05/10/2013

Remarks by Russ Powers, AMO President and Councillor, City of Hamilton. May 10, 2013, Charles W. Stockey Centre, Parry Sound, Ontario. Presentation at the Federation of Northern Ontario Municipalities 53rd Annual Conference.

(Check Against Delivery)

 

Good morning and thank you for the introduction.

Parry Sound is always lovely. But Parry Sound in May is something else.

I’m a city councillor in Hamilton. Most of the time when people from Hamilton head north to Parry Sound, it’s to get to a cottage.

And some of your residents, drive south to Parry Sound, to get to their cottages. Welcome to the near north.

I want to thank a few people who help to shape AMO’s understanding of northern priorities through their service to FONOM and as members of AMO’s Board of Directors.

I’ll start with Jamie McGarvey, Mayor of Parry Sound. Thank you and the other Parry Sound Area municipalities for hosting us in your beautiful town.

And to Al Spacek, President of FONOM - thank you and your team for your leadership at this conference, and your ongoing counsel with AMO.

I want to thank the rest of FONOM’s executive team:

  • Mac Bain from North Bay;
  • Tom Laughren from Timmins; and,
  • Lou Turco from Sault Ste. Marie.

The work you and the FONOM Board Members do to represent the interests of Ontario’s northern communities is critical.

I also want to thank Ron Nelson, outgoing NOMA President, as well as incoming NOMA President, and AMO Board Member, Dave Canfield.

Both of these gentlemen have made and continue to make significant contributions to the north and AMO.

AMO has always worked closely with regional municipal associations across the province – and we need to keep working together as we move forward.

Together, over many years, our associations have worked hard to open doors at Queen’s Park. We know it’s important for municipalities to be at the table when policy matters are being discussed.

That is why the Memorandum of Understanding Agreement is so important, and it truly forms the foundation of our relationship with the Province.

Simply put, it requires the Ontario Government to pre-consult with AMO before making changes that affect our responsibilities and often impact our budgets.

Sometimes, good advice is taken. Sometimes it isn’t. We have seen both successes and challenges with this process and with our relationship with the Province.

From time to time, people have told me that our relationship with the government appears to be too close.

I want to emphasize that we will always strive to have a productive and strong relationship with the Provincial order of Government.

We maintain a respectful relationship so that we can look across shared tables and speak frankly and directly.

It only makes sense. It gets results for our communities.

Through this process, we need to offer strong proposals and practical solutions.

Over time, our proposals turn into public policy that addresses the needs of our communities. 

Our communities deserve our persistence to get results.

Complaints – no matter how valid – tend to fall flat. I’m sure you can relate to that – and we owe it to our communities to go further and offer solutions.

Perseverance and hard work are necessary traits - and northern communities are well known for that.

FONOM and northern municipalities provide good ideas, and unique perspectives that help AMO better serve Ontario’s Northern communities.

And with that input, the Province is aware of exactly where we stand on just about every aspect of municipal financial interests.

We did see some progress in the 2013 Ontario Budget, the first budget from Premier Wynne and Finance Minister Sousa.

This is a strategic budget for the government.

They knew that passage would be in doubt. As a result, we expect that some new policy initiatives may evolve after it, assuming that it does pass.

They have shown some flexibility and the Wynne government is still developing policy.

We expect there will be surprises. We saw a taste of that when they agreed to save the Federal Government’s Experimental Lakes Lab.

Let’s start with what was in the budget.

AMO was pleased to see a new $100 million infrastructure fund for small, rural and northern municipalities. The new fund will be available October 1st of this year.

Last week at the Ontario Small Urban Municipal Conference, Premier Wynne emphasized that she hoped to make this fund permanent in 2014, a repeat of what is said in the Budget.

That is exactly what they have done with the provincial gas tax.

Permanency offers municipalities a predictable and stable source of revenue.

Provincial gas tax revenue provides more than 90 municipalities with a total of about $321 million annually.

These are starting points that help to address the infrastructure challenges municipalities face.

Infrastructure was a key part of our pre-budget submission and we are glad it is receiving attention from the Ontario Government.

I referred to these commitments as a first step in a comprehensive transportation plan for rural and northern Ontario.

Municipalities are ready to work with and consult with the Ontario Government on transportation and infrastructure investments.

In fact, we need all levels of government to cooperate and tackle this challenge.

Safe, reliable roads and bridges are economic lifelines that connect Ontario’s communities.

Municipalities own more than 65% of Ontario’s infrastructure – far more than our Provincial and Federal counterparts, but we are in the weakest position to pay for it.

In 2008, it was determined that it would require $6 billion in new investment each year for 10 years to address that funding gap.

It doesn’t matter where in Ontario you are… property taxes alone cannot fund that.

