Carney says he has no immediate plans to overhaul municipal funding

OTTAWA — Ottawa probably can’t help overhaul how municipalities raise funds in the near future, because the federal government is now focused on major, nation-building projects, Prime Minister Mark Carney said Friday

“We’re building on what has worked. We’re learning lessons from what hasn’t,” Carney said at an event held by the Federation of Canadian Municipalities.

The group represents cities and towns that have lobbied Ottawa for years to give them more independent means of financing their operations.

Cities generally fall under provincial oversight and have limited tools to gather tax revenues or plan for long-term projects.

“What we’re looking to have is a structured, collaborative, mature and sincere conversation about how to reform our fiscal tools,” the group’s president Rebecca Bligh said. She argued the current arrangement was “designed in the horse-and-cart era.”

The prime minister responded that while funding models for municipalities should not be “arbitrary and unpredictable,” remaking them would require a thorough discussion with provinces.

“Fiscal instruments … are bigger sets of decisions, which necessarily involve the provinces first and foremost,” he said.

“I don’t think we can wait for those discussions. And that’s why where we’ve focused in is specific types of infrastructure, specific housing.”

Carney pointed to the urgency to get more housing built along with trade infrastructure that can help deal with American economic threats, such as new ports and energy corridors.

The prime minister said that while he wants to collaborate with municipalities, that likely would involve Ottawa helping municipalities pay for specific projects, as has been done in recent years.

Carney also said youth can have careers in the trades and not just jobs, with the scale or homebuilding and energy projects the government hopes to build.

“We’re going to be building this country for the next quarter century,” he said.

This report by The Canadian Press was first published May 30, 2025.

Dylan Robertson, The Canadian Press