At over one hundred million dollars a year, taxes paid by owners of land, homes, and businesses in the CBRM are the largest source of revenue we rely on to continue surviving as a municipality. Based on the last CBRM budget approved by Council, we're just barely getting by. Based on outmigration statistics, we're up to our waists in quicksand.

Unless more new homes and businesses are built or improved, the only way to increase our revenue from these sources is to increase taxes by either increasing the rates or breaking the tax cap.

With a regional economy that is propped up by our Western oil workers, we're still the 11th worst in the entire country, compared with 417 other cities and municipalities. It's fairly obvious that it is much harder to encourage growth by way of new homes and businesses under our present conditions.

The problem is magnified the longer it goes unmitigated. If outmigration continues, we will see a further decline in the rate of growth in our tax base, and we'll have to wring the dish rag even tighter to see if there are any drops of water left within. What happens when there are no drops left?

There is evidence now that the tax base cannot withstand much more pressure. Increasing tax bills going unpaid is the key indicator. While those who aren't paying taxes will be impacted primarily by eventually having their homes or businesses taken from them for public auction, the increased pressure gets passed onto others who are trying to stay above water.

Not only does increasing taxes consume more of their hard-to-come-by income, it enhances the idea that they should consider leaving Cape Breton to live and work in a better functioning economy elsewhere in the country.

This becomes a vicious cycle. Continued outmigration makes it increasingly difficult for us to create an environment that keeps people living and working here.

Some quick facts:

• There are 5,971 CBRM homes in tax arrears.
• There are approximately $23 Million dollars in tax arrears.
• The CBRM had to hire tax bill collectors in order to try to get some of this paid.
• One tax collector was able to get about $500,000 paid.
• The CBRM has the 2nd highest residential tax rate in the province.
• The CBRM has the highest commercial tax rate in the province.
• Halifax has four times more population than the CBRM, but it has a nine times greater tax base.
• In 2015, CFO Marie Walsh said CBRM building permit applications were down by 33%.
• In 2018, CBRM executive Malcolm Gillis said the number of demolitions is now approaching the number of permits for new construction.
• Only 25% of properties that are demolished are getting rebuilt. 75% of those properties do not recover as an increase to the tax base.
• Of the new homes being built, "one unit" homes are steadily declining, while apartments are stable or increasing as of 2017. This indicates a transition from a homeowner market to a landlord rental market.
• Nonetheless, the province suggests that the CBRM's "tax effort" is insufficient.
• If the CBRM had to fund the entire wastewater upgrade (a Federal requirement) with long-term borrowing, taxes would have to increase by over 62.5% (worst case scenario). And the longer we wait, the greater the costs.

While these facts are alarming, the difficulty in the range of potential solutions is as well. Economic growth, the growth of population by birth rate or in-migration, breaking the tax cap, increasing Equalization, or securing a regional charter are either unlikely to be achieved in the near future, or won't necessarily resolve the issue substantially or without adverse side effects when achieved.

Unless a sudden influx of job occurs - such as would be possible if a container terminal project actually materialized in the near future - the only difficult solution that would have an immediate impact would be a large increase in annual Equalization/transfer payments from the Province.

Such an increase in municipal revenue would immediately alter the economic conditions that deter growth. Meanwhile, a bare minimum increase would be $16 Million per year and must not come with a reduction in other provincial investments as was suggested by MLA Geoff MacLellan when he spoke before the CBRM council during the previous provincial election.

The Equalization Solution

In the absence of any clear indication that the present CBRM mayor, administration, or council is capable of economic innovation, the most familiar strategy with the greatest potential for success would be the pursuit of a commitment to increase the currently frozen Equalization funding from the Province.

There has been a great deal of talk about Equalization from councillors. Since the Council will easily have a majority vote available to move motions in this direction, there is no barrier to taking action immediately. In light of Council holding leverage over Mayor Cecil Clarke (by way of his provincial PC leadership campaign), Liberal MLAs Derek Mombourquette and Geoff MacLellan, and the Liberal provincial government as a whole, securing funding in the range of $16-50 Million per year does not represent an impossible feat.

If there is one advantage to being one of the worst economically performing regions in all of Canada it's that the larger the problem, the more support it should demand.

Perhaps a hockey analogy is in order. With the NHL draft lottery, the worst performing non-playoff teams each year are given a greater chance of getting an early draft pick, significantly increasing their chances of recruiting a new hockey star before other teams sign him.

How much worse could Cape Breton and the CBRM perform to build a case that we need more Provincial and Federal resources?

Once again, this province is receiving an amount in Federal Equalization that is nearing two billion dollars, and the CBRM is given a transfer of just $16 Million dollars each year. By comparison to the NHL draft lottery, we're taking the leftovers after being forced to draw last.

If our MPs, MLAs, Mayor and Council don't see this as an opportunity - and go for it now - we need to replace the lot of them.

NOTE: The views expressed above are my own and do not represent lokol (goCapeBreton.com). Read more