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Saturday, 23rd December 2006

A State of Disrepair: How to Fix the Financing of Municipal Infrastructure in Canada

A State of Disrepair: How to Fix the Financing of Municipal Infrastructure in Canada (PDF; 202 KB)
Source: C.D. Howe Institute

The underlying principle of benefits received is straightforward: those who benefit from local infrastructure and the services it provides should pay for it. Other recommendations for policymakers and city managers: use multi-year capital budgets and dedicated fund accounts to plan longer-term projects. Municipalities should also take advantage of innovative approaches to infrastructure finance, such as a dedicated municipal fuel tax, parking lot taxes and private-public partnerships.
While the discussion in this paper is constructively critical of the current practices for financing much of our local infrastructure, dramatic improvements are possible. Among them, moving to a benefits-based model, where feasible, is particularly important, because it satisfies five key principles: economic (allocative) efficiency; accountability; transparency; fairness; and ease of
administration. Such improvements may prove central to repairing the ability of cities to deliver the services and quality of life their citizens expect and deserve.



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