"Can we find another vocabulary with which to describe the city, one which takes circulation, hybridity and multiplicity as key urban moments, and fixed boundaries as temporary allegiances and alignments?"

Ash Amin and Nigel Thrift (2002:77)

Introduction

Globalization and new information and communications technologies (NICT) are transforming the role of cities, making them critical venues for innovation and learning. In an increasingly open and digital world, spatial proximity and relational capital arguably matter more than ever: accordingly, local governance matters more than ever as well.

Yet, the emergence in Canada of a significant set of large and medium-sized cities as engines of economic expansion creates many complex challenges. A range of studies (by the Canada West Foundation, the TD Bank, the Federation of Canadian Municipalities, the OECD and a Federal Liberal Caucus Task Force) all point to serious fiscal imbalance and other governance failures hampering municipal governments in Canada.

Is there a misfit between effective decentralized e-governance with cities as critical agents of change on the one hand, and the architecture of the Canadian federation on the other?

Our guiding hypothesis is that a fundamental disconnect exists between the promises of smart cities and communities and the current federal architecture in Canada. This state of affairs weakens considerably the governance of both individual cities and the nation as a whole.

The next section explores the growing importance of local governance. The following one examines two Canadian experiences with the new information technologies: smart communities and the government online initiative. Section 3 gauges the state of fiscal federalism. Section 4 provides a prescriptive series of applied measures that are required to truly empower cities and communities across the country. The conclusion explains why one cannot expect anything but piecemeal and "morceau par morceau" progress on this front.

Proximity, community and technology - a localizing nexus

City-regions and network governance

Two sets of forces have brought forth the present explosion of interest in local systems of innovation and governance: the new importance of city-regions as a result of globalization on the one hand, and the spatial determinants of learning and adaptation on the other.

Globalization and the rapid development and diffusion of information and communication technologies have eliminated borders. This process of international integration has triggered a concomitant process of national disintegration as sub-national units came to depend more and more on extra-national circumstances and were forced to adapt separately and sometimes differently from what the national strategies elected. Naisbitt (1994) has labeled this dual adjustment a "global paradox": broader global integration leading to the growth of importance of city-regions as meaningful loci of governance for socio-economic development (Scott 1994; Moss Kanter 1995; Stoker 1996; Storper 1997; Capello 1999; Lawson and Lorenz 1999).