Province Eases Financial Pressures on Municipalities and Property Taxpayers
Provincial and municipal partners reach agreement
The McGuinty government is moving to upload all social assistance benefits and court security costs from municipalities, as stated in an agreement announced today by the Province of Ontario, the Association of Municipalities of Ontario (AMO) and the City of Toronto.
A consensus report released today will help reduce cost pressures for municipalities and property taxpayers. The Report completes the work of the Provincial-Municipal Fiscal and Service Delivery Review, which has created new and better ways to fund and deliver services to the people of Ontario.
The agreement accomplishes the following:
- The Report announces the upload of Ontario Works benefits and court security costs.
- Early outcomes of the Review process include the upload of Ontario Drug Benefits, completed in 2008, and the Ontario Disability Support Program, beginning in 2009.
- By 2018, when all these uploads are completed, the Review will result in a net annual benefit to municipalities of more than $1.5 billion compared to 2007.
- By 2018, total annual ongoing support to municipalities, including other provincial initiatives, is projected to reach $3.8 billion - an increase of about $2.7 billion or 250 per cent over 2003.
- The upload of Ontario Works benefits will reduce municipal costs by more than $400 million annually, by 2018.
- The cost of court security will also be uploaded to the province, starting in 2012 to a maximum of $125 million a year by 2018.
- Projected total ongoing annual support to municipalities is estimated to be $3.8 billion by 2018, a $2.7 billion or 250 per cent increase over 2003.
- The province will begin the upload of the benefits portion of Ontario Works in 2010 and the upload of court security in 2012. Uploads will be complete in 2018.
- In 2007, as an early outcome of the Review, the Premier announced that the Province would upload Ontario Drug Benefit (ODB) costs in 2008 and Ontario Disability Support Program (ODSP) costs starting in 2009 and completed by 2011.
- In addition to these uploads resulting from the Review, since 2003, the Province has uploaded public health costs by increasing the provincial share from 50 per cent to 75 per cent, made additional investments in land ambulance services, and provided two cents per litre of provincial gas tax to municipalities to improve public transit.
- A joint provincial-municipal process will develop options regarding responsibilities and funding arrangements for roads and bridges.
- A joint working group will be formed to discuss the current approach to funding Ontario Works administration and to recommend principles for simplifying and strengthening accountability.
- Service delivery recommendations mean provincial and municipal governments will work together to refocus programs and services around results for people.
- Since 2005, municipalities have been receiving funds through the Ontario Municipal Partnership Fund (OMPF) to respond to particular municipal challenges, including social program costs. Consistent with the normal operation of the OMPF, social programs grants will be adjusted to reflect the reduction in municipal social program costs as the uploads are phased in. As a result of reduced social program costs, the OMPF will decline to a level of about $500 million by 2016.
- The province has invested almost $7 billion in funding for municipal infrastructure in the last three fiscal years.
- Through the Investing in Ontario Act, 2008, the government is investing $1.1 billion this year in municipal infrastructure to improve roads and bridges, expand public transit and build other municipal projects throughout the province.
“This is a milestone in our partnership with municipal governments and all Ontarians will benefit from the spirit of collaboration of the Review.”
“Through our partnerships with municipalities, we are uploading social assistance costs, which builds on our poverty agenda, at an affordable pace. This agreement represents the success we can achieve by working together while recognizing Ontario's fiscal challenges in the current global economic environment.”
“For more than a decade AMO’s top priority has been to upload social assistance costs from the municipal property tax base. In 2005, we called upon the Ontario Government to work with municipalities to develop a plan to restore fiscally sustainable municipal government to Ontario over a manageable period of time. The Province listened and it has worked with us to build stronger communities throughout Ontario.”
“Today’s announcement shows very clearly that this provincial government has both listened and acted in response to the needs of our communities. The provincial government came to the table, worked closely with us, and got the principles right. We have set forward on a new course.”