03/28/2009

Toronto, Ontario, March 28, 2009. AMO welcomed a commitment in the Provincial Budget to ensure that the harmonization of the GST and PST will not increase costs for the municipal sector as a whole.
The Government is moving to harmonize the federal GST and the provincial PST into a combined new rate of 13%.  The Budget confirms that this change will be “fiscally neutral” relative to the amount of PST currently paid by municipalities.  This means that the municipal sector as a whole will not be paying any more sales tax as a result of the harmonization of these taxes.  Some municipalities will experience added costs depending on the nature or their operations. The provision of the current federal GST rebate for municipalities will remain in effect.

“We are relieved that the Budget provides assurances that sales tax harmonization will not result in increased cost for Ontario’s municipal sector,” said AMO President Peter Hume.  “We will need to work with the government to better understand how the impacts on individual municipalities can be addressed.”   
The Budget also confirms infrastructure investments will be made by the province to match the infrastructure stimulus commitments announced in the Federal Budget.  Some details have been announced previously including more than $600 million in matching social housing investments as announced on March 20, 2009.  It includes a figure of $6.8 billion over the next two years for “new short term stimulus investments”, the majority of which will be for municipal infrastructure.  

“AMO’s members are ready to put infrastructure funding to work quickly in every part of Ontario,” said Hume. “Investing in municipal infrastructure improves Ontario’s quality of life, leverages improved economic productivity and creates jobs in communities across Ontario.” 

AMO is a non-profit organization representing almost all of Ontario’s 444 municipal governments.  AMO supports 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 -