08/14/2006

2006 AMO Annual Conference, Ottawa Congress Centre and Westin Hotel, Ottawa. Monday, August 14, 2006.
President of the Association of Municipalities of Ontario 
2006 AMO Conference
8:30 AM, Monday, August 14, 2006
Ottawa Congress Centre and Westin Hotel
Ottawa

(Check Against Delivery)

Thank you Larry. I am pleased to rise and report to the delegates – and to thank all of you for coming to this year’s AMO Conference.

AMO’s board has been busy conducting business throughout the weekend. So from my perspective, I can say that this is already shaping up to be a very successful conference.

An incredible amount of effort goes into the organization and staging of this annual conference. Looking at all this, you would be surprised to learn how few people organize it and work behind the scenes. Dedicated people put in long hours to make this possible – and I want to thank them on behalf of the Board and all of you.

AMO has worked hard to assemble experts, and create forums, that will help you address some of the most pressing issues that we all face as municipal leaders in Ontario.

Most importantly, this year’s conference seeks to take stock of what progress has been made to create a new municipal landscape in Ontario.

To truly appreciate the theme of this year’s Conference, you have to consider where we have come from.

To that end, I want to quote Mayor Mulvale’s final address as President in 2004. She said:

“For all the complexity bound up in talk of a ‘new deal’, its success will simply be measured by our residents’ ability to see its results in our streets, parks and waterways.
    
For its part, the Federal Government is exploring remarkable initiatives that would open new doors for municipalities with respect to affordable housing, immigration, health care, and new revenue sources, through fuel tax revenue and other means.

We must make the most of each and every opportunity that arises, and not get mired in a few disappointments. We must keep our eye on the end game. That goal is sustainability.”

(pause)

Much has happened over the two years that has passed since Mayor Mulvale made those remarks. Much of it has been positive and I believe we have made the most of our opportunities.

We have also had disappointments, but they are not holding us back.

I believe that AMO pushed hard when we needed to push… and we gave credit when credit was due.

Now we are three years into the provincial government’s mandate, and just over a year away from the next provincial election.

We also have a new Federal Government here in Ottawa.

Under the circumstances, we felt that the time was right to take stock of how far we have come in our effort to achieve empowered, effective and sustainable municipal government.

Overall, we have made meaningful progress.

We have secured approximately $1.9 billion in Federal gas tax revenue for Ontario municipalities over five years. While the distribution formula triggered some debate nationally and provincially, we now have a more than $172 million in new revenue contributing to Ontario communities.

There is no doubt that public transit systems are important. Just look at the number of smog days and how far it moves from southern Ontario up into northern Ontario. Investments to increase transit ridership benefit us all and the variety of funding agreements is good.

However, the need is still greater than the funds we are receiving. That is why we continue to push for a much longer term, sustained investment approach by the Federal and Provincial governments. Competitive, application based programs such as COMRIF just don’t do the trick.

The Federal gas tax approach – upfront knowledge of the committed funds, combined with investment and accountability rules -- is what works for infrastructure investment. It works best for our capital planning. It works best for the construction industry. And it demonstrates respectful, mature government relations.

In addition to new gas tax revenue, we have also seen steps to address the devastating impact of provincial downloading.

Most notably, the Province increased its funding for land ambulance services by $300 million over the next three years. For years, AMO has been working to convince the Province to pay its fair share of ambulance costs.

Have there been disappointments? Yes. We’ve had a few.

We still face huge capital replacement costs for social housing. We have not yet secured a review of development charges, which would ensure that new growth helps invest in new capital facilities, such as hospitals.

In the coming months and years, we will need to work together very closely to minimize the impacts of Bill 206 – the OMERS legislation.

Regardless of what anyone tells you, there is no such thing as free pension benefits or free benefit enhancements.

I want to acknowledge the enormous and powerful support we received from you and your Councils regarding Bill 206.

(Pause)

Importantly, our disagreement with the Province on Bill 206 has not affected our ability to work cooperatively in other areas.

The Memorandum of Understanding and our regular MOU meetings with the province continue to be a great step forward for both orders of government. The municipal role at these meetings is to provide insight on how a proposed government policy might impact municipal governments and our property tax payers. The meetings also permit us to present issues of priority, such as ambulance funding or the planning system. Sometimes our advice is taken and sometimes it is not. However, the MOU meetings always allow us to share ideas and perspectives, coordinate efforts more effectively, and help reduce surprises.

