Toronto, Ont., March 31, 2005. AMO today applauded the Province for reconsidering a decision it announced in February and agreeing to pay municipalities the outstanding bills related to the delivery of Provincial health and social services programs.
The news was contained within the Province’s announcement of a new $656 million Ontario Municipal Partnership Fund (OMPF), which will replace the Community Reinvestment Fund (CRF). 

“Today’s reconciliation announcement shows that the Premier is listening to municipalities,” said AMO President Roger Anderson. “The Province’s decision to pay money owed to municipalities for 2003 and 2004 is good news for property tax payers all over Ontario.”

The CRF was established in 1998 by the previous government to provide partial mitigation for provincial downloading. The CRF has provided annual payments to 403 municipalities with year-end reconciliations that better reflect the true cost of delivering provincial downloaded programs.  On February 21, 2005, the Province announced that it would provide CRF reconciliation for 2003 only.  Responding to concerns raised by AMO and its members, the Premier agreed to review that decision.

Responding to the announcement of the new OMPF program, Anderson said, “It is clear that the Province has done a great deal of work in developing a replacement model for the CRF.  However, the ultimate test of the new model will be in future years as the full impacts are felt.”  Anderson added, “Ultimately, we need to reduce the Province’s reliance on municipal property taxes to pay for provincial health and social services. The new program may provide a better platform for moving in that direction once the Province is in a better fiscal situation.”    

The new funding program will compensate municipalities with high costs for provincial social services programs relative to their assessment base, and assist municipalities with limited assessment wealth due to low property values and limited commercial and industrial assessment.  It will also provide small communities with 50% of eligible policing costs above $150 per household.  The OMPF will also include per household grants for rural and northern communities.

The new program will be phased in a way that limits short-term gains relative to CRF funding and provides some limits on losses.  The cost of limiting losses in 2005 and 2006, along with the cost of reconciliation for 2003 and 2004, will be paid through one-time transition funding of $233 million. 

“At the macro level, today’s announcement has some appeal.  We will await the numbers and the local municipal impacts”, added Anderson.  

The Association of Municipalities of Ontario (AMO) is a non-profit organization representing almost all of Ontario’s 445 municipal governments.  AMO supports and enhances strong and effective municipal government in Ontario and promotes the value of municipal government as a vital and essential component of Ontario and Canada’s political system.

- 30 -