02/27/2007

Combined OGRA / ROMA Annual Conference. Tuesday February 27, 2007.
Doug Reycraft, AMO President
Combined OGRA / ROMA Annual Conference 
Fairmont Royal York Hotel, Toronto
Tuesday February 27, 2007
Canadian Room, Convention Floor, 9:30 AM 

I’m pleased to be here today. I want to start by commending ROMA and OGRA for developing a conference program that helps us look at the road ahead – taking stock and taking care.

And I also want to congratulate all of the municipal elected officials for your success in November’s election – was it just three months ago?  I know that you will make great use of the coming days to learn and explore new ideas and shared interests.

It has been my experience – in politics and beyond – that when people of common interests stand together, they are more powerful, more influential and better equipped to advance a common cause.

My first year as an elected councillor was 1971 and there is no doubt in my mind that Ontario’s municipal governments are today stronger, more influential and better equipped to affect positive change than ever before. And never before was the need to be stronger, more influential and well equipped to affect positive change as critical as it is today.

The credit for that strength and influence goes to you, and to the work we do together. When we succeed, our residents, our businesses, our youth – all reap the reward. I applaud YOU for all your efforts and support.

And while I believe that we all deserve credit for what has been achieved in the past few years, I also believe that we have to give some credit to the Province.

Bill 130 - the Municipal Act - was an important accomplishment, the full scope of which will only be fully realized in time.  Replacing prescriptive legislation with broad and permissive powers, the new Act allows municipal governments to tailor innovative new solutions to their local needs – without running to Queen’s Park for approval at every step of the way.

This new authority comes with a demand for greater accountability.  All eyes are on us to see what we make of this opportunity.  It has taken us more than 100 years to secure this level of empowerment – and we could lose it in a fraction of that time.

While this empowerment is a welcomed change for us, it is also a change for interest groups that traditionally have gone to the Province to seek legislative or regulatory re-dress for what they believe to be a bad decision by a local government.

We can only hope that the Premier and the government will hold to their promise of ending the micromanagement of municipal government – that they will not whittle away our new broad authorities unless there is strong evidence and a compelling case that a provincial interest is at stake.

The onus is on each of us – the Province AND municipal governments to demonstrate that the new legislation truly serves the best interest of Ontario’s communities.

The Province has also begun to address the funding of downloaded services; slowly but surely, and with the promise of more to come.

The public health cost-sharing formula was changed.  75-25 is a significant improvement over 50-50 cost sharing, as it shields property tax payers from the increasing costs of safeguarding public health in our communities.

At the same time, the cap on public health budgets will mean that achieving 75-25 cost sharing will take longer than expected in some communities.

This time last year, in this very room, Premier McGuinty announced that the Province would live up to its obligation for 50:50 ambulance funding.

That additional funding – at least the first $100 million of the $150 million that was promised - IS now in our communities and it IS making a difference.

In the meantime, OMPF funding has been increased to help offset the increasing costs of downloaded services, particularly the growth in ODSP caseloads.

And, while these milestones are important, the core challenge remains – the use of property taxes to subsidize provincial services. It’s a $3 billion challenge that is simply unsustainable.

So when the Premier proposed a fiscal and service delivery review with a goal of creating the kind of structural improvements that will make our communities more competitive, we agreed to participate. Leaving such work to the Province to figure out on its own didn’t make sense.

Realistically, the Province is not going to fix the provincial-municipal fiscal gap because it feels sorry for us, or even because it’s the right thing to do (which it is, incidentally).

Rather, I believe the Government of Ontario DOES understand that strong communities are the foundation of a strong PROVINCIAL economy. It understands – just as the federal government does – that failing municipal infrastructure cannot support our efforts as a nation to compete in the global economy.

It would be irresponsible for any of us to allow the deterioration to continue.  And that means fixing the problem at its core. It means allowing municipalities to invest municipal taxes in MUNICIPAL services and infrastructure, instead of provincial programs like disability benefits and drug benefits for low-income families.

But as I said, we need to be realistic. We know that these changes will and can not happen overnight.

And we need to recognize that when structural and permanent improvements to the provincial-municipal fiscal architecture occur, the benefits will be experienced in different ways in different communities. Just as the download had different impacts in different communities.

But let us not forget, that at the end of the day, this is about our property tax payers, and it’s about removing a burden that should never have been imposed on property tax payers in the first place.

