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Intervention Centrale en matière de Finances Locales

Listed author(s):
  • Véronique Le Gallo
  • Nicolas Marceau

Quebec municipalities face a critical financial crisis. Both their main sources of income, (governmental transfers and land taxes) are diminishing while demands from taxpayers multiply. The 80's economic crisis has slowed down the growth rate of commercial and industrial investments, thus reducing the sources of income. Moreover, since higher governments prioritise deficit reduction, intergovernmental transfers towards municipalities have been reduced. This situation is not particular to Quebec, all over the world, municipalities have taken on a greater number of responsibilities and have witnessed serious reduction in their budgets. In this report, we examine the measures taken by central governments in response to the difficult financial standing of municipalities. The report is divided into six parts, each one analyzing, from an economic standpoint, the measures undertaken by central governments in response to municipal financial problems. We discuss issues such as municipal mergers, control of municipal debt, taxes in general, the concept of user/payer, municipal equalization and competition between municipalities. Les municipalités québécoises font désormais face à une période critique du point de vue financier. Leurs deux sources de revenus traditionnels, transferts gouvernementaux et impôts fonciers, s'appauvrissent pendant que les demandes des contribuables se multiplient. La crise économique a fait ralentir le taux de croissance des investissements commerciaux et industriels, réduisant ainsi l'assiette fiscale locale et les sources de revenus propres. De plus, chaque niveau de gouvernement supérieur ayant mis la priorité sur la réduction de leur déficit, les transferts intergouvernementaux vers les municipalités ont été réduits. Mais cette situation n'est pas particulière au Québec. Partout dans le monde, les municipalités se sont vues imposer un plus grand nombre de responsabilités depuis la seconde guerre mondiale, et elles ont vu leur budget être réduit depuis les années 80. Nous examinons donc, dans ce rapport, les mesures prises par les gouvernements centraux en réponse à la situation financière difficile des municipalités et aux impératifs d'autant plus grands d'une gestion efficace. Le rapport se divise en six parties, chacune analysant, du point de vue économique, des mesures entreprises par les gouvernements centraux en réponse aux problèmes financiers municipaux. Ces six parties portent donc sur le regroupement municipal, le contrôle de la dette municipale, l'assiette fiscale en général, l'utilisation de la tarification à l'usager, la péréquation municipale et la concurrence entre municipalités. Chaque partie expose en premier lieu les avantages et les inconvénients de chaque mesure puis tente de tirer quelques conclusions pertinentes au cas du Québec grâce aux études empiriques.

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Paper provided by CIRANO in its series CIRANO Project Reports with number 1999rp-07.

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Length: 62 pages
Date of creation: 01 Mar 1999
Handle: RePEc:cir:cirpro:1999rp-07
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  1. Stephen M. Miller & Frank S. Russek, 1997. "Fiscal Structures and Economic Growth at the State and Local Level," Public Finance Review, , vol. 25(2), pages 213-237, March.
  2. Timothy J. Bartik, 1999. "Federal Policy Toward State and Local Economic Development in the 1990s," Book chapters authored by Upjohn Institute researchers,in: RD Norton (ed.), The Millennial City: Classic Readings on U.S. Urban Policy, volume 12, pages 235-251 W.E. Upjohn Institute for Employment Research.
  3. Helms, L Jay, 1985. "The Effect of State and Local Taxes on Economic Growth: A Time Series-Cross Section Approach," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 574-582, November.
  4. Paul B. Downing, 1992. "The Revenue Potential of User Charges in Municipal Finance," Public Finance Review, , vol. 20(4), pages 512-527, October.
  5. Mintz, Jack & Tulkens, Henry, 1986. "Commodity tax competition between member states of a federation: equilibrium and efficiency," Journal of Public Economics, Elsevier, vol. 29(2), pages 133-172, March.
  6. Miller, Stephen M & Russek, Frank S, 1997. "Fiscal Structures and Economic Growth: International Evidence," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 603-613, July.
  7. Mofidi, Alaeddin & Stone, Joe A, 1990. "Do State and Local Taxes Affect Economic Growth?," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 686-691, November.
  8. Ladd, Helen F, 1990. "State Assistance to Local Governments: Changes during the 1980s," American Economic Review, American Economic Association, vol. 80(2), pages 171-175, May.
  9. Thierry Madiès, 1997. "Concurrence fiscale et intercommunalité," Revue de l'OFCE, Programme National Persée, vol. 63(1), pages 195-228.
  10. Dick Netzer, 1992. "Differences in Reliance On User Charges By American State and Local Governments," Public Finance Review, , vol. 20(4), pages 499-511, October.
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