Transfers to Canada's cities falling billions short as a result of Americanizing Free Trade-related policies

by Traci Lawson

The cause of the budget crises and municipal infrastructure deficit confronting local governments in Canada is clear. Federal and provincial governments severely cut transfers to local governments starting in the mid-1990s. These cuts in transfers are directly associated with a "survival of the fittest" inspired economic public policy context under the North American Free Trade Agreement (NAFTA) with the United States

NAFTA inspired dysfunctional public administration has resulted in a funding shortfall that is now about $4 to $7 billion a year.

The solution is also very straightforward: The federal government needs to cancel NAFTA, that would free up the federal and provincial governments to restore their transfers to local governments. The alternative would be to keep NAFTA and watch Canada's cities decline to resemble the kind of economic disparity that is widespread in American cities.

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