2008 Combined OGRA/ROMA Annual Conference, Fairmont Royal York Hotel, Toronto. Wednesday February 27, 2008.
Doug Reycraft, AMO President and
and Mayor of Southwest Middlesex
Wednesday February 27, 2008, 9:30 a.m. 
Canadian Room, Convention Floor
Fairmont Royal York Hotel, Toronto 
Presentation at the 2008 Combined OGRA/ROMA Annual Conference

(Check Against Delivery)

Thank you. I’m pleased to be here today. I want to start off by applauding OGRA/ROMA for hosting another great conference this year.

I attended my first ROMA and OGRA conferences back in 1984 – nearly quarter of a century ago – as Warden of Middlesex County. Since that time, I have attended these conferences as an MPP, as Mayor of Southwest Middlesex, and for the last two years as AMO’s President.

Though I have come here wearing numerous hats, my reason for doing so is always the same. I come here to learn from my peers and build partnerships in order to serve my community better.

That will mean different things to different people here. For some, the priority is investment in roads. For many it will be investment in water systems, public transit or other vital municipal services.

For the past year, my priority as AMO President has been to work with the Federal and Provincial Governments, and many municipal colleagues, to ensure that municipalities have the financial means to address their priorities, whatever they may be.

Part of that effort has been AMO’s Joint Fiscal and Service Delivery Review with the Province.

This spring it will release consensus-based recommendations on how to make sure that both orders of government can deliver quality services affordably and accountably.

Ontario is large and diverse, and it’s important that we take time to incorporate reliable information and analysis to this task.

We have to get the fundamentals right for all municipalities.

A key milestone in the review was reached in August when Premier McGuinty announced a phased upload of all costs related to two key social programs - the Ontario Disability Support Program and the Ontario Drug Benefits Program.

As a result, by 2011, the province will have reduced its reliance on municipal property taxes by $935 million a year.

But as I said a moment ago, this is a “milestone” – it is not the end of the story.

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

That framework goes beyond the more than $3 billion a year that municipalities pay for provincial health and social service programs and the multi-billion a year municipal infrastructure deficit that has accumulated – in part at least, as a result of current fiscal arrangements.

It also considers the full spectrum of municipal responsibilities, such as policing, court security, the farm tax rebate, the managed forest tax incentive program and so on.

Advancements in any one of these areas will affect different communities in different ways. 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.

Each municipality’s challenges are unique but we all share one thing equally.

Each of us represents the interests of our property taxpayers.  And from our perspective, this process is about reversing a trend that sees property tax dollars diverted away from essential municipal services.

And just as the problems of current fiscal arrangements affect different municipalities in different ways, the solutions to the problem with mean different things for different municipal governments across the province.

But I urge each and every one of you to keep your eye on the goal and to not be distracted by perceptions that your neighbor is more or less deserving, or perceptions that someone else is getting a better deal.

At the end of the day, we need a new framework:
• That makes sense for everyone;
• that is equitable and accountable; 
• that focuses scarce resources where the need is greatest; and 
• rewards the innovation and the leadership that many municipalities have shown in the face of existing arrangements that simply do not work.

At the end of the day, our 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.

We will only achieve it if we continue to work together and stay focused on that goal.

We are strongest when we work together.  I believe that we are stronger, more united -  and more influential -  than at any time in our history. And the credit for that is due to you.

We’ve come this far by working together. Our $3 billion gap campaign was immensely successful, and everyone in this audience deserves credit for that.  

We succeeded because each of us took up the issue in our own communities and spread the message with a unified voice that could not be ignored.  

Today the public and politicians of every stripe recognize that diverting resources from core municipal services to subsidize provincial programs is simply bad public policy. The provincial government acknowledged this in August with the ODB and ODSB uploads and we heard it again yesterday from both John Tory and Howard Hampton.

Similarly, the Joint Fiscal Review was initiated because we proposed it, passionately and compellingly, with the full support of a unified municipal sector.

Municipalities are expecting a lot from this Review. We expect to turn the page on an era of unsustainable provincial-municipal fiscal policy.

At the same time, one thing we can’t expect it to do is to erase the impact of history.   

