On June 17, 2005, AMO signed an historic agreement with the Government of Canada setting out a new course for federal-municipal relations in the Province of Ontario.

Outcome and Long-Term Benefits

For the first time, it created a direct relationship between the two orders of government and established the transfer of gas tax revenues that would bring Ontario’s municipalities over $1.9 billion in infrastructure funding over a five year period from 2005 to 2009.
In 2007, Canada’s Gas Tax Fund was extended to 2014 and in December 2011, the Fund was enshrined in federal legislation as a permanent transfer of $2 billion per year for municipal infrastructure across the country. It is a long-term, stable, and predictable source of funding that municipalities can rely on.

The resulting benefits of this mature partnership are clear, with Ontario’s municipalities investing over $2 billion from Canada’s Gas Tax Fund since 2005. With an infrastructure investment gap of $60 billion over the next 10 years, AMO will continue to ensure Canada’s Gas Tax Fund works for our municipalities.


AMO’s Work

AMO played a critical role in the development and delivery of this new revenue sharing agreement. Our positive relationship with the Province meant that municipalities were recognized as mature and accountable, and able to directly negotiate with the Government of Canada. This allowed AMO to strongly advocate for Ontario’s fair share and to ensure that this new source of funding would benefit all Ontario municipalities. 

The result of AMO’s work was the first ever direct partnership between Ontario’s municipalities and the Government of Canada, and a program delivery model that is flexible and responds to local needs. Under the Ontario Agreement, municipalities receive funding twice a year, without the need for an application, and can bank, borrow or invest these funds as they see fit. The program allows local councils to determine local priorities within six categories of environmentally sustainable infrastructure and for long-term planning projects that contribute to sustainability.

Most importantly, AMO is responsible for the administration of Canada’s Gas Tax Fund in Ontario, which ensures that municipalities have a permanent seat at the table. The Ontario model is unique – it is the only jurisdiction in Canada where municipalities administer the entire funding envelope and the only place where funding is completely allocated on an entitlement basis. Instead of an uncertain application process, Ontario municipalities have a mutually respectful relationship with the Government of Canada that has led to administration that is efficient, cost effective and accountable.