The Premier has mentioned alternative sources of funding. This was a focus in April when she spoke about the Province’s plan for improving transit and transportation in the Greater Toronto Area.

We don’t know what that might look like.

Whatever solutions come to the GTA may not be transferable to other parts of Ontario.
 
The different regions of this province are unique, and we need tailored solutions that work for our communities.

Part of the solution will have to involve sharing revenues.

We’ve made great progress in this area with the Federal Gas Tax. It has become a permanent, predictable source of funding for infrastructure.

In the last Federal Budget, we learned that it would be indexed at two per cent per year, to protect the value of this investment over time, and to help cushion the way that the national formula benefits faster growing provinces.

The fund will also have new project categories to invest in, allowing each municipality to decide exactly where funds are needed the most. That kind of flexibility is important.

Canada’s Gas Tax Fund is one of our success stories. Now we can also add the newly permanent Provincial Gas Tax to that list.

We need to see more. We’re moving forward and we need to keep going.

We have to look at other ways to share revenues – ways that make sense for communities in the north.

Ontario’s prosperity has long been supported by the resource economy, and obviously, it has been the economic engine for many of your communities.

Going forward, we need to make sure that you’re seeing your fair share of benefits from this economy, so you can support the infrastructure that it requires.

There is plenty of work to do, but we’re ready. As always, we welcome and encourage your input as we go forward.

Importantly, the Ontario Budget honours the 2008 agreement to upload Provincial social service and court security costs from the municipal property tax base.

Property taxes should fund services that support property.

The Province’s much larger and more dynamic tax base, and income taxes specifically, should fund income redistribution programs such as social services.

Municipalities cannot afford to fund social services – particularly in the north, where the costs are exponentially high. Many of you see this in your communities.

That’s what the uploads are all about. Social services and court security costs didn’t belong to the property tax base to begin with – and when we had to shoulder them, it diverted funding from areas that needed it most.

Recent history has shown that we were wise to push for that agreement.

The Budget estimated the value of the upload to the municipal sector at nearly $1.4 billion in 2013.

That is $1.4 billion that we do not have to find in our budgets.

This is significant – particularly when you consider that its value in 2008 was estimated to be $245 million.

I can’t imagine how municipalities would be able to make any capital improvements without the upload.

We need to see those gains protected. The 2008 agreement must be honoured, on schedule, as planned.

We know that the uploads affect different municipalities in different ways.

And we knew it would create challenges for both the Province and municipalities.

We knew it would involve sacrifices. The upload agreement included cuts to the Ontario Municipal Partnership Fund over time.

Still, AMO is disappointed that the Province is going ahead with this year’s $25 million cut to OMPF transfers.

Policing costs are ballooning, social service increases are proposed and MPAC is being reviewed by the Province.

We believe that the OMPF transfer cut should be paused until they have a better sense of what these changes would cost.

We will not rest on this. We know that it makes sense to keep OMPF funding in place for now and we are making that case forcefully.

We will also continue to fight for tools that will give municipalities more control over their costs.

The Ontario Budget emphasized the Ontario Government’s success in controlling costs, particularly with respect to wages and benefits.

It notes that the Province has been more successful than municipal governments.

We know.

For some time, municipalities have been calling on the Province to provide the tools that they need to achieve similar results.

There is an undeniable need to balance Ontario’s interest arbitration system.

Current economic conditions have not prevented interest arbitrators from awarding extremely high wage and benefit increases for emergency service employees.

The OPP can expect an 8.5% wage increase in 2014.

These increases will continue without changes to Provincial legislation – and four attempts to balance the system have failed in the past 12 months.

We’ve been clear on what is needed in this area. The Premier says she wants to work with municipalities. This is an opportunity to work together.

The government knows there is a problem and they know what we feel is needed to fix it.

Each new attempt to improve interest arbitration has built upon lessons from the last.

We have done our homework – and we have made balanced proposals.

The Conservatives incorporated much of our work into a comprehensive Private Members’ Bill last month. They added some of their own policy, but it was a good starting point.

We were clear that we wanted the government and the NDP to take it seriously – yet it was defeated at Second Reading.

In other words, it didn’t even get off the ground – let alone to Committee, where it could have been developed further to address any issues or problems.
 
We could understand this dismissal if there was nothing of value in the Bill.

And we can accept that other parties had concerns about the Bill. We had some concerns of our own.

However, the Bill provided a building block. It was a way forward.

The next move will probably come from the Government benches.

It needs to be practical and effective. It has to restore balance.

Speaking of balance, I want to discuss financial sustainability and predictability.

I don’t need to tell anyone in this room that these are top municipal priorities.

We have looked at these themes during this conference and I would like to expand on them as well.

