05/02/2013

Remarks by Russ Powers, AMO President and Councillor, City of Hamilton, May 2, 2013, at the Ontario Small Urban Municipalities (OSUM) 60th Anniversary Conference.

 
(Check Against Delivery)

 

Thank you for the kind introduction.

I’m glad that I was able to join you today to say a few words on behalf of AMO.

When this conference was scheduled, who would have guessed that we would be meeting in the midst of a new provincial government tabling its first budget?

Later this morning, I will be leaving for Queen’s Park to attend that as a representative of Ontario’s municipal community, and AMO staff will be in an advance lock-up to pour over the budget and analyze what it means for us all.

AMO has always worked closely with regional municipal associations across the province, and we need to keep working together – now more than ever.

I don’t need to tell you that we are working in an unpredictable political environment.

All eyes will be on Queen’s Park to see if this Budget will pass.

Even if it does, we will still be living in a land of private members’ bills and careful vote counts.

We can’t say for sure what the future will look like, but we do know one thing. We all need to work together to get Ontario’s economy moving again.

We need strong, sustainable communities, with viable futures.

To that end, we have asked the entire Provincial Legislature to sit down and work with us to address some of our key priorities.

We need to keep working together so that when we do sit down with them, we can do it with one, strong, unified voice.

We’ve worked hard to open doors at Queen’s Park – and to earn seats at tables where policy matters are being discussed before they are decided.

The best example of this is our Memorandum of Understanding agreement 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.

There are exceptions. The annual provincial budget is exempted from the MOU table, so I can’t tell you exactly what will be in today’s Budget.

I can tell you that the Minister of Finance and other members of Cabinet know exactly where we stand on this and just about every aspect of municipal financial interests.

This will be the first Budget from Premier Wynne and Finance Minister Sousa.

Will it be a basic… or bold?

The Throne Speech, delivered in mid-February, was not detailed. It reflected the fact that a new government was in the early stages of policy development.

However, it gives us a broad sense of Premier Wynne’s priorities, as did her remarks to delegates to the ROMA/OGRA conference.

Today’s Budget is sure to deliver new insights, but I suspect that we will have to look beyond it, to other statements, policy announcements and legislative actions.

We will be watching closely for progress on key priorities.

The first of these is fiscal sustainability and predictability.

Premier McGuinty was consistently firm in his commitment to the 2008 upload agreement. We expect that commitment to continue.

In 2013 alone, the value of the upload to the municipal sector is estimated to be $1.36 billion. We need to see those gains protected – and we need to see that in this budget. The 2008 agreement must be honoured, on schedule, as planned. 

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. 

AMO will be watching closely for any shift in costs, soft or otherwise. We’ve seen what happens when the province makes changes to social programs that municipal service managers deliver.
Last year’s budget handed down changes to social assistance including new caps on discretionary health benefits and the elimination of the Community Start-up Maintenance Benefit.

The result was a shrunken funding envelope – and municipalities were put under a lot of pressure by program clients and advocates to fill that gap and continue to deliver the same level of services.

I can’t talk about the uploads without also touching on the OMPF.

We are extremely disappointed that OMPF will not be reconciled for 2011 and beyond.

We also think that the government needs to ‘hit the pause button’ on the $25 million reduction to the OMPF in 2014.

We need to get that formula right. It has to consider future developments in policing costs, which we know are growing fast, as well as how it would respond to a significant rise in unemployment or big changes to property assessment.

***

Today and in the weeks that follow, we will also be very interested to learn more about the province’s commitment to infrastructure funding, and to see what they put forward to help those with transit systems as well.

Last month, Premier Wynne spoke about the Province’s plan for improving transit and transportation in the Greater Toronto Area – and the need for new sources of revenue, because property taxes could not support it. 

Most people recognize that – and the passionate and broad debate that is happening around revenue tools for transportation demonstrates just how much we all want to find a lasting solution to our infrastructure gap.

We should all hold an interest in dealing with this large urban issue. Why? Because study after study has pointed to lost productivity and stunted GDP growth as a result of this very issue.

Strong infrastructure – in the GTA and throughout Ontario – is essential to all of our goals for growth and prosperity.

AMO is heartened by these discussions – and we are pleased that the government seems to recognize the need for a province-wide solution.

Such a solution will require vision, boldness, and long-term commitments. We can’t rely on start-and-stop funding by successive governments to get to where we need to go.

One of the strongest arguments for the 2008 upload agreement was to transfer social service costs to where they belonged, so that municipalities could have a greater capacity to invest in infrastructure.

As I mentioned, the total value of the provincial upload this year alone is $1.36 billion – and I can’t imagine how municipalities would be able to make any capital investments without the upload.

Despite these gains, we are still struggling to fill our $6 billion dollar-a-year infrastructure gap.

On the bright side, both the provincial and federal governments seem to recognize that Ontario’s municipalities can’t do this alone.

Last week, the province announced plans to create a $100 million dollar fund – to be available October 1. They called it the first step in a comprehensive transportation plan for rural, small urban and northern Ontario.

