There is a great interest in Canada, and especially in Ontario recently, on the topic of cities and their fiscal standing in our federal system.

For example, the federal government has developed a communities agenda, formerly the cities agenda, and has committed to a GST tax exemption on inputs, infrastructure spending, and transferring gas tax revenues to local governments.

The provincial government is also active in this area, with a $90 million grant and loan extension to the City of Toronto to help the city balance its most recent annual budget. The Smart Growth program, introduced by the former provincial government in the late 1990s, also advocates more public capital investment and compact development for cities.

The Toronto City Summit Alliance and the Toronto Board of Trade have been very active with a public campaign called Enough of Not Enough. These groups argue that some portion of Toronto's $9 billion in excess taxes should be recouped and spent on public transit, waterfront development, and social housing. The groups also want to establish new taxing authority for municipalities.

Finally, there is an active Canadian contribution to a worldwide debate on the costs and benefits of urbanization. The fiscal aspect of this debate centres on whether a government subsidy for urban development exists that encourages excessive suburbanization.