2015 the global community committed itself to an ambitious programme of reform. Achieving the Sustainable Development Goals and implementing the resolutions of the Paris climate conference require that great efforts are made – including those of a financial nature. Many states will have to ensure that untapped or barely used sources of income are developed. Sub-national units such as provinces, departments, districts, and cities will play an increasing role in the mobilisation of public revenues. They are also in the forefront with regard to realisation of the global reform agenda, as many of the objectives concern classic areas of activity of local government: schools, basic medical care, local road construction, public transport, construction of social housing, the supply of drinking water and disposal of waste water, refuse collection etc. These services are already the responsibility or co-responsibility of subnational units. The mobilisation of revenues at sub-national level is therefore not only a financial necessity, it is also prudent from a development policy perspective: if the users and funders of a good match, there is a greater likelihood that the preferences of citizens will be observed and the use of funds monitored. In addition, local taxes and levies are often paid by a broad circle of citizens and companies. This serves to strengthen the relationship between governments and the governed. One thing should be clear in this: although many countries will exploit the scope for collecting local taxes and levies in the future, this potential is nevertheless limited. Many sub-national units will remain dependent on transfer payments from the central state. Cities, districts and the middle tier cannot solve the funding problem of the states on their own. However, they can help to place the provision of public services on a broader foundation of legitimacy and, in co-operation with the national level – for example via the exchange of information – improve fiscal policy as a whole. Consequently, they also contribute to overcoming problems of fragile statehood.

This document is the result of the discussions held during the 2016 Uraía Workshop which took place in Nicosia, Cyprus on April 19 and 20th, 2016. It is a working paper made in collaboration with the participants who attended the workshop including representatives of local governments, city networks, service and technology providers, civil society, international organizations and research institutes from all around the world. It gathers general recommendations on the use of SMART technologies to improve municipal finances and it is based on the participants’ experiences.

This study presents the main organisational and financial indicators related to subnational governments in 101 federal and unitary countries worldwide. It provides, through country profiles and a synthesis analysis, qualitative information on subnational government structure and responsibilities, as well as macro financial data assessing subnational government spending, investment, revenue and debt. Financial indicators of the country profiles are accompanied by short comments on the structure of expenditure and investment (by type and economic function), revenue (tax, grants, user fees and property income, etc.) and the main characteristics of the debt and fiscal rules.

On the afternoon and evening of July 8, 2013, heavy rains flooded parts of Mississauga, disrupting the lives of residents and damaging public and private property. The stormwater management system in the city proved inadequate to meet the levels of runoff experienced on that day. Mississauga is not the only city in this situation. In 2007, the Federation of Canadian Municipalities estimated that the stormwater management infrastructure deficit across Canada stood at approximately $31 billion. The Ontario Ministry of Public Infrastructure Renewal (now the Ministry of Economic Development, Employment and Infrastructure) estimated in 2005 that between 2005 and 2020, water infrastructure needs in the province would require investments of $28 billion for capital renewals, $12.4 billion to reduce asset and project backlogs, and $10.1 billion for growth. Stormwater management infrastructure controls the quality and quantity of stormwater that reaches water bodies and protects the health, safety, and sustainability of public and natural environments. The July 8 storm highlighted the need to direct significant amounts of financial and political capital towards municipal infrastructure management. This paper evaluates the financial tools available to fund stormwater infrastructure (property taxes, development charges or cash-in-lieu payments, grants, borrowing, and user charges), and proposes user charges as the most appropriate. User charges are fees earmarked to specific projects or services. They are based on a benefits-received principle, and are considered a fair form of revenue, because the beneficiaries of a service are directly charged for their consumption of that service. Further, user charges are a dedicated and stable funding source based on clear objectives related to the city’s stormwater infrastructure needs. None of the alternative funding tools offers the same combination of stable and predictable revenues and fair pricing. The paper also describes how the City of Mississauga is currently implementing a user charge dedicated to stormwater management, with billing introduced in early 2016.

This paper looks at the City of Toronto’s 2008 Land Transfer Tax (LTT) and its impact on housing sales in the Greater Toronto Area (GTA). Housing sales declined in Toronto in 2008 where the LTT was implemented, but sales also declined in Toronto’s suburbs and in other cities, such as Vancouver and Montreal, where the LTT shouldn’t have had any influence. It was not just the LTT, but the recession in 2008 that contributed to housing market declines across Canada and beyond. This paper builds on previous research by including condominiums in addition to single-family homes in the analysis, accounting for the additional influence of the recession, and comparing the decline in sales in Toronto to the relative increase in sales in the suburbs.