Municipalities in Canada are similar to provincial governments in a number of important respects. Their governing bodies are democratically elected; they have the power to tax and to legislate (bylaws, ordinances); they provide a wide range of public services and facilities; and they make public policy (eg, land-use planning).
Municipalities are unlike provincial governments as far as important aspects of constitutional status are concerned. The provinces derive their powers from the Constitution and hence their permanence and autonomous jurisdiction are guaranteed. Municipalities, on the other hand, draw their powers from provincial law, which can be changed by a majority vote of the legislature. These powers are usually set out in a Municipal Act which applies to all municipalities within one province.
Municipalities can usually exercise only those powers delegated to them by a provincial government. The province retains the right to change municipal boundaries, to abolish individual municipalities (as New Brunswick and Ontario have done), to alter municipal financial resources and to withdraw old powers or grant new ones. The province makes some powers mandatory and some permissive.
The autonomy of municipalities is severely restricted. For example, many municipal bylaws require provincial approval to become effective; municipal borrowings for capital projects are strictly controlled by the province's Department of Municipal Affairs or by a provincially appointed municipal board; many local planning decisions can be appealed to a provincial agency; and many local powers apply only to a shared provincial-municipal jurisdiction (eg, the environment). The limited autonomy of municipal governments raises questions about the democratic accountability of LOCAL GOVERNMENTS. They are accountable both to their own electorates and to provincial authorities, but in degrees that vary among provinces and even within some of them.
The relationship between municipalities and their respective provincial governments is not an easy one. Many municipal politicians are resentful about their lack of autonomy, and many provincial ministers and bureaucrats think of municipalities as just another interest group seeking to pressure the province into particular policy decisions. The special status of municipalities as governments elected on a universal franchise is well understood by ministers and officials of Municipal Affairs departments, but their colleagues in other departments or in Cabinet have their own vested interests in budgetary and jurisdictional decisions, which lead them to minimize the importance of municipal affairs.
Municipalities have come together in voluntary associations in their attempt to support the municipal interest in provincial policymaking. Some provinces have one such association and others have two, usually one urban and one rural. A major concern of these associations has been to secure a better financial arrangement for municipalities. Local revenue is mainly derived from property taxes and provincial grants. These grants are on average 80% conditional. The conditions sometimes induce municipalities to make choices that meet provincial policy goals at the expense of local goals. The property tax is generally seen as the most regressive of all the major tax fields in the country. Further, it does not grow with the economy or inflation as do sales and income taxes.
In some provinces government downloading of functions and financial burdens to municipalities became rampant in the 1990s. In Nova Scotia and Ontario this has been followed by restructuring. Such arbitrary change reflects the triumph of concepts of efficiency over those of citizen participation and direct access to elected councillors.