05/09/2001

Compared to recent years, the Budget did not bring major change that will affect municipal sector finances but it did send some signals.
Economic Growth Forecast: 
The government expects economic growth in the Province will reach 2.3% in 2001, and 3.6% in 2002. "It is important to the municipal sector that Ontario attains or exceeds these levels of growth," said AMO President, Ann Mulvale.  "Any slow down in the economy and job loss will result in an increase in social costs borne by the municipal property taxpayer."

Public Sector Accountability Act:
Minister Flaherty announced the government's intention to introduce a Public Sector Accountability Act, aimed at all major organizations that receive public funding. Among the requirements of the Act, publicly-funded organizations will: 

  • be required to balance their budgets each year; and
  • develop plans that outline the organization's objectives and track progress towards them; identify areas of progress and areas of weakness; ways in which the private sector could provide assistance; and other efficiency measures. 
Municipalities are already required to balance their budgets, and most large municipalities do develop business plans that outline objectives and efficiency targets. In addition, the Province announced a 'Value for Money' review of all government spending, and the establishment of a private sector panel, to review and recommend changes to the role of the public sector in Ontario.  What is unclear is how these will or will not relate to municipal government and the impact.  

In response to the announcement, AMO President Anne Mulvale commented, "If the Accountability Act and Value for Money review are meant to seriously challenge public sector organization thinking on ways to deliver programs and services differently, then this process must be accompanied with the tools to do so, including a flexible labour framework." 

Legislated Tax Cuts: 
The Minister committed to a legislated schedule of tax cuts, which would give businesses and investors certainty and clear information. AMO President Ann Mulvale said, "The municipal sector deserves the same respect. Municipalities and property taxpayers need early notice of provincial policy changes. Municipalities find it difficult to respond to constantly changing provincial policy and requirements, late confirmation of funding, and to absorb in-year costs handed down by the Province."

New Funding:
The Government announced that the remaining $500 million in the $1 billion SuperBuild Millennium Fund will be dedicated to transportation and environment, including $250 million for inter-regional transit. Another $25 million will be spent on air and water, but it appears to be for Ministry of the Environment operational funding, including added enforcement. 

AMO and its members welcome the designation of $500 million to transportation and environment. It is imperative that SuperBuild moves quickly to release this money. Municipalities have been frustrated with the slow process of awarding money under SuperBuild to date. Nearly a year after OSTAR funding for water and sewer projects was announced, only 3 million out of $240 million has been awarded. 

OPAC:
Among other matters, AMO learnt today that it has been successful in securing a majority of seats on the reconstituted Board, in recognition of >say for pay= principle of Who Does What, and that the corporation will be renamed the Municipal Property Assessment Corporation (MPAC).  Changes to the legislation are part of the Budget Bill, which will see speedy passage.

The Association of Municipalities of Ontario (AMO) is a non-profit organization with member municipalities representing 98 per cent of Ontario's population.

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