By John Francis
In 1992, American presidential wannabe Ross Perot said that if ratified, the NAFTA pact would result in the “giant sucking sound” of money leaving the United States and going to Mexico. It didn’t get him elected; he came a distant third behind Bill Clinton, who quickly ratified NAFTA. Ironically, the phrase he coined is now Perot’s main claim to fame.
But if you live in Northern Bruce Peninsula, the “giant sucking sound” image is useful in understanding our local economy. Thanks, Mr Perot.
Tourism generates a lot of money in our community. Visitors spend millions of dollars here on meals, rooms, boat tours and merchandise. Every dollar of that generates 8% in sales tax for Ontario and 5% for the feds. (That’s in addition to the federal and provincial income and corporate taxes that the businesses and tourism employees pay.)
But not one cent of that tourism revenue ends up in municipal coffers.
The purpose of taxation is to provide money for governments to use to offer services back to the taxpayers.
Are we getting services for tourism that balance the 13% in taxes the senior levels of government are taking?
Let’s go with “No”.
The services associated with that tourism are provided by the taxpayers of Northern Bruce Peninsula. We pick up their garbage and pay to put it in landfill; we rescue them when they fall off cliffs or get lost in the woods; we widen and pave the roads to withstand their vehicular traffic; we hire bylaw enforcement people to keep them from parking everywhere, camping everywhere and setting our peninsula on fire.
Those are expensive services. In the last few years, paid parking and the Municipal Accommodation Tax have been put in place to generate a cash flow from visitors. These are welcome additions to property tax revenues, but they won’t come close to covering the costs of water and sewer systems in Tobermory and Ferndale and sewers for Lion’s Head. And the more visitors we have, the more urgently those water and sewer systems are needed.
The biggest single attractant for tourists is the national parks. As Councillor Smokey Golden points out at every opportunity, Parks Canada has strict capacity limits. When the Park reaches its capacity, the overflow gets dumped on us and we have to provide washrooms, parking, picnic tables, drinking water and garbage services for however many people they turn away.
Parks Canada pays $750,000 in PILT (Payments In Lieu of Taxes) to MNBP. Without those PILT payments, our tax rate would have to go up by 12.7%. (For a detailed explanation about why the PILT is so generous on National Park lands, see my column from June 12, 2019. The easiest way to find it is to go to brucepeninsulapress.com and search “Brad Davis”.)
Opponents of National Parks say we would be better off without them.
Thought experiment: Imagine that the parks lands were instead developed as cottages. Say 500 of them, each paying $4,000 a year in taxes. That’s $2 million in taxes, of which MNBP would keep about $750,000, the same as it gets now in PILT. What would we rather have — 500 cottages (“PRIVATE PROPERTY — NO TRESPASSING”) or a national park?
Conclusion: the money’s a wash but it would be a very different community without National Parks. With cottages all along the shoreline, the Bruce Trail would probably have to follow the highway. But with no public property, no national parks, there’d be a lot fewer people here and a lot fewer services needed.
So yes, despite the generous PILT payments, the National Parks still represent a drain on municipal finances.
The equation for provincially-owned properties is quite different. They pay PILT at the residential, not commercial, rate. Despite the large footprint of Provincial Parks and Provincial Nature Reserves, we only get $160,000 per year in provincial PILT.
Then there’s Bruce County. They get almost exactly the same amount of our taxes as MNBP does — call it $7 million. Are we getting $7 million worth of services from Bruce County?
Let’s go with “No” there too.
So yes, we are getting screwed, three different ways. We have a right to expect better from all three senior levels of government. The giant sucking sound is real.
But proving that a situation is unfair doesn’t solve the unfairness. That’s only the first step.
We have to explain precisely what must be done, then convince the senior governments that it’s their responsibility to do it. We need to cut their meat for them — break the process into bite-sized chunks that fit the criteria of the granting agencies and the grant programs. We need to plan things out carefully so they’re shovel-ready.
It’s not enough to just point at the giant sucking sound. We have to prove to them that they’re responsible for fixing it, then hand them a bite-sized, shovel-ready solution and a pen to sign the cheque.
The lines of communication have been opened. MPP Rick Byers attended Council’s Dec 19 Meeting; MP Alex Ruff is attending the Jan 9 Meeting. They’re both listening.
The next step is on us. Stay tuned.
