Halifax needs tax reform

Today we learn about city finances

By Matt Stickland

Ever since at least the year 2003, there have been warnings that Halifax’s car dependency was going to wreak havoc on city finances. Slowly but surely, those warnings are coming to fruition with higher property tax bills for declining municipal services. At their last meeting, council got a report from the city’s accountants about Halifax’s dire infrastructure deficit.

Back in 2003, the province wrote a report to the city saying car-centric planning cost too much and didn’t make back enough money to cover municipal services; things like transit, road maintenance and firefighting. Ten years later, to start addressing this issue the city’s Centre Plan started coming to fruition thanks to a council commissioned report from engineering company Stantec. Stantec’s report explained that it cost the city twice as much to provide services to suburban homes than to urban ones, a trend that holds true today. And in that 2013 report, they found that most of the growth in the HRM for the past few decades had been distending the suburbs. As the 2003 and 2013 reports both outline, rampant suburban growth, left unmitigated for two decades, is a massive financial liability. The high cost of servicing these low-density communities and the meagre tax dollars they bring in means they are losing the city money.

This discrepancy between revenue and expenses in Halifax’s suburbs is made worse by the belief that growth pays for growth because things like development fees or development agreements have been used to make developers build basic infrastructure like roads, parks or fire hydrants. But not only do development fees drive up the cost of housing, at some point all of this new infrastructure will need to be maintained and there will be no development fees to pay for that maintenance. On top of that, when everything is built and people move in, they need more than just fire hydrants, they need fire stations and other capital infrastructure. This year, Halifax’s capital infrastructure budget is just over $300 million with about $100 million going towards expanding city services (e.g. building a new fire station) and $200 million going toward “asset renewal” (e.g. fixing/replacing an old fire station). And over the next four years Halifax is going to spend over $2 billion ($2,000 million) on capital expenses.