How Cities Make Money
A city needs money to pay for roads and garbage collection.
Which of these is its MAIN source of revenue?
A) Income tax
B) Property tax
C) Tariffs
D) Corporate tax
Property Tax - CITIES DO NOT COLLECT INCOME TAX IN CANADA
Garbage Collection - who does it?
Municipal Governments
What is revenue?
A) Money the government collects
B) Money the government spends
A) Money the government collects
A city collects $5 million and spends $5 million.
What is this called?
Balanced Budget
Repairing a broken traffic light today.
Short Term
True or False: Municipal governments in Canada can create new taxes whenever they want.
FALSE: Cities only have powers given to them by provinces.
Hospitals — which level primarily funds them?
Provincial Governments
What is an expense?
A) Money the government collects
B) Money the government spends
B) Money the government spends
If a city runs a surplus, what does that mean?
It collected more money than it spent
Building a new public transit system that will last 40 years.
Long Term
Your city wants to raise more money.
Which of these is something it could realistically increase?
A) GST
B) Property tax
C) Immigration fees
D) Tariffs
Property Tax - MUNICIPAL POWER IS LIMITED
National defence — which level?
Federal Level
A government collects $5 million and spends $5 million. What is this called?
Balanced budget
What does it mean when the government is in deficit?
It means that the government spent more money than it collected
In a dry season, hiring 5 new firefighters.
BOTH (it serves both long term (salary) and short term (environmental relief))
If property values in a city increase, what likely happens to city revenue (assuming tax rates stay the same)?
Revenue increases - The HOUSING MARKET is linked to CITY BUDGET!
Building a new city park — which level?
Municipal Government
A government collects $5 million but spends $6 million. What is this called?
Deficit
If a city runs a deficit, what must it most likely do?
A) Print more money
B) Borrow money
C) Raise tariffs
B) Borrow money
Your city has $2 million to spend on their WHOLE annual budget.
Option A: Patch potholes across the city.
Option B: Fully repave one major road.
Which option reflects stronger long-term planning?
Option B. A new road is likely to have a longer lifespan than a patched one.
Your city wants to build a $10 million recreation centre.
Right now, it only collects money through property taxes.
It does not have enough money saved.
Which of these is the MOST realistic solution?
A) Start collecting income tax
B) Ask the provincial or federal government for funding
C) Print more money
D) Raise tariffs on imported goods
B) Ask the provincial or federal government for funding
Cities cannot collect income tax (provincial/federal power).
Cities cannot print money (federal power).
Cities do not control tariffs (federal power).
They can request grants or raise property taxes.
Why can’t municipal governments decide to run the military?
A) They don’t have enough money
B) It is not one of their legal responsibilities
C) Citizens wouldn’t agree
B) It is not one of their legal responsibilities
Because municipalities have limited powers, the federal government has constitutional responsibility. (Playing in your own sandbox)
A city collects $7 million and spends $6 million.
Option A: The city has a surplus and could save or invest the extra money.
Option B: The city has a deficit and must borrow money.
Which statement is correct?
(Write A or B.)
A: The city has a surplus and could save or invest the extra money.
Pembroke is considering running a deficit this year.
Option A: Borrow money to replace aging water pipes that are at risk of failure.
Option B: Borrow money to develop kinsmen pool into an all inclusive recreation centre and gym.
Which situation more clearly justifies running a deficit?
(Write A or B.)
A) Borrow money to replace aging water pipes that are at risk of failure.
PREVENTATIVE
Pembroke has $5 million to spend in the city for 2026. There are two major proposals for spending this year:
Option A: Begin building additional retirement home spaces.
Option B: Use the money to avoid raising property taxes this year.
Which option reflects stronger long-term planning?
(Write A or B.)
Option A
Avoiding taxes = short-term political relief
Infrastructure planning = long-term preparation