August 2017
Backgrounder

Municipal governments own more of Ontario’s infrastructure than any other order of government. Most of it is essential to our economic prosperity and our quality of life, including:
 
  • Drinking water
  • Sewage and waste disposal
  • Parks and recreational facilities
  • Social housing
  • Local roads and bridges
  • Public transit
This infrastructure is under mounting pressure. Much of it was first built in the 1950s and 1960s and needs modern upgrades or replacement. A growing population is also increasing the burden on existing infrastructure and fueling the demand for new investments. It was estimated in 2008 that Ontario faces a municipal infrastructure gap of $60 billion that will take 10 years to close, leaving municipal governments with a bill of $6 billion each year.

AMO has advocated for dedicated, long-term, sustainable infrastructure funding programs from the federal and provincial governments. The 2008 agreement to upload provincial social services and some court security costs to the Province helps municipalities to free up property tax dollars for infrastructure investment. Ontario’s municipalities have also put recent federal and provincial funding programs to good use with projects that are improving infrastructure across the province.

Federal Infrastructure Funding
Phase 1
Phase 1 (April 1, 2016 – March 31, 2018) funding was provided by the Government of Canada to expressly help municipalities with repair and rehabilitation projects. Funding was mainly provided through the Clean Water and Wastewater Fund (CWWF) and Public Transit Infrastructure Fund (PTIF) in Federal Phase 1 projects.

Clean Water and Wastewater Fund (CWWF)
The CWWF was announced in Ontario on September 15, 2016. The Fund is $1.1 billion for water, wastewater and storm water systems in Ontario. The federal government provided $569 million and Ontario and municipal governments provided $275 million each.  Over 1,300 water, wastewater and stormwater projects have been approved in Ontario through the CWWF.

Public Transit Infrastructure Fund (PTIF)
In Ontario, PTIF accounted for nearly $1.5 billion of the national total of $3.4 billion. The program was allocated by ridership numbers from the Canadian Urban Transit Association. AMO understands that $1 billion of Ontario’s share has been approved.

Phase 2: Next Steps
The federal government announced Phase 2 of its infrastructure funding plan with a total of $180 billion spent over 11 years. In addition to the balance of funding for previous Green, Social and Public Transit Infrastructure Funds ($20 billion each, including Phase 1), the government has added $10.1 billion for Trade and Transportation Infrastructure and $2 billion for Rural and Northern. This funding must be implemented by agreements with each province and territory. Negotiations are ongoing and funding is designed to start flowing after the 2018 Budget, ramping up in the out years.
 
In Phase 2, Ontario will be eligible for $11.8 billion including $8.3 billion for transit, $2.8 billion for green infrastructure, $407 million for community, culture and recreation and $250 million for rural and northern communities. AMO is working with the provincial Ministry of Infrastructure as this funding is finalized.

Ontario Government
The Province has taken steps to increase municipal infrastructure funding. The Ontario Community Infrastructure Fund (OCIF) was increased in 2016 with formula-based support growing to $200 million, and application funding growing to $100 million annually by 2018-19. As well, $15 million annually will go to the new Connecting Links program to help pay for the construction and repair costs of municipal roads that connect communities to provincial highways. This is on top of the Building Ontario Up investment of $130 billion in public infrastructure over 10 years starting in 2015.

Budget 2015 also included an increase of $2.6 billion in dedicated funds for Moving Ontario Forward, for a total of $31.5 billion over 10 years. This includes $16 billion for transit projects in the Greater Toronto & Hamilton Area (GTHA), and $15 billion for transportation and priority infrastructure projects outside the GTHA.

The Province has also increased provincial Gas Tax Funding for Transit Projects beginning in 2019. Currently, 99 Ontario municipalities receive funding from this program. OCIF funding is set to triple, while the provincial gas tax will double over the period. These increases, providing more than $900 million per year for municipal transit, roads and bridges, water and wastewater services helps to improve the balance between the need and available funding.

The Infrastructure for Jobs and Prosperity Act passed by the legislature in spring 2015, made asset management planning mandatory for broader public sector organizations such as municipal governments. In 2012, the province provided funding and published a guide to help municipalities complete those plans. Small municipalities were given $12 million to undertake planning over the intervening years.

The Ministry of Infrastructure has been working to create regulations which would standardize municipal asset management planning practices in Ontario. AMO agrees that asset management is critical for councils to make the best decisions for their communities. However, there is concern amongst smaller municipalities about the practicality of these newly proposed requirements. AMO and its subsidiary, Local Authority Services (LAS), are working to build capacity for asset management at the local level. AMO will continue to work in partnership with the federal and provincial governments to ensure that programs address the needs of communities across Ontario.