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Reid Southwick
Telegraph-Journal

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SAINT JOHN - The city could charge people from outlying areas for using municipal services with a range of potential taxes, private consultants say.

Residents from the suburbs who work in the city, or regularly travel here, could pay new sales, fuel and payroll taxes that would be levied by city hall, Harry Kitchen and Enid Slack suggest in a report.

Several council members have raised concerns that residents from the valley, Grand-Bay Westfield and farther flung areas regularly use Saint John's services, but don't pay for them.

Just last fall, council narrowly quashed a motion that would have asked the city solicitor to consider the legality of charging suburban residents $8 per day to drive on the city's roads, drink its water and use its bathrooms.

Kitchen and Slack, university researchers from Ontario with backgrounds in municipal finances, suggest there are alternative sources of revenue - but they would require changes in provincial legislation.

"It's been our impression from what we've done elsewhere that there is legally some merit in suggesting some alternative revenue sources for municipalities, primarily for cities in large urban areas, that currently aren't used very often in Canada," Kitchen told council this week.

"It gives this council an option to say we have access to more than one tax; we can decide, do we want to raise it here, do we want to raise it there?" said Kitchen, a professor at Trent University who specializes in local government revenues and expenditures.

Council voted this week to form a committee that will further consider new ways of generating revenue.

Councillor Donnie Snook said Wednesday the city must address what he said was an inequity in which residents from outlying communities benefit from services they don't pay for.

But Snook said the city must also be careful not to discourage non-residents from spending time here.

"We have to figure out a way to make those that are from outlying areas and benefiting from our services to contribute more," Snook said.

"We have got to sensibly strike a balance to make sure our approach is fair as possible and that it's an approach that is going to be beneficial and advantageous for us."

Slack and Kitchen estimate the city could reap an additional $10 million a year by collecting a one per cent sales tax. According to their plan, the province would administer the tax and add one percentage point to the provincial share of the harmonized sales tax levied in the city.

The consultants said the city could earn about $1.7 million annually by collecting a fuel tax of one cent per litre. They said many American cities levy fuel taxes, but Canadian cities don't.

Slack and Kitchen said in their report some provinces share fuel tax revenue with municipalities using different methods.

The British Columbia government, for example, provides the Greater Vancouver Transit Authority with revenues equal to 12 cents per litre in fuel tax collected in Metro Vancouver. The authority uses the revenues to cover the capital and operating costs of public transit and major roads in Metro Vancouver.

Slack and Kitchen also suggested the city could collect taxes from suburban residents by reaping local income tax revenues.

The consultants argued a local income tax would be difficult to implement and expensive to administer.

But they said the city could collect a percentage of the provincial share of income tax levied within the municipality. Should the province increase income tax in the city by one per cent, the city would receive $1.1 million a year and the provincial tax rate would increase by less than one tenth of one per cent, Kitchen said.

According to the report, Manitoba shares revenues from 4.15 per cent of provincial income taxes, both personal and corporate, with municipalities.

Councillor Bill Farren, who has pressed for additional taxes levied against people who work in Saint John but live outside the city, said he supported many of the consultants' proposal reforms.

Residents from outlying municipalities use up the city's costly infrastructure on their way to work and don't have to pay for upkeep or repairs, Farren said.