Years of deferred investments have taken their toll on our roads, and in most of the systems and facilities our communities need to remain vibrant and competitive.

While there are varying estimates of how big the municipal infrastructure gap is, all reports are unanimous in their conclusion: 
• the gap is too large for one order of government to bear alone; 
• it’s too large to address in one generation; and 
• the burden will become untenable if we don’t take immediate action to begin addressing the urgent need for predictable and significant investments. 

We have seen progress in the form of
• The 2006 Move Ontario investment, 
• in last year’s Rural Infrastructure Investment Initiative, 
• in provincial and federal gas tax revenue sharing, and,
• in the $300 million Municipal Infrastructure Investment Initiative announced in the Fall economic statement.  

And of course we are delighted to see that $300 million for M-3 increase by an additional $150 million, as the Premier delivered Monday. AMO asked for an increase to M3 funding in our 2008 budget submission and we are pleased that the Province listened.   

But the need for predictable, long-term funding for municipal infrastructure remains.

Yesterday’s Federal Budget commitment to making the Federal Gas Tax a permanent source of funding was very good news indeed.  It builds on last year’s commitment to extend the gas tax for an additional four years through 2014.   

In 2008 this will deliver $375 million a year to Ontario’s municipalities -- and starting next year it will deliver an additional $750 million annually on a permanent basis.

This has been an important focus of AMO’s advocacy with the federal government – it is an important success for AMO and everyone in this room.  

The federal gas tax is allocated to municipalities in Ontario on an entitlement basis providing significant flexibility for municipalities to invest in infrastructure priorities including:
• roads and bridges; 
• water and waste water systems;
• community energy;
• solid waste management; and 
• transit and capacity building. 

Supporting infrastructure that leads to cleaner water, cleaner air, or reduced greenhouse gas emissions, this funding has already supported nearly 600 green infrastructure projects across the province since it’s inception in 2005.

In partnership with OGRA, AMO has ensured that Ontario municipalities are able to demonstrate the positive environmental impacts of investing federal gas tax funding on road and bridge infrastructure. This work has enabled more municipalities to direct gas tax revenue toward their most pressing infrastructure needs.

This predictable, entitlement-based funding is making a real difference in our communities.  

But we do need municipalities to clearly communicate locally the benefits that federal gas tax brings to your communities, and to demonstrate the economic and environmental benefits of federal gas tax investment.

I think that most people already believe that the taxes they pay at the gas pumps are used to sustain the roads they drive on.  

It’s our job to make sure the public understands that this funding is recent, that it is great for their communities.  

I believe that we need to give credit where credit is due, and make sure that the Federal Government has reason to believe their support is appreciated.

We know that most of you have limited staff resources. That’s why AMO has developed a gas tax communications tool kit that is designed to help municipalities get the message out.

These kits were mailed out last week and I’m asking all CAOs and Heads of Council to keep their eyes out for them.  Better yet, use the tool kit to get your message out.

AMO’s Gas Tax Project Manager is Judy Dezell – and we are lucky to have her. The Federal Gas Tax Fund represents more than just a new program; it’s a landmark in federal-municipal relations.

By necessity, Judy is often breaking new ground in her work, and from what I understand, much of what she does gets adopted nation-wide as a best practice.

By all means, if you have good news gas tax story, make sure Judy knows about it. She can help guide you through a joint promotional event with the Federal government.

Of course we are all awaiting the good news that the Federal Government and the province have signed the Building Canada Framework Agreement.

It would provide $33 billion in Federal infrastructure funding over seven years for all 13 provinces and territories.

Ontario’s municipalities would receive $3.2 billion in Federal infrastructure funding, matched by an additional $3.2 billion of provincial funding – plus another $3 billion in federal funding to cover the initial four-year extension of Federal Gas Tax Funding to 2014.

In the last couple of weeks we have heard Federal Ministers express frustration that this agreement is not signed – and on Monday and yesterday Minister Caplan give us Ontario’s perspective on the matter.

I understand that negotiations between the federal and provincial governments have been underway for some time and that they are close to an agreement.

From the municipal perspective, we would hope that both parties resolve their differences quickly and get on with signing an agreement that best serves the interests of Ontario’s communities.

There are a couple of other priorities that you will be hearing more about in the coming weeks and months.

