Mayors not backing sales tax idea - yet

Ottawa Mayor Jim Watson during a Ottawa city council meeting Wednesday Oct 10, 2012. (QMI...

Ottawa Mayor Jim Watson during a Ottawa city council meeting Wednesday Oct 10, 2012. (QMI Agency/TONY CALDWELL)

DANIEL PROUSSALIDIS, Parliamentary Bureau

, Last Updated: 7:59 PM ET

OTTAWA - Cities may yet ask for the power to impose a new 1% municipal sales tax, but it's not formally on their agenda yet.

The Federation of Canadian Municipalities (FCM) says a so-called penny tax could pop up in the future.

"There's all kinds of ideas that always get floated and we recognize that the fiscal imbalance really is an issue that we'll need to address," said FCM president Karen Leibovici. "How that will get addressed, it's hard to say at this point in time."

Individual mayors have varying positions.

"No, that's not on," said Ottawa Mayor Jim Watson, arguing the idea was fashionable before the federal government reduced the GST to 5%.

Calgary's Naheed Nenshi notes that Alberta has no provincial sales tax, but stops short of supporting a municipal one.

"I'm not particularly in favour of it or against it," he said in Ottawa.

Nenshi says the idea is attractive for cities that see many non-residents utilize city services.

The FCM has asked the federal government go back to spending on roads, bridges and transit systems the way it did in the 1950s and '60s.

Leibovici called on the feds to give cities almost $6 billion a year for infrastructure for the next two decades - $2.5 billion more than cities get right now.

Infrastructure Minister Denis Lebel says he'll consider it.

"Our new plan will recognize the need for investments in infrastructure while ensuring affordability and respecting taxpayers' ability to pay, in this time of restraint," he said in a statement.


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