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Originally Posted by Hack&Lube
I know it's obviously more complex than that but I really believe it's the role of government to be flexible and foster economic growth even if it needs to take a hit in bad times. Maybe I'm a "New Deal" or Keynesian sort of guy. I guess these rules are dictated at the provincial or federal level.
We obviously don't want Canadian cities to fall into the Detroit model of debt.
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There's are a number of challenges. As others have stated, municipalities are restricted from running deficits. That overall is a good thing in my view.
The second constraint of course is that for better or worse most municipal employees are in public sector union with multiyear contracts. Many existing contracts date back to when things were white hot. Wage increases were below private sector wage growth in those times, but obviously do not go down if suddenly things tank. Since this is a huge cost, it limits flexibility in budget making.