2008 Ontario Association of Police Services Boards (OAPSB) Annual Conference, River Garden Inn, Stratford, Ontario. April 26, 2008.
Doug Reycraft, AMO President and Mayor of Southwest Middlesex
April 26, 2008 at 11:00 a.m.
Trillium Hall, River Garden Inn
10 Romeo Street
Stratford, Ontario 

The Ontario Association of Police Services Boards (OAPSB) Annual Conference

(Check Against Delivery)

Thank you.  It’s a pleasure to be here.

Conferences like this are all about sharing information and learning from each other in order to serve the people of Ontario better.

It’s a goal that AMO shares – and we look forward to continuing to build a partnership with your organization in order to achieve it.

I don’t have to tell you that municipal governments and Police Services Boards have a number of common interests. That’s inherent to our job descriptions.

We both seek safe communities, a high quality of life for residents, and sustainable sources of revenue to support the services we provide.

I think everyone in this room would agree that policing is not just about dollars and cents. It’s about the safety of our citizens and businesses and the quality of life in our streets – things that we can’t put a price on.

That’s why the supplemental benefits provisions that were grafted onto the Province’s devolution of OMERS were such a setback. If adopted, supplemental benefits will significantly increase labour costs, regardless of a municipality’s ability to afford the increases.  

As we have seen with many arbitrated decisions, once a benefit is provided by one collective agreement, it can whipsaw across the province, by arbitration if not through local negotiation. 

Supplemental benefits could cost employers hundreds of millions of dollars annually. What is certain is that the less prepared we are to manage challenges such as this, the more they will cost us – in both direct costs and lost opportunity.

Whether we are charting the course of OMERS’ future, or negotiating at the bargaining table, we employers had better do our homework.

Labour unions are well-funded and well-organized when it comes to securing the best deal for their members. They do a very good job of representing the interests of those members.  

We bargain with a relatively small number of unions that each has a large membership list.  As a result they have excellent economies of scale when it comes to funding their operations and negotiating strength.

It should be obvious to all that united we stand, and divided we pay. 

That’s why AMO developed MEPCO – the Municipal Employers Pension Centre of Ontario.  We have recently set up MEPCO as a separate corporation – for several reasons but primarily two. 

Bill 206, the legislation that divested OMERS from the province to employers and employees, imposed a new responsibility on AMO. We are now required to make appointments to both the Administration Corporation and the Sponsors Corporation – and with that obligation came an assumed responsibility to support our appointees. But not all municipalities are OMERS employers so we needed to separate AMO’s advocacy role on matters of interest to all municipal governments from the new OMERS role. 

Second, we felt that a separate corporation would allow us to build on common interests with other employer groups when it comes to OMERS. MEPCO’s corporate structure permits the addition of other employer groups. By combining talent and resources of many employers, we can achieve economies of scale so that we can represent employers’ interests more effectively and more efficiently.

MEPCO is just one example of how municipal employers benefit by working together – and we will pursue this further.  

Recent work around arbitration and rising emergency services costs is another way that we work together. Emergency service costs are rising faster than the rate of inflation, the cost of living and increases in other municipal services – a phenomenon that is largely attributable to increases in salaries and benefits. While all employees should have a fair wage and safe working conditions, from a municipal corporate perspective, the growth in emergency service costs is not sustainable. 

These increases do not result in improved local services and, from the municipal perspective; they divert funds away from other important responsibilities and priorities. 

We must work together to show the Province that the current approach to arbitration undermines our ability to deliver not only first-rate emergency service for our communities but the other services that citizens and business community need – clean water, a transportation system that works to move people and goods, waste systems that do not compromise the environment and community facilities and programs that help contribute to healthy people. 

Current fiscal and service delivery arrangements with the Province continue to put pressure on municipal budgets. Subsidizing provincial programs and services through the property tax base is neither good public policy nor good fiscal policy.  Court security is an example of this. 

The cost to your Boards of providing Court security should be borne by the province, plain and simple.  Municipalities aren’t expected to pay for the security systems in homes, businesses and industries and they shouldn’t be expected to pay for them in the province’s courthouses either.  To my understanding, there was no justification for this download when it occurred and none today. Much like prisoner transportation costs, court security is a provincial responsibility and should be paid for by the Province. AMO shares the opinion that these are not core policing services – and revenue is being diverted from core services to support them.

Another shared concern is the impact of Provincial and Federal regulation on our emergency services budgets. Too often provincial and federal governments implement new priorities or revise standards while leaving the challenges of implementation – and the expense – solely to us.  

Often these new, unfunded responsibilities can only be met by increasing property taxes, reducing other municipal services, or reallocating resources from local priorities to Federal or Provincial priorities.

The supplemental benefit provisions for OMERS offer a stark example of an unfunded responsibility. However, the combined costs of many smaller impacts - such as ever changing provincially established standards - are just as worrisome.

One of the most important opportunities for municipalities and their police service boards to work together is in demonstrating this to the Province.

History tells us that when we are informed, work together, and develop public policy that makes sense for all orders of government, and the public, we get results.

Working together through AMO and other municipal associations, our $3 billion gap campaign launched in 2005 sent a powerful message that infrastructure, prosperity and quality of life all go hand in hand.  It focused on the impact on municipalities resulting from the use of property tax dollars to pay for provincial health and social services.  

The result of that practice, unique in Canada, has been a massive infrastructure deficit and the highest property taxes in the country - $237 per person higher than the national average.