So it will take some time to find our way forward and we have a long way to go. Having said that, there are high expectations in the municipal world that the needs of Ontario’s communities WILL be recognized in the 2007 Budget.

I recently had the opportunity to make a pre-budget presentation to the standing Committee on Finance and Economic Affairs.

If you haven’t seen it, you can check it out on AMO’s website.

It contains no surprises. It builds on the case that AMO has been making for the past decade – that downloaded costs and responsibilities are undermining our ability to moderate property taxes and invest in infrastructure. We told our story again about the impact of the $3 billion gap, just as you would expect.

But we also highlighted just a few issues that affect our communities in different ways:
• Like the impact on municipal revenues of what used to be called the farm tax rebate;
• Like the impact of a Development Charges Act that no longer requires growth to pay its way; and
• Like the cost of providing services to crown lands.

What struck me most, is that these challenges are part of a provincial-municipal fiscal relationship that inhibits the ability of EVERY SINGLE municipality to thrive and to invest in its infrastructure priorities. And it impacts EVERY property tax payer in EVERY home and EVERY business in this province.

It’s true that, in some municipalities, some of these costs are offset by the OMPF.

And it’s true that, this year again, OMPF funding was increased to help with the escalating costs of ODSP and other programs. But it is also true that there is no guarantee that the OMPF will increase each and every year ahead as those costs continue to grow. And, if nothing changes, I can assure you that those costs WILL continue to grow, year after year.

Someone said to me that the OMPF is like a band aid on a wound that won’t heal. AMO believes, and I think the Province believes, that it’s time to heal the wound.

That’s why the fiscal review is so important. That’s why we are very pleased that we now have an opportunity to work with the province and the City of Toronto toward sustainable, affordable solutions that will put us back on a strong footing.

And I want to assure you that municipal representatives working on this review, both elected officials and senior municipal staff, are speaking with a single, unified voice.

AMO took care to ensure that our representatives at both the political and staff working tables have extensive expertise and a strong appreciation of rural and northern issues. I sit at the political table with three past AMO presidents, whom have both been trusted to represent all municipalities in the past.  As well there are past presidents of FONOM and NOMA.

At the staff table, we have a broad representation from rural, urban and northern as well. The AMO Board believed that these are the right people for a tough but highly critical job. They need and deserve our support.

No matter what part of the province you represent here today, your property taxpayers are contributing about 50 cents of every property tax dollar to provincial services – including education, child care, social housing, public health and social services.

So this is what I ask of you. Let us not be distracted by others, or allow our effort to fragment.

Let us stand together in common cause. 

As I said at the opening of my remarks, when people of common interests stand together, we are more powerful, more influential and better equipped to advance a common cause.  

That said, while AMO’s efforts are focused squarely on the fiscal and service delivery review, we continue in many other areas as well.

We are particularly concerned with the impact of job losses in rural and northern communities. Two years ago we sounded the alarm on the threat to Ontario’s forestry and wood products industries.  

That concern continues – and we add to it recent lay-offs by the auto makers in Southern Ontario and Hershey’s in Smiths Falls.

To those of you who are fighting these tough challenges on the front line, I want you to know that you are not alone. Economic decline in any part of Ontario affects us all – and AMO is doing what it can to ensure that this is understood by all who can make a difference.

Yesterday, AMO released its Rural / Northern Plan. Developed by AMO’s Rural and Northern Task Forces, it is designed to ensure that the Province appreciates your challenges and seizes every opportunity to promote your prosperity.

AMO has proven that it can, and often does make a difference.
 
As you heard yesterday, Minister Cansfield acknowledged that the “hours of work” regulation is causing problems for municipalities. You and I know that every day this regulation is in place, it is costing municipalities money that could be used in so many other, and better, ways.  

In December, I raised the matter with the Premier who acknowledged that the situation did not make sense.  Following that conversation, AMO has advocated an exemption for municipal vehicles, including snow ploughs.  

When I spoke with the Premier again last week, he and his officials confirmed the situation would be fixed.  So we are optimistic that this will be resolved quickly.  And we will continue to work with the Ministry of Transportation to ensure it works for you. I have not yet heard any compelling argument that these regulations should apply to municipal services.  

AMO’s hard work on the issue over the past few months is paying off as it has in other policy areas.