Ultimately, the MOU meetings are achieving their real objective – which is better informed government decisions.

During the past year, some of this work has related to Municipal Act amendments that the Province introduced in June.

The proposed changes would move Ontario toward a more mature relationship with municipal governments by reducing Provincial micro-management and by providing broader, accountable authority for municipal governments.

Broader authority and less prescriptive regulation reflect the Province’s appreciation that municipal governments are respected, responsible, and accountable.

To some degree, the amendments will help strengthen good governance, encourage economic growth, and promote a higher quality of life in our municipalities.

The new Act stops short of offering municipalities broader taxation authority. While more permissive taxation tools would not have begun to offset the high cost of providing downloaded provincial community health and social services, it was viewed as a potential source of some assistance.

Once you have worked through all the breakthroughs and the few setbacks of the past two years, you are left with one fundamental question.

Are the financial structures that underlie Ontario’s Provincial and Municipal relationship sustainable?

By any honest assessment, they are not.

At a structural level, Ontario’s municipalities are still financed by a system that benefits the Provincial Treasury first, and core municipal functions second.

Ontario continues to be the only jurisdiction in North America that funds Provincial health and social service costs through municipal property taxes. These programs cost municipalities more than they receive from the Province to deliver them. As a result, we have a $3 billion revenue gap that saps resources from the core programs and services that municipalities are supposed to perform.

The Premier acknowledges the problem and has said that he will work with us to begin addressing it. At the rural conference earlier this year he remarked that in an ideal world the Province would upload the downloaded services because it is the right thing to do. Property taxes should not be used to pay for soft services, such as social assistance. However, the Premier also said that he can’t change that overnight.

We recognize this.  We’ve said it many times to the Province – at pre-budget consultations, at the MOU, and at every meeting with anyone and everyone at the Province.

However, there is nothing wrong with working toward that ‘ideal world’.

AMO’s position on this problem is clear and pragmatic.

While a solution cannot be achieved over night, we know that Ontario’s future prosperity is at risk if we don’t begin to pursue and plan solutions now.

Today, the government blames Ontario’s energy problems on the failure of past governments to plan for the future. Will the result be any different if today’s government fails to plan for the future viability of municipal government and the financing of basic municipal infrastructure, programs and services?

That is our call to action to the government – and to those who hope to be the government.

Work with AMO to begin planning how Ontario will achieve fiscally sustainable municipal government over a manageable period of time.

It’s that simple. It makes sense and it’s the right thing to do for this Province.

Premier McGuinty has made a strong commitment to addressing the “fiscal architecture” shared by the Federal, Provincial and Municipal orders of government. AMO fully supports him in that effort.

To summarize, we have made progress and there have been investments. However, the fundamental problems that undermine our success remain.

All eyes need to stay focused on the ultimate goal, which is financial sustainability.

(Pause)

As you know, author and pollster Allan Gregg is about to give us his insights into what’s happening in Ottawa these days.

Before he takes the stage in a few minutes, I want to thank you all for the opportunity to serve as the President of this Association. The past two years have been memorable and I truly appreciate the support that I have received and the relationships that I have built along the way.

In particular I want to thank AMO’s staff and Pat Vanini. We are well served by them.

And I want to thank my Council and my staff at the Region of Durham. They have stood behind me and assisted me at every step. It is deeply appreciated.

We are going to be loosing some board members who are not seeking re-election. I want to thank them for the tremendous contributions that they have made – and for supporting me as President. We wish them well in their future endeavors.

To those who are seeking re-election, and to those who are seeking to serve for the first time, I want to emphasize that your belief in AMO and what we are about is much appreciated.
 
Obviously, I have the pleasure of congratulating Doug Reycraft already. He will become AMO’s next President by acclamation -- and he does so at a time when AMO’s membership is strong, active and engaged. I see his acclamation as a great vote of confidence for Doug and I know that we will all be well served by him over the next two years.

For my part, I look forward to working with him in my capacity as past-President, as Ann Mulvale has graciously, and capably, supported me over the past two years.

Finally, I want to wish you all the best of luck in the upcoming municipal elections. The people of Ontario are well served by their municipal officials. I admire the commitment that you make to your communities -- and I appreciate the opportunity that I have had to contribute to our community of Ontario municipalities.

Thank you.