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Feb 2020 | January-February Issue

Tyler Sutton, Editor-in-Chief



The cost of living is an odd unit of measurement. Its intent is to measure the cost of maintaining a certain standard of living, taking into consideration “basic” household expenses. The trick is, what should be included in the basket of basic expenditures required to maintain a good quality of life? For some, access to affordable shelter and nutritious food is precarious, while for others, commuter traffic and lack of childcare are the biggest detriments to maintaining a higher standard of living. What’s clear is that the cost of living is on the rise in North America regardless of what indicators are used in its measurement. 
According to Statistics Canada’s Survey of Household Spending, the average Canadian household spent 2.5% more on goods and services in 2017 compared to 2016. Shelter continues to be the largest expenditure for Canadian households, rising from 28.9% of total household expenses in 2015 to 29.2% in 2017. Transportation costs made up 19.9% of total household consumption, followed by food at 13.4%. 
This issue of the Public Sector Digest explores several areas in which the rising cost of living is being felt most acutely, and how governments are responding to these challenges. With shelter costs consuming so much of the average household budget, rising housing prices are top of mind for most orders of government. According to Josh Gordon, Assistant Professor at Simon Fraser University, speculative housing investment and feverish foreign capital investment in Canada’s housing market are two of the main culprits behind the nation’s housing affordability problem. As discussed in “Municipal Revenue Generation: A Provincial Analysis”, some cities are experimenting with vacancy taxes to curb the purchase of properties for investment purposes, rather than for a primary residence. 
Other communities are starting to adapt their urban planning to the new reality of the housing market in order to provide more options for the unique housing needs of residents. The Town of Innisfil Ontario recently announced plans to build The Orbit, a new transit-oriented space-age inspired community hub. In “The Future of Housing: Community Design for the New Decade”, Mayor Dollin describes her community’s ambitious goal of providing a quality of life that includes diverse affordable housing options and a small-town feel, with convenient access to the amenities of Toronto. 
Local governments are feeling the pressure to provide the basic community services that contribute so greatly to quality of life, with limited revenue generation tools at their disposal. Property tax is the primary source of revenue for municipalities in Canada, consisting of as much as 66.5% of total municipal revenue in the case of Nova Scotia communities (compared to 29.8% in Saskatchewan at the other end of the spectrum). Local governments can choose to raise property taxes to help fund services like community programming and infrastructure renewal, but they risk contributing further to rising housing costs. 
Communities like the Town of Whitby are taking measures to improve the capacity of their staff to make strategic decisions about municipal investments. By engaging student interns to help collect better data on the condition of their infrastructure assets, the Town of Whitby now has the necessary information to optimize public works projects, saving the municipality significant money in the long run and improving service delivery for the residents of the community. Likewise, Dr. Peter Walton of the University of Oxford and Natalie Ambrosio of Four Twenty Seven, describe the benefits of taking a proactive approach to climate change adaptation, mitigating risk to government organizations and ensuring that standard of living can be maintained for residents in the face of one of the world’s most unpredictable challenges. 
Inevitably, the cost of living will continue to rise, but the efficiency and effectiveness of government services will continue to improve in those organizations willing to experiment with new solutions, learn from others, and invest upfront in proactivity.     

Tyler Sutton, Editor-in-Chief
Public Sector Digest