Hamilton is the most frugal municipality in Southern Ontario


Published August 25, 2022 at 3:07 pm

Hamilton was the most tightfisted municipality in Southern Ontario when it came to loosening the public purse strings during the decade prior to the COVID-19 pandemic, a new study reveals.

Depending on one’s point of view, that means a skein of mayors and councillors were either thrifty whilst keeping tax increases modest — or perphaps played hot potato on protecting public goods and infrastructure in a climate-vulnerable city. The Fraser Institute, which is conservative-leaning, has released a report that compares per-person municipal spending revenue across 26 communities in the Greater Toronto and Hamilton Area.

The period they covered is from 2009 till ’19, which was the last year without COVID-19 health protections and emergency pandemic spending. The last year was also marked by Hamilton declaring a climate emergency, which led to the city adopting a climate action strategy two weeks ago.

On average, per-person municipal spending across the GTHA increased 9.6 per cent over that time. When weighted by population, it went up by 3.1%. (All figures were adjusted for inflation, which was much lower at that time than so far in 2022.)

But Hamilton had the biggest, and lone double-digit percentage drop, with a decline of 11.2 per cent. The only other centres that showed are Milton (−3.8%), Caledon (−0.9%) and Toronto (−0.8%). Spending per person in Hamilton was $3,108, which is under the Ontario-wide average.

“Municipal governments play an important role in the lives of Ontarians by providing key services and collecting taxes and fees,” is the first main conclusion of the report, which is coauthored by econonists Garreth Bloor, Nathaniel Li and Joel Emes.

Mississauga (17.1) and Brampton (16.3), which are similar to Hamilton in population size, each had sizable double-digit increases.

Hamilton’s trendline for growth in revenue also detours away from what has been happening in the region.

The municipal average for growth in revenue was 16.3 per cent, as cities and regions adjusted to population demographics that are both diversifying and greying. When weighted by population, it worked out to 8.4%.

Hamilton, though, is in the top bottom five for growth in revenue, with a 1.2-per-cent decrease. Using constant dollars, the city went from revenues of $3,632 in 2009 (eighth) to $3,589 in ’19 (18th).

The authors called that an improvement, noting only Ajax and Scugog slid farther down the figurative ladder.

“Five municipalities moved down the rankings as a result of relatively lower spending per person when compared to their peers,” they write. “Ajax improved by 14 positions, followed by Scugog by 11 and Hamilton by 10.”

Ajax had the second-largest revenue decline, with a 6.9 decrease moving it from sixth to 20th. Scucog, at minus-2.1, moved from 12th to 23rd.

Halton Hills had the biggest revenue decline over the period studied, at 7.9. But it was already 21st back in 2009.

The top eight communities in revenue growth were all in York Region. Mississauga was also ninth with an 18.2-per-cent increase. But it ranks 16th in revenue per person at $3,600, two spots above Hamilton.

The report comes out two months less a day before municipal elections on Oct. 24. Counting the mayoralty, Hamilton will have seven new elected representatives on the 16-member city council, with wards 4, 5, 11, 12, 14 and 15 having no incumbent in the race.

Future councils, and by extension Hamilton residents, will also face a reality that a dollar in 2023 or ’24 will not stretch as far as it did in, say, ’13 or ’14. That will come while the city faces an infrastructure deficit and a need to improve climate adaptation.

Presently, Canada is experiencing a 7.6 inflation rate. The rate of 5.1 in January was the first above 5 per cent for the first time since the early 1990s recession.

During the years studied by the Fraser Institute in the report, the highest inflation rate Canada had in any month was 3.3 in May 2011.

The entire 20-page report is viewable at fraserinstitute.org.

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