The Ontario Government has taken this to heart. In 2006 they agreed to the Provincial Municipal Fiscal and Service Delivery Review to determine exactly how to improve the situation. And last month’s Provincial Budget was another powerful indication of that; allocating $1 billion for municipal infrastructure, including $400 million for roads and bridges, and a variety of other initiatives that benefit Ontario’s municipal governments. 

This most recent investment builds on the significant steps that had already been taken to achieve fiscal sustainability for municipalities and repair infrastructure throughout Ontario.  

Steps that include:
 The phased upload of the costs of the provincial Ontario Drug Benefits program and Ontario Disability Support Program.  Announced last August, when fully implemented, this step will save municipal tax payers $935 million each year;
 Guaranteed stable funding for the 2008 Ontario Municipal Partnership Fund;
 An additional $450 million in infrastructure funding through the Municipal Infrastructure Investment Initiative; and, if possible, 
 Dedicating a portion of a 2007/08 budget surplus toward municipal infrastructure funding on a per capita basis.

Why does that matter to you?

The fact is that infrastructure investment is one of the greatest challenges that Ontario’s municipalities have faced during the past decade. And it is the direct result of downloading provincial health and social service costs onto the municipal property tax base.

I know this is a cliché, but in short, it means we have had to rob Peter to pay Paul.  

You see this fact in the struggle to find resources for emergency services – but you also see it engraved on the roads, bridges, transit links and water systems across this Province.  Ontario’s municipal infrastructure deficit is a multi-billion dollar annualized deficit.  And fixing it is a responsibility shared by all orders of government.  

AMO has its sights squarely fixed on some basic priorities:
1. Upload income redistribution costs to the province where they belong – allowing municipalities to invest their own revenues in municipal services;
2. Increase federal and provincial investment in municipal infrastructure; and
3. Restore fiscal balance – so that year after year, Ontario municipalities have the revenue they need to pay for their core responsibilities.

Any progress we make in these three areas is good news for providers of police services.

How are we doing?

Well, to date we have seen commitments to upload almost a billion dollars in health and social service costs, and significant additional one-time investment in infrastructure. 

We have secured both Provincial and Federal gas tax revenue for infrastructure investment – and both governments have increased their infrastructure investment generally.

And finally, we are making progress through unprecedented, bi-lateral negotiations with the Province.

These discussions are taking place under the Provincial-Municipal Fiscal and Services Delivery Review.  

In June, the Provincial-Municipal Fiscal and Service Delivery Review will release consensus-based recommendations on how to make sure that both orders of government can deliver quality services affordably and accountably. 

Where the recent budget demonstrated significant one-time investments, the Review is designed to provide a sustainable destination – a new provincial-municipal fiscal model based on good public policy and sound principles - and a road map that gets us to where we are going. 

The process has taken time; we knew it would from the beginning.  Important work and real change usually does. 

Ontario is large and diverse. It’s important that we take time to incorporate reliable information and analysis to get the fundamentals right for all municipalities.

Ultimately we are working towards a complete package that provides a much better fiscal framework than we have today.

That framework needs to go beyond what municipalities pay for provincial health and social service programs and the multi-billion a year municipal infrastructure deficit that has accumulated, in part, as a result of current fiscal arrangements.  

It is also considering the full spectrum of municipal responsibilities, such as court security, services to crown lands, farm tax policy and so on.

No two municipalities are affected exactly the same way by the current fiscal relationship. So advancements in any one of these areas will affect individual communities differently. And, to be sure, I don’t think anyone could reasonably expect that the Review will solve all of our problems.  

It certainly will not solve all of our problems overnight. The current economic climate is a factor that we must consider, not just in terms of the provincial capacity but also the municipal capacity and the exposure we have in any economic downturn.   

From the municipal perspective, the Review demonstrates how the trend to have property tax dollars diverted away from essential municipal services will be further reversed. 

We are working to create a new fiscal framework:
• That makes sense for everyone;
• That is equitable and accountable; 
• That focuses limited resources where the need is greatest; and 
 That embraces the innovation and the leadership that many municipalities have shown in the face of existing arrangements that simply do not work.

To reiterate, the common goal is a new and sustainable provincial-municipal financial relationship that is based on the principals of good public policy and good fiscal policy – a relationship that is affordable for both orders of government.

In that respect, we are endeavouring to achieve systemic changes that will benefit property taxpayers and service providers – including police service boards - in municipalities of all tiers, sizes and geographic locations.  

I believe in giving credit where credit is due – and the Province deserves credit for the strides it has taken already towards a more sustainable provincial-municipal fiscal framework.   But municipalities deserve credit as well.

Municipalities across the province have loaned us staff to serve on the Review’s various committees and working tables who have expert knowledge of the intricacies of municipal government to work with our policy staff at AMO.  And municipalities have worked tirelessly to educate MPP’s and the Ontario public. We are succeeding because we work together to promote policies that are based on reliable information, good public policy, and pragmatism. We succeed because each of us advances issues in our own communities and spreads a unified message that cannot be ignored.  

Today, the public, and politicians of every stripe, recognize that diverting municipal resources from core municipal services to subsidize provincial programs is simply bad public policy.  

Achieving that recognition would have seemed an insurmountable task not too many years ago. However, by standing together and staying focused on our common goals, we are achieving far more together than we ever could as individual communities.

Our voice can only be amplified by building stronger partnerships with Ontario’s Police Service Boards. I look forward to continuing the important work we have started, and to building on that work in the future.  

Thank you, and enjoy the conference.