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The pandemic has exposed strengths and vulnerabilities in Canada’s social and economic systems—and our intergovernmental systems as well. Canada’s recovery needs to boost our resilience on all fronts, including the resilience of the federal-municipal partnership.

Municipalities own 62 percent of Canada’s infrastructure, deliver vital services, and help achieve federal objectives—social, economic and environmental. Yet they’re rarely at the table when other governments discuss national challenges. For operating revenue, they still rely on user fees, and property taxes that represent just 10 cents of Canada’s tax dollar—and cannot run deficits. What’s more, the pandemic has accelerated a transition to e-commerce, telework and digitization that will continue to erode land-based fiscal tools like property taxes.

On the road ahead, we are calling for federal leadership on modernizing municipalities’ tools and authorities, to better reflect their role in people’s lives and the national economy. And as we all move towards recovery, local leaders must be at the table with local expertise that will make every dollar count and drive results for Canadians.

As a start, we are recommending intergovernmental working groups on urgent national priorities—from housing affordability to reaching net-zero emissions. Stronger coordination will be key to advancing the Truth and Reconciliation Commission’s call to action. And fundamentally, FCM is ready to bring a frontline lens on equity, anti-racism and systemic oppression to our intergovernmental collaboration.

Federal-municipal engagement

  • Formalize federal-municipal collaboration by (a) establishing political-level working groups on key priorities, including housing affordability, pathways to net zero, digital inclusion and mental health; and (b) engaging municipalities in federal-provincial/territorial processes at the administrative and technical level where policy and operational issues are discussed.
  • Lead on place-based approaches to local and regional challenges—such as post-COVID downtown renewal, neighbourhood-level revitalization, economic transition and regional economic development—by leveraging innovative tripartite agreements, including the Urban Development Agreement model.
  • Commit to a dialogue with FCM on municipal resilience, including federal leadership required to modernize municipal finances and authorities over the long term, to align with local governments’ contemporary role in Canadians’ daily lives and national economy.
  • Advance the Truth and Reconciliation Commission’s Calls to Action by deepening engagement and coordination with all orders of government, to redress the legacy of residential schools and move forward on reconciliation between Indigenous and non-Indigenous people.
  • Engage Western Canadian municipal leaders on place-based economic development and pathways to net-zero emissions, while continuing investments in addressing abandoned oil and gas wells, trade infrastructure, economic diversification and energy sector transformation. Developing national utility corridors is one example of regulatory innovation to help get resources to market.
  • Elevate rural communities federally by working with FCM and municipal leaders to ensure a rural lens is applied to federal policy development and program design—better empowering local leaders to succeed in the context of their unique financial, administrative, geographic and demographic realities.