As the 2025 property tax bills are finalized by city councils across Canada, many local taxpayers are dismayed by another year of big increases. Reports of cities and towns coming in at 5-10% increases are common.

For many years, I have been preaching the merits of allowing municipalities to charge a local sales tax. It is a consumption tax, which most analysts agree is a much fairer system. The property tax as the primary source of funding is neither fair nor adequate for the 21^st century needs of running and growing Canadian municipalities. The tax is opaque and inefficient.

Here is a real-life example of how one mid-sized American municipality charges and then invests its local sales tax.

Tampa, Florida has about 400,000 people. It is in Hillsborough County, which has 1.4 million residents.

Since 1996, the county has collected a ½ cent sales tax, called the Community Investment Tax (CIT). The tax was approved by voters in 1996 and was just recently renewed by voters for another 15 years.

In its first thirty years, the tax raised 2.77 billion dollars.

During that time, the CIT funded or partially paid for 784 capital projects across the county.

The fund paid for more than 100 road projects, major league facilities such as Raymond James Stadium (Buccaneers) and Amalie Arena (Lightning), more than 200 parks, 24 fire stations, and a number of other infrastructure projects.

Revenue from the new iteration of the CIT will be used for projects ranging from new schools, major transportation projects such as road enhancements, recreation and sports fields, libraries, separating storm and sanitary sewers, bridges, and other critical public works across the county.

What is remarkable about the tax is that it is relatively painless. Visitors as well as residents pay it and never think about it. It is a modest charge, but over time the fund grows dramatically. Having it as a county tax eliminates one municipality charging a local sales tax and an adjacent one not, to the distress of local merchants. Finally, consumption taxes are self-limiting; people choose how much they pay by how much they spend.

Canada certainly has a different system of local government than in the US, which has granted significant rights to state and local governments. Municipalities have greater obligations in the US, but also greater taxing powers. In addition, they receive substantial funding from state and federal governments.

As Canada's municipalities continue to be strangled by the 19^th century system of governance under which we exist, it is increasingly apparent that Canada is out of step with other western democracies in how our cities and towns are funded and governed. The simplest system would be for provinces (and, arguably, the federal government as well) to collect and distribute 1% of the PST to municipalities. (For those areas that have no provincial sales tax, perhaps it gets linked to the federal sales tax that is collected in the province).

Canada's municipalities are mature, competent orders of government. It is past time for them to be given the tools and authority to move forward in the 21^st century.