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The Investing In Ontario Act

Archived Backgrounder

The Investing In Ontario Act

Ministry of Finance

The provincial government is providing Ontario municipalities with $1.1 billion in additional funding to support infrastructure investments through the Investing in Ontario Act, 2008

In May 2008, the government passed the Investing in Ontario Act.  The Act allows the government to use a portion of any unanticipated year-end surplus to address priority public needs as well as reduce the province's accumulated deficit.

Through regulation, the government designated municipalities as the eligible recipients of payments for 2007-08.  Future eligible recipients will be identified based on provincial priorities.

The surplus for 2007-08 is sufficient to enable a payment under the Investing in Ontario Act of $1.1 billion in additional funding to municipalities to support infrastructure investments while also reducing the province's accumulated deficit by $600 million.

Prior to the passage of the Act, all year-end surpluses went towards reduction of the accumulated deficit.

MUNICIPAL ALLOCATIONS

Details on allocation amounts for individual municipalities and timing of payments are posted on the Ministry of Finance website.

The allocation is shared between municipalities primarily on a per-capita basis.

In instances where there are two levels of municipal government (e.g., counties or regions), the upper-tier municipality will share this amount with its lower-tier municipalities. 

The upper-tier municipality will receive its share of funding based on its total municipal capital investments over the 2001 to 2005 period.

The lower-tier municipalities will receive the remaining amount on a per-capita basis.

While the funds are to be used for capital purposes, each municipality will have flexibility and discretion to spend its allocation on its own capital priorities such as improved roads and bridges, expanding transit or upgrading social housing.

ACCOUNTABILITY

Consistent with the provisions required under the Province's transfer payment directive, municipalities will be subject to accountability requirements regarding their handling of payments received under the Act for the 2007-08 fiscal year including:

  • Report-backs on how the funds were used
  • The right of the province to independent verification or audit, and
  • The right of the province to recover funds if they are not used for capital purposes.

SUPPORT FOR MUNICIPALITIES

In 2007-08, Ontario provided more than $3.5 billion to municipalities for infrastructure, roughly double the amount provided in 2006-07.  By redirecting a portion of provincial surpluses to municipalities this year for capital purposes, the Ontario government will further help to address the municipal infrastructure deficit and foster more job creation in the short term.  These investments are evidence of a more collaborative and productive relationship between the province and Ontario's municipalities and represent another element of the government's five-point economic plan.

In 2007-08, Ontario invested a total of $9.9 billion in infrastructure to improve the province's highways, public transit, municipal roads and bridges, hospitals, places to learn and other public assets.  Investing in infrastructure is a crucial component of a strong economy and part of the government's five-point plan for jobs and growth in Ontario.

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