Canadian municipalities have done a terrific job of overcoming a multitude of challenges during the past two years. It has been a time of dreadful community health problems—not just the COVID strains, but the resulting problems the pandemic has caused:

• high family stress levels;
• children's mental health issues because of no school, remote schooling, and a lack of socialization with their friends;
• disruptions to the thriving downtown core of a city where office workers were absent for much of the past year or two;
• the despair many people (families) have endured during this time of lock-downs and few social activities with family and friends;
• the horrific financial impact that so many businesses have suffered—restaurants, bars, coffee shops, retail outlets, and so many more. Many of these, especially family and small businesses, will never re-open;
• the general despair, anger and disruption that people and families have endured in their lives and family interactions.

Municipalities and governments across the country have made unprecedented investments in wage and business support programs; many of them have been quite successful and helped to prop-up a failing situation. There has been abuse, of course; some people are simply liars and cheats. Nevertheless, governments have stepped up with hundreds of billions of dollars sent to Canadians. These programs will have to end sometime.

Local governments have survived this tumult. It has not been easy. But it has also transformed some aspects of a city hall's operations—working from home, more on-line ways for taxpayers to do business with the municipality, learning on the fly how to modify service levels, and so on. Some of these new elements will last beyond the pandemic's lifespan.

Looking ahead to an uncertain 2022 as the fourth wave of the pandemic is hitting Canada sharply, there are a number of key issues that local governments will have to deal with. In this first of a two-part column, the top issue remains the economy. Without a dynamic, growing tax base cities are hamstrung in their ability to invest back into their community. A vibrant local economy impacts jobs, the local economic climate, entrepreneurism, dynamic downtowns and so on.

Local economies are impacted by a number of factors that in 2022 will remain crucial to Canadian municipal success:

• how will the global economy respond to yet another COVID wave? While several parts of the Canadian economy are humming, other sectors are not. Hiring staff is a near-universal problem.
   
• how/when/and by how much will downtowns be reinvigorated? It has not only been the office workers who disappeared, but so many secondary and tertiary businesses (coffee shops, retail stores, etc) that have hollowed-out downtown cores. This has been a burden on city halls and has impacted local tax bases, harmed transit systems and changed local shopping patterns.
• how do communities diversify their economies? Canada has talked about this as a goal for many years but disappointingly little has been accomplished. Towns and cities are realizing they must have their own strategies and adapt to the gig-economy. That means providing sufficient affordable and reliable electricity, broadband, an attractive and creative city, and a Gen-Z-friendly environment. They must also foster a culture of local entrepreneurism.
   
• as a corollary to the previous point, cities are better understanding that they must compete for talent. Smart people and leaders are in high demand and Canadian communities are truly in a global battle for the best and brightest.
   
• shifting global economic and political trends are, increasingly, impacting local markets. Much of this is led by the growing protectionism by certain governments, including the United States. Despite our long history of cooperation, the USA is focused inwardly more and more. The implications for many Canadian cities are considerable.
   
• the Cost of Living index has been soaring in recent months. It shows little sign of abating in the immediate future, although the Bank of Canada is obviously betting that it will mitigate later in 2022. In the meantime families are suffering because of much higher prices at the grocery store, the gas station and so on. This will pressure local governments to minimize property tax increases. And, if interest rates jump, the cost of borrowing for families and governments will increase sharply, impacting cash flow for individuals and elected bodies. That will ripple through an already fragile economy.

I offer one fresh idea, perhaps for FCM to promote: the US Federal Bureau of Economic Analysis provides city/county data on each region's Gross Domestic Product. In other words, cities can track their GDP from year to year, which can offer valuable information about various sectors in the local economy. My presumption is that Statistics Canada or some other agency must be gathering similar information to accumulate Canada's GDP, but I am unaware if they distribute to a city. If not, it would be a useful tool for local Ec Dev leaders.

As an example, Tampa Bay saw its GDP fall by $2.4B in 2020. The data provided showed it was primarily tourist/hospitality declines, but other sectors increased. Any such data would be very useful for Canadian cities.

Tomorrow in the second part of this look-ahead, we explore the other major issues facing Canadian municipalities, including Climate Change, Housing, and Infrastructure.