We’re all facing fiscal challenges. But in the municipal sector, we’re facing these challenges armed with only 9 cents of every household tax dollar.

We know this is not enough – and we think most taxpayers would agree.

We think it’s time for Canadians and Ontarians to have a conversation about how they want their tax dollars allocated.

It’s our job to make those conversations happen, and to start laying the foundations for a financially sustainable future.

That message is directed at both the provincial and federal orders of government – and we deliver it in cooperation with the Federation of Canadian Municipalities.

The Federal Government receives more than half of all tax dollars. We believe municipalities deliver the majority of the services that Canadians use most often.

Does this make sense? Is it what Canadians want? These are questions worth asking.

However, municipalities know that we can’t rely on new revenue and higher taxation to fill the gaps that we’re facing – particularly in the context of a weak global economy.

We must empower municipalities with the means to better control costs.

We know that you can’t continue to shoulder these rising costs within your budgets.

We need creative solutions. For example, it’s time to rethink how we deliver policing.

Technology and civilians can deliver some aspects of current police services, and we should already be moving to distribute these non-core policing functions to others.

And we know there are cheaper alternatives to delivering court security.

Police should be in their cars or on foot, patrolling and investigating crime.

They are not social workers, and they are not administrators – they are highly-trained crime stoppers.

The government can also work with us on controlling insurance costs.

Joint and several liability can create extraordinary financial burdens for municipalities involved in cases where they may share only a fraction of the blame.

This is an ongoing issue, and we have been talking about it for far too long.

Will we have to wait until insurance companies start turning municipalities away before we can move forward on this?

This is the absolute worst-case scenario. We can’t afford to let it get to that point.

It’s time to be flexible and to adapt.

Flexibility is a hallmark of AMO’s advocacy.

We will keep pushing decision makers to be flexible, and to understand the unique needs of Ontario’s rural and northern communities.

To help with this, AMO worked with FONOM and NOMA to create the Northern and Rural Lens.

The Northern and Rural Lens lays out the practical questions every provincial policy maker should ask to make sure that proposed solutions will work in the unique context of northern communities.

We know that some policy makers are using the Lens. I wish they all were. We will continue to chip away at that.

Municipalities need to be given flexibility to respond to regional challenges.

We would like you to be able to run with local and regional approaches that will allow your communities to succeed.

But you know – we all know – that local flexibility must be built into provincial and federal policy to achieve that.

For example, there has to be more flexibility in energy policy.

Last week’s budget touched on energy in the north, as well as the forestry industry.

The Northern Industrial Electricity Rate (NIER) program was extended 3 years with $360 million. But what northern communities want is flexibility.

You need flexibility to ensure that when industries do thrive – your communities benefit.

What if we used policy to create opportunities for northern industry, rather than taking them away? We can start to overcome the unique barriers our communities face.

However, our greatest barrier is stagnation. We need everyone in the Legislature to work together, find consensus and advance our mutual interests.

We understand that there are divisions. We get it.

Ontario’s municipal leaders are just as diverse. But we don’t let that get in our way.

When there is a problem in our community, we roll up our sleeves and fix it.

When we see that there is a problem that affects all of Ontario, we get together and try to fix that too.

That’s progress. And progress leads to success.

AMO's door is always wide open to everyone who is interested in working with us. And we are working with others – including business leaders, other associations and service providers that extend well beyond the municipal sector.

Taxpayers expect us all to work together cooperatively – and we owe that to them.

I appreciate the hard work that you are doing at home in your communities.

I also appreciate that you take the time and effort to travel, seek out information and better your communities, as you’ve done here over the past few days.

AMO is busy working hard too. And AMO works for you.

As your provincial Association, we’re always striving to better. We work to empower you to better help your communities.

That’s what we do. But, we are only as strong as our members make us.

Please take an interest in our work, and help us to advance good public policy.

Help us to channel your frustrations and challenges into meaningful conversations and opportunities to achieve the changes we need.

Make sure your local MPPs -- and MPs -- know that Ontario’s municipalities will work with them.
 
We need them to sit down with us… build solutions together… and make them happen. When we do that, we see success.

In a minority Legislature, every Member needs to have that mind-set.

Stagnation is a barrier to solutions. Don’t let partisan politics restrict progress.

You can also help us by staying up-to-date on the latest developments.

AMO shares information each week through our Breaking News emails direct to your in-box – these are specific items where we need your help.

And read our weekly WatchFile – it gives you highlights of what is going on that week provincially and federally, and what new programs and training we have to support you in your decision-making role at Council.

If you don’t get the AMO WatchFile every Thursday morning, sign up for it. It’s free.

Ontario’s municipalities all achieve more when we work together and stand together.

AMO appreciates the contribution that your municipality and FONOM make to the success of Ontario’s communities.

Thank you.