Cities Close To Problems, Far From Money

By Diane Bérard 

Cities now manage far more than just roads, waste, and snow removal. Housing, mental health, climate adaptation, immigration – these crises are increasingly landing on city hall’s doorstep, often without the necessary resources to address them.

“Right now, out of all the money collected, municipalities only get 10 cents of that dollar,” said Denys Volkov, executive director of the Association of Manitoba Municipalities.

“The provincial and federal governments keep adding environmental regulations without any funding attached to them. Regulation is probably the biggest driving cost factor for municipalities on the environmental side right now.”

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Originally published in Policy Options, May 25, 2026

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The situation has improved over the past decade. In 2014, federal and provincial transfers to Quebec municipalities accounted for 12.9 per cent of budgets. In 2024, this proportion reached 18.9 per cent, according to a recent study by the firm Aviseo. Nationally, it stands at 21 per cent, according to the Federation of Canadian Municipalities. However, this increase is not enough to make up for the shortfall resulting from numerous unfunded responsibilities.

Downloaded responsibilities piling up since the 1960s

Local governments have been absorbing responsibilities passed from the federal government to the provinces and then on to municipalities since the 1960s, explains Fanny Tremblay-Racicot, professor and researcher at the École nationale d’administration publique (ÉNAP).