On March 22, 2013 AMO President, Russ Powers, presented AMO’s 2013 Pre-Budget Submission to the Standing Committee on Finance and Economic Affairs. Below are highlights for the interest of members.
Submission Highlights:

  1. The Upload:  Municipalities continue to applaud the upload Agreement.  We need to see its continued protection, without any slippage and we thank the Premier for her commitment to it.
  2. No new mandates:  Significant costs of other social programs remain on the property tax base.  While officials at the province may point to the upload ‘savings’, municipal governments respond to the operational challenges of providing social housing, child care, source water protection plans, making accessibility standards a reality and helping to fund hospital capital.  A long list of ‘ancillary’ policies and programs hits our bottom line and eats up these ‘savings’.  We ask for no new mandates or unfunded responsibilities.
  3. The Ontario Municipal Partnership Fund:  Narrowing the gap between the relatively fiscally healthier and poorer communities must remain a constant and unambiguous aim.  Is 2014 really the best time to make another $25 million cut to the OMPF?  Does it make sense to cut funding for equalization, northern/rural communities and policing even further?  It is this group of municipalities that bore a $25 million reduction this year and will face a further $50 million cut over next two years.  This seems counter intuitive and even more so when those rural and northern municipalities with OPP must pay an 8.55% wage increase for 2014.  In addition, we call on the government to restore OMPF reconciliation for 2011 and 2012.
  4. Infrastructure Financing:  A successful solution to the infrastructure financing challenge will meet the unique needs of each region while recognizing their differing fiscal capacities.  Rural and northern municipalities need a dedicated fund for roads and bridges.  For urban Ontario, where the tax base is broader and the economy is stronger, the range of financing tools being considered would go a long way towards meeting urban transportation needs.
  5. Development Charges:  Even modest changes to the Development Charges Act to permit development charges for hospital capital and transit would be a good place to start fixing the funding challenge in urban areas.
  6. Interest Arbitration:  All municipalities – large and small across Ontario are committed to changes to interest arbitration.  What we are interested in is a system that is fair, has balance for both employers and employees and holds arbitrators to account for their decisions.  Interest arbitration decisions do materially affect the fiscal situation of municipal governments and their taxpayers.
  7. Policing Costs:  It is time to rethink how we deliver policing.  What alternatives exist regarding core and non-core policing functions?  Are there cheaper alternatives to delivering court security? Could community safety education, crime prevention and assisting the victims of crime be more efficiently delivered?  What efficiencies can be found in the operations of the Ontario Provincial Police?  AMO remains committed to working with the government and others on these issues, however, we cannot afford to wait long for solutions.
President Powers also wrote to the Minister of Finance to highlight the importance of other key issues.  He noted last week’s introduction of new legislative tools to improve the collection of Provincial Offences Act fines as an excellent example of provincial-municipal problem solving.  Some of the other ideas we’ve offered include:
  1. More efficient public services:  Greater efficiencies are possible with the recommendations of the recent social assistance review and how these services are delivered.  AMO is committed to exploring these options provided any changes do not add new burdens to the property tax dollar.  Similarly with Dr. Samir Sinha’s report on proposals to better serve the needs of our senior population; AMO is keen to explore delivering better services in better ways, but not on the back of the property tax dollar.
  2. Infrastructure Financing:  Since 2005, AMO has administered Canada’s Gas Tax Fund for every municipality in the province except Toronto.  It is the best tool for long-term funding because it is predictable.  It permits municipalities to be responsive to local needs, without grant applications, review and approval.  It trusts municipalities to use the funds for its capital needs and sets out a transparent, accountable and cost efficient on-line administration that meet all of its audit requirements and program objectives.  It is a measure of how all infrastructure programs, both federal and provincial can be delivered.
  3. Simplifying Reporting Requirements:  One of the matters that the Drummond Report highlighted was the amount of provincial oversight and municipal reporting that is required but not usefully analysed.  One municipality tallied the reports it provides to the province on a yearly basis.  It submits the following to provincial ministries:  96 monthly reports, 100 quarterly reports, 6 semi-annual reports and 68 annual reports.  This is a total of 270 reports annually plus an additional 16 audited statements, plus the annual Financial Information Return.  From AMO’s perspective, there is plenty of room to simplify reporting requirements while maintaining accountability and better coordination of these activities in straightforward ways.  The regulatory and reporting pendulum must return to the middle.  We are calling for the province and municipalities to figure out a better way.
  4. Joint and Several Liability:  Liability reform remains an ongoing need.  Joint and several liabilities translate into a punishing financial burden for many municipalities with fractional responsibility for an individual’s loss.  Nothing will focus attention on the issue more quickly than when insurance companies cease offering municipal coverage.  We need to avoid this worst case scenario.  The complexity of this issue is no reason to shy away from finding a better solution as many other jurisdictions have already done.
  5. Provincial Land Tax:  The property tax inequities that exist in the north where municipalities border unincorporated areas with low taxes and minimal services needs to be addressed.
  6. Heads and Beds and Dam Payments:  Municipalities which host post-secondary institutions are increasingly disadvantaged by a payment-in-lieu regime that has remained unchanged in over twenty years.  This includes provincial facilities such as universities, colleges, correctional institutions, hospitals and facilities for the disabled.  Adding to that, for the next three years the province is freezing payments to municipalities which host hydro-electric facilities.  These costs are on the backs of municipal property taxpayers in these communities.  The province needs to pay its own bills.
  7. The direct appointment of municipal representatives to the MPAC Board:  Here’s an easy opportunity to streamline a process and recognise municipalities as a mature order of government. Currently AMO submits a list of names to the Minister of Finance from which the Minister chooses municipal representatives to the MPAC Board.  Having municipalities choose their representative directly would simplify the process considerably.
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