuition without Provincial Government approval, which is rarely forthcoming. They have difficulty getting more Provincial Government funding or grants. Their costs for teaching staff and other outlays are going up each year. Demand for their services is skyrocketing. What can they do?

Some of them are putting a great deal more emphasis on initiatives like fund raising from alumni and donations from the public, more partnerships with the private sector, selling rights such as building naming rights, seeking research grants from both the public and private sectors, market-based pricing for some programs and many other new initiatives. They are getting creative.

It is clear that the old model of nearly exclusive reliance on Provincial funding and tuition doesn’t work in Canada any longer.

Cities face the same types of issues—tax rate increases are fiercely resisted by residents and businesses. Provincial grants are limited. Statutory requirements are large and consume a huge proportion of the City’s budget. Senior levels of government are reluctant to make tax room for municipalities. What can they do?

There are four main ways out of this trap:

¨ Grow your way out (increase revenues and grants).

¨ Set your priorities more carefully (focus on essentials).

¨ Re-engineer city processes (don’t work harder, work smarter).

¨ Harness the creativity, efficiency and capital of the private sector (more public private partnerships).