Lol they definitely did not take better care of infrastructure. They were freaking cowboys and a ton of municipalities got burnt on it. I work on lots of capital jobs that involve fixing problems that have been around since then.
So now they have much more stringent standards, which in turn means projects are more expensive. Add onto that the growing complexity - installing a water main down a street in 1980 when you have overhead hydro lines and no other utilities to work around is much easier than installation in a crowded right-of-way with buried gas, hydro, storm sewer, sanitary sewer, and existing water main that needs to continue to service residents.
As for how they were originally funded, idk. Don't think they ever really asked residents what they wanted back then. Now there's much more accountability, which is good but has drawbacks and costs.
In Canadian municipalities specifically, or in general, like for climate reasons?
I mean climate, but not specifically global warming, just the fact were a planet with finite resources.