Later this week, AMO and the Association of Municipal Recycling Coordinators will release a joint Position Paper for an Alternative Approach to Ontario’s Blue Box Funding Model for consultation. I encourage you all to read it.

We are working to improve Ontario’s Blue Box system.  At present, manufacturers of post consumer packaging are supposed to pay 50 per cent of the costs of managing their materials in the Blue Box.   

Municipalities are on the hook for the remainder, as well as the entire costs of managing these materials when they remain in the waste and litter streams.

This amounts to approximately $234 million each year – roughly one quarter of the entire municipal waste management budget – while manufacturers pay only about $60 million.

A number of manufacturers avoid costs altogether by producing non-recyclable packaging which ends up in municipal landfills.

In the end, this funding model lets environmentally irresponsible producers off the hook. Property taxpayers foot the bill in the form of inflated waste management costs, and future generations pay a price in terms of harm to our environment.

The solution is to make industry financially responsible for all of the packaging it creates. This one single change would immediately stimulate new source reduction strategies and improved packaging to reduce costs.

When municipalities entered into the terms set out by the Waste Diversion Ontario Act, they did so with good intentions and an open mind. We have made progress with the Blue Box program and we will continue to work with the Province in order to improve it.

Our next successes will be in the areas of electronic equipment and hazardous waste. Each municipality has its own unique story to tell about the fiscal and environmental costs of managing these materials. Sharing these stories can only help encourage greater responsibility from industry and legislative action.

The theme of this conference is ‘The Municipal Climate – Adapting to Change’.

In recent years, AMO has introduced a number of programs designed to put our members on a stronger footing in the face of change.

For those of you who didn’t already know about our new programs, such as MIDAS – a free benchmarking internet tool, our electricity procurement program, and municipal training sessions, I hope you took advantage of the opportunity to learn about them at our booth on this floor.

Our Local Authority Services is also developing a range of programs to help Ontario’s municipalities reduce greenhouse gas emissions by reducing their energy consumption – a significant contribution toward our shared goal of moving to a more secure, lower-carbon energy system for all of Ontario.

The new Energy Services Division of L.A.S. is working to enable Ontario municipalities to cope with rising energy costs, and environmental impacts, by developing dynamic procurement plans and integrated conservation and demand management (CDM) regimes.

And together we have a lot to offer in this area.

For example, a recent study of the Ontario municipal sector’s energy consumption revealed that municipalities spend $680 million on electricity annually (and another $275 million for natural gas).  

This 6.6 billion kilowatt hours per year of electricity consumption is more than any industrial sector in Ontario except Pulp & Paper. Offsetting the greenhouse gas emissions resulting from this consumption would require more than 281 000 trees to be planted annually – a total roughly half the size of Algonquin Park.  

Fortunately, the same study identified an energy efficient potential of 12%. 

Ontario’s municipal sector can make a meaningful contribution to the Province’s greenhouse gas and electricity demand reduction targets if critical barriers are addressed.  

LAS is hoping to overcome these barriers by functioning as a catalyst for municipalities to develop local capacity to manage their energy consumption and to also provide energy management services for those lacking such capacity.

I urge delegates to visit the LAS website or contact LAS staff to learn more about these exciting new programs.

Arming yourself with the best possible tools and programs is one way to thrive in a changing climate – remaining flexible is another.

Ontario municipalities are in a period of transition – and transitions are never completely seamless.

At the same time, we have before us an historic opportunity to lay the groundwork for a fiscal and policy framework that delivers increasingly better results for citizens and communities.

Now more than ever, we have to stay focused on our common goals.

We are a diverse sector.

We have diverse priorities and diverse needs.

It is one of our greatest strengths.

But we share our common goals of good government, sound infrastructure and sustainable fiscal architecture that will benefit municipalities of all tiers, sizes and geographic locations.

As I said a moment ago, when AMO stands up and speaks, people listen – but when all Ontario municipalities stand up and speak, people act.

For some things, we will need to cooperation of the provincial and federal governments.

In many other areas, Ontario’s municipalities will continue to do what they have always done – they will lead through innovation and example, and build the strong communities that are the foundation of this province and this country.

Thank you for your time - safe journey home.