This analysis points to a tremendous fiscal challenge for municipalities. Over the past 40 years, municipalities have assumed a growing-and now the largest- portion of Canada's capital stock. This had to be financed mainly through the property tax, a form of taxation that is less responsive to economic growth than income and sales taxes. Since the late 1970s, as the responsibility for infrastructure investment shifted to municipalities and the municipal property tax, there was a precipitous decline in capital stock. As a result, the average age of municipal infrastructure increased significantly over this period. In short, a vicious cycle was created that led to a critical backlog of investments in municipal infrastructure, now known as the municipal infrastructure deficit.