03/25/2008

Finance Minister Dwight Duncan delivered the 2008-09 Provincial Budget.
Background:

The 2008 Provincial Budget, tabled in the Legislature today by Finance Minister Dwight Duncan contained a new $1 billion infrastructure investment package for municipalities including:

• $400 million for municipal roads and bridges to be allocated based on a municipality’s share of Ontario’s road network in relation to population;
• $497 million for public transit in the GTA;
• $100 million in funding for repairs to 4,000 social housing units (announced on March 17th).

This funding will be allocated to municipalities by the end of March 2008.

The Budget also includes a two per cent social assistance rate increase for Ontario Works and Ontario Disability Support Program recipients. Municipalities will be shielded from these costs until January 2009. In 2009, the 2 per cent rate increase will cost municipalities approximately $20 million. The municipal impact will be reduced in 2010 and 2011 when the ODSP benefits are fully uploaded.

Other significant measures include:
• $30 million over four years for rural broadband expansion;
• An additional $30 million over four years for the Rural Economic Development (RED) program;
• $16 million to fund 35 projects which connect designated municipal roads with provincial highways;
• An acceleration of the Business Education Tax rate cuts for northern businesses. The rate cut will result in savings of more than $70 million and advances the full effect of the cut by 4 years; 
• Increasing the funding from $60 million in 2007-08 to $100 million in 2011-12, for the Northern Ontario Heritage Fund Corporation.
• $1 billion over five years for a new Senior Homeowners’ Property Tax Grant of up to $500 a year by 2010 for seniors with low and moderate incomes who own their homes;
• $16 million over four years to enhance the Ontario Property and Sales Tax Credit program to ensure that senior couples receiving the guaranteed minimum level of income from governments receive the full benefit of these credits this year; and
• Over $23 million in 2007-08 to support the development of source water protection plans in 19 Conversation Authorities across the province.

Consistent with the recommendations of the Provincial Ombudsman, the government will introduce legislation that would place the onus on MPAC to prove the accuracy of property assessments that are appealed to the Assessment Review Board (ARB).

The initiatives announced in today’s budget continue the transformation of fiscal arrangements between the Province and municipal governments emerging from the current Provincial Municipal Fiscal and Service Delivery review. Those changes have included:

• The $935 million upload over four years of the costs of the provincial Ontario Drug Benefits (ODB) program and the provincial Ontario Disability Support Programs (ODSP). This important milestone was announced by Premier McGuinty at the 2007 AMO Conference.
• A $44 million Stable Funding Guarantee for the 2008 Ontario Municipal Partnership Fund (OMPF) allocation.
• The $450 million 2008 Municipal Infrastructure Investment Initiative (MIII), which will be distributed to municipalities by March 31, 2008.
• Bill 35, the Investing in Ontario Act, which if passed, would see municipal infrastructure benefit from any confirmed 2007-08 provincial budget surplus over an initial $600 million allocated to the provincial debt. This initiative could provide up to $2 billion in municipal infrastructure investment in 2008.
  
AMO commends the government for its much needed infrastructure investments and the uploading of significant social service program costs. These initiatives combined with today’s Budget speak to the objectives of the ongoing Provincial-Municipal Fiscal and Service Delivery Review.

Through the Review AMO is seeking to:
• secure sustainable, accountable, and transparent provincial-municipal fiscal arrangements;
• ensure that investment in municipal infrastructure meets the current and future needs of Ontarians; and
• improve the quality of municipally managed human services in Ontario.

The Review’s consensus-based report is expected in late June 2008.