Earlier this month, the Province implemented AMO’s proposal to create a deposit return system for LCBO glass and tetra packs.  It will divert thousands of tonnes of glass away from landfill sites each year – and save municipalities millions of dollars annually.

And we continue to work with the Ministry of the Environment on the other key elements of AMO’s Integrated Waste Management Strategy for Ontario.

And we are working on your behalf in many, many other areas both provincially and nationally, that I will not take the time to review.
  
I want to switch gears for a moment and tell you about several new programs we have been working on for our members.

Many of you know that AMO, through our Local Authority Services, has been bulk purchasing natural gas since 1992. This has saved participating municipalities more than $17 Million in the last five years alone.

Building on that success, we are now in the process of bulk purchasing electricity to address escalating costs. I encourage interested municipalities to visit the AMO booth during the conference to find out more.  The greater the number of participating municipalities, the better the price will be for us all and the better the savings for our taxpayers.

And while you are at the booth, check out the two new investment portfolios. The Corporate Board Fund and the Canadian Equity Fund are opportunities for municipal governments to make the most of their resources by generating high returns on pooled long-term investments.

The Canadian Equity Fund, known as the One Fund, can be a wise choice, offering a rate of return that can be many, many times higher than the investment options municipalities have had to date.

In a few months, we will be launching MIDAS – our Municipal Information and Data Analysis System.  As the name suggests, it will be a database, which combines municipal Financial Information Return data that you submit to the province each year with other data pools.

MIDAS is a geographic benchmarking software system that allows municipalities to evaluate their performance for service areas by looking at the experience in other municipalities across Ontario.
 
A municipal government might use MIDAS to compare its waste management practices to those of similarly-sized municipalities.

They could then review new initiatives in any of those municipalities, print out a geographic representation of waste management costs province-wide, and use the reports along with other information sources, such as our centre for best practices to help determine what service changes might help improve services locally.

MIDAS will be launched at our annual conference in Ottawa in August, so make sure you reserve some time for a hands-on demonstration.  MIDAS builds on a very long tradition in municipal government – learning from one another. To use a familiar commercial slogan - THAT is the MIDAS touch!

As AMO’s President, I have the opportunity to see the work that Ontario municipalities do and how the depth and breadth of services offered by AMO can assist. Take full advantage of them.

Relationships get things done.  Effective relationships mean being able to agree to disagree on something and not have it detract from other activities and to see them succeed. Provincially, there have been some activities that have been difficult. OMERS devolution is one major example. We have yet to hear the sound of ANY shoes hitting the floor on this issue but I remained very concerned about the consequences.

On another scale is the extension of the designation to northern Ontario of the Aggregates Act. For those of you from Northern Ontario, you will be aware that some government officials have suggested that AMO advised the Province on that extension of designation.

I want to take the opportunity to provide some clarification for anyone still wondering if that is true.  The fact of the matter is that AMO provided input only with respect to extraction fees paid to municipalities – which had not increased since 1990.

However, AMO was never in a position to advise the government on the proposed extension of the designation of lands in the North. It would be impossible for us to take a position without speaking to municipalities and understanding the impacts on northern governments or quarry operators. We were never given the opportunity, nor were we asked, to do that.

In the grand scheme of things, however, we will manage through problems such as this, stay focused on the big picture and press on with our key objectives.

This conference is a great opportunity for us to move forward together – to learn from each other, to explore innovative solutions and find new ways to serve our communities more effectively.  

I’ve covered a great deal in the time that I have today.  However, there are three key points that I would want you to walk away with:

First, we need to give credit where credit is due, but we are keeping our eye on what still needs to be done.

Second, we are working to achieve long-term fiscal sustainability through the joint Review, but expectations remain high for the 2007 provincial Budget.

Third, good governance alone will not achieve strong communities.  Strong communities are adequately funded communities.
 
In about a month, federal Finance Minister Flaherty will deliver a budget.  We will be looking for a fair share approach for this province. And shortly after that budget, Minister Sorbara will deliver the fourth and final budget of his government’s term.

Our expectations are high. Circumstances demand it. All parties, both in Ottawa and at Queen’s Park should take note.

In practical terms, what happens in the coming months will have a tremendous influence on what road Ontario travels – let’s hope that it is a good road.

Thank you for your time today. I want to thank ROMA and OGRA for the opportunity. And I look forward to seeing you again at AMO’s annual conference in August.