According to a new report by the Fraser Institute, per-capita spending by Canadian municipalities has risen to near-record levels.
The report, titled “The Expanding Finances of Local Governments in Canada,” exposes that municipal spending rose by 25.2 per cent (adjusted for inflation) between 2000 and 2023, peaking at $5,974 per person in 2021 before slightly declining to $5,851 in 2023.
While municipal governments represent the smallest share of total public spending in Canada, the study shows that their revenue and expenditures have still grown faster than population and inflation combined.
From 1990 to 2023, real per-capita municipal revenue rose by 32.7 per cent and expenditures by 30 per cent.
“Despite claims from municipal policymakers about their dire financial positions, Canadians should understand the true state of finances at city hall so they can decide whether they’re getting good value for their money,” said Jake Fuss, director of fiscal studies at the Fraser Institute.
The report, authored by senior policy analyst Austin Thompson, also finds that municipal revenue, largely funded through property taxes and transfers from provincial and federal governments, increased by 33.7 per cent per person since 2000, after adjusting for inflation.
Between 2008 and 2023, municipal governments recorded above-inflation increases in their annual operating surpluses, contributing to an 88.1 per cent inflation-adjusted rise in their overall net worth.
“Given record-high spending in municipalities across Canada, residents should consider whether or not crime, homelessness, public transit and other services have actually improved,” said Thompson.
Ontario boasted the highest per-capita municipal revenue among the provinces in 2023 at $4,156.
While the municipal share of total government revenue and expenditures has declined in recent years, especially after the COVID-19 pandemic, local governments still accounted for 11.1 per cent of all revenue and 18.6 per cent of all spending in 2023.
