"The Mayor has never said he is in favour of municipalities being able to levy their own sales or income taxes," spokesman John Crupi said, adding that the Chiarelli's position on the issue has been misrepresented by the media.
The controversy was raised on Tuesday when the Canadian Federation of Independent Business released a survey entitled City Limits.
The report, which was based on a survey of CFIB members, said that the mayors of Canada's major cities had asked for the right to impose municipal sales and income taxes to fill the funding gap from the provincial and federal governments. In a statement released Wednesday, the FCM denied the claim.
On Wednesday, Chiarelli expressed his frustration that growing urban centres such as Ottawa are in dire need of dollars to fund infrastructure growth, but are receiving little or no help from the higher levels of government. Crupi said his statements were wrongfully interpreted as favouring the idea of new tax powers.
What Chiarelli and his counterparts throughout Ontario want to do is sit down and work out a revenue sharing plan that would leave more of the existing tax money raised from municipalities in municipal coffers, Crupi said.
The area that Chiarelli is interested in is gasoline taxes. In many urban centres outside of Ontario provincial governments share some of their existing taxes on gasoline with the city in which the gas was sold.
As an example, Crupi cited Montreal, where 1.5 cents on the litre is given back to the city. The province also gives back $30 per licence of the fee charged for renewing automobile licenses. The money is used to fund Montreal's Metro system.
Similar arrangements are found out west. Calgary and Edmonton get five cents a litre. In Victoria it's 2.5 cents.
"We want some of the flexibility that other provinces" offer their municipalities, Crupi said.
According to Statistics Canada, over the past five years federal revenues increased 33 per cent, provincial revenues by 26 per cent and municipal revenues by only 7.7 per cent. Meanwhile, higher levels of government have unloaded a growing number of responsibilities onto local governments and reduced transfer payments. During the five-year period, provincial transfers dropped 20 per cent, while federal transfers were slashed 62 per cent.