In addition, the Province will consult on the components of a permanent program for small, rural and northern municipalities – and we’re ready to sit down and work out the details – any time, any place.

In our conversations with the province, we have been clear in our call for permanent, predictable sources of funding for Ontario’s roads and bridges. This new fund helps demonstrate that they too understand how sorely this was needed.

All three orders of government know that Ontario is facing very real infrastructure challenges, and all three need to work together to address them.

This is a positive step in that direction.

On the federal front, the new 10-year Building Canada Fund will provide long-term support for municipal infrastructure – and it’s a direct result of discussions between the federal government and its stakeholders – including AMO and the Federation of Canadian Municipalities.

We’ve also made great progress on sharing revenue to meet our infrastructure needs through Canada’s Gas Tax Fund.

It’s become a permanent, predictable source of funding for infrastructure, and in the last Federal Budget we learned that it would be indexed at two per cent per year.

This will protect the value of this investment over time, and 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.

These are some of our success stories – but we need to see more of them.

We know that times are tough. Every level of government is 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.

Solid, long-term asset management plans are a big part of this – but increasingly, they are simply the price of admission for Ontario’s municipalities.

To really put ourselves on the path towards financial sustainability, we need to find new and innovative ways to deliver municipal services and to keep rising costs under control.

This is one area where we have been hard at work. But we can’t do it alone.

We need the government to work with us.

We keep hearing that they want to work with us – and we’ve been doing our part to make it even easier for them to do so.

We’ve learned that complaints – no matter how valid – tend to fall flat. We know that it’s far more helpful, and effective, when we can identify:

  • What the problem is;
  • What needs to be done;
  • Why it’s in the best interest of the province, and regionally;
  • How it can be implemented; and,
  • How they can look good doing it.

This is the approach we took with interest arbitration.

Each successive attempt to amend the legislative framework has built upon lessons from the last. We have done our homework – and we have made balanced proposals.

We laid the foundations to have a productive and intelligent discussion on what improvements could be made, and how we could move forward on them.

The Conservatives incorporated much of our work into a remarkably comprehensive Private Members’ Bill this month – although they did add some ‘flavour’ of their own.

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.
 
The government is well aware of the problem. They referenced it in the Throne Speech.  The Premier, Minister of Labour and the opposition parties know what we feel is needed to fix it.
 
How much longer can Ontario afford to weather the problems that are being created by a lopsided interest arbitration system?

We cannot allow progress to slip through our fingers on a need that is as obvious as this.

The next move – or fifth attempt at a solution – will probably come from the Government benches.

Whatever it is, it needs to be practical and it needs to restore balance. It needs to signal that local economic circumstances must have their place in the decision-making of arbitrators.

Even with progress on interest arbitration, the OPP will see an 8.5% wage increase for 2014. It is part of the collective agreement and nothing can be done about that.

We know how it will impact municipal budgets.  But how will it impact other municipal programs and services? And how will it impact interest arbitration awards?

Under the current system, increases cascade like dominos, to every police force – and beyond to other emergency services like fire and ambulance.

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

With the OPP working on new ways to bill for services and moving to full cost recovery, what will this mean for you with regard to OPP policing contracts? The end state is just as critical as any transition approach. 

What will it mean for Ontario Municipal Partnership Fund? It is also in transition. 

I can tell you that AMO is trying to collect all the dots and to connect them! But it is not easy given all the disparate interests, including those in the police services.

The buzz for the last year has been that it’s time to rethink how we deliver policing as one vehicle to manage costs.

We need to start putting alternatives into practice.

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, on bikes or on foot, patrolling and investigating crime.

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

The rising cost of policing is an ongoing issue, and it’s not going away – but neither are we, and the government has to recognize that.

This wouldn’t be the first time that we’ve had to be persistent to ensure that Ontario’s communities have better public policy.

We have been working hard to keep things progressing on this – and we’ll continue to.

We will also be looking to the government to 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 has been an ongoing issue – 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 – but it is possible.

I am somewhat heartened that there may be a way to turn the corner on this particular issue – we need progress.   

***

Later today, all eyes will be on Queen’s Park as the government tables its first budget.

In the weeks and months ahead we need to build momentum, and keep the yardstick moving forward on the priorities that matter most to Ontario’s communities.

Our greatest barrier to progress is stagnation.

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

We understand that there are divisions in the Legislature. 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 communities, we fix it.

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

That’s what success looks like. 

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. You have my promise that your Association will be as bold and courageous.

It’s our job is to work for you – but AMO is only as strong as our members make us.

Help us advance good public policy, by staying on top of the latest developments, and taking an interest in our work.

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

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.

Your continued support of AMO, and the support of OSUM, strengthens us all.

In four months, I hope that you will join us in Ottawa once again for the 2013 Annual AMO Conference. 

These events are investments in learning – and often there is a lot to learn from the successes of others. None of us has all the answers, and none of us should feel as though they are trying to solve problems alone.

I’m sure we will all have a lot to talk about in August – and hopefully, a few more successes to celebrate.

Thank you – and enjoy the conference.