In the 1990s and early 2000s, municipalities were saddled with the responsibility of subsidizing provincial social service and court security costs.

Property taxes increased significantly. The cost of these programs diverted billions in municipal revenues from municipal service delivery and investment in vital infrastructure. 

In 2008, the Provincial-Municipal Fiscal Service Delivery Review brought Ontario’s municipalities a great deal closer to achieving greater equity in provincial-municipal fiscal relations. The Review Agreement committed the Province to upload social assistance benefit and court security costs that had been downloaded to municipalities. The agreement is currently being implemented through a ten-year plan. By 2018, these uploads will be responsible for a net benefit to Ontario’s municipalities of more than $1.5 billion per year and municipal property tax revenue will exist to serve its intent – funding municipal programs and services and investing in infrastructure.

AMO’s Work

AMO’s hard work on behalf of its members resulted in a better deal for municipalities and property taxpayers in Ontario. 

The review was a collaborative process between AMO, the Government of Ontario and the City of Toronto. Beginning in autumn 2006, the review focused on a broad range of issues, from fiscal relationships and infrastructure to the delivery of human services. Over a 20-month period, AMO staff and Board members represented the interests of municipalities at the working tables on service delivery accountability, infrastructure, and fiscal architecture and economic competitiveness. 

Outcome and Long-term Benefits  

The review constituted a new, collaborative provincial-municipal approach. It fundamentally reshaped provincial-municipal fiscal relations.  Municipalities also gained greater flexibility to deliver programs more effectively – focusing on outcomes for people rather than outdated rules and regulations. 

Provincial and municipal officials continue to meet on a regular basis to oversee the implementation of the Review Report’s recommendations. 

While implementation is ongoing, there have been significant milestones achieved to date. The province’s upload of costs related to Ontario Works benefits began in 2010, and will represent an upload of about $425 million in annual costs by 2018. The upload of municipal costs for the Ontario Drug Benefit and Ontario Disability Support Program was phased in fully in 2011. The transfer of court security costs began in 2012 and will reach $125 million by 2018. 

The 2012 value of this upload agreement to the municipal sector and property taxpayers is $1.2 billion.