02/22/2016


Remarks by:
Gary McNamara, AMO President and
Mayor, Town of Tecumseh
Monday, February 22, 2016
1:15 – 1:30 p.m.
Canadian Room

OGRA/ROMA Joint Conference


(Check Against Delivery)


Thank you for the opportunity to address the conference.

This conference is important to us. By that “us” I mean it is important to ROMA… it is important to AMO… and OGRA… it is important to all of us.

Twice a year… at this conference… and at the AMO Conference in August… we all come together.

In addition to the program, we have all of the formal delegation meetings with the Province. There are usually about 300 of them.

On top of that we have all the informal connections that create solutions… solve problems… improve understanding… and move us forward.

So what does a successful Ontario look like?

I think we can all agree that we would have:

Jobs, hope and prosperity, in every part of the province.

Social programs would help those who need our help.

Our province would be cleaner, and greener.

Ontario would be served by government programs and services that we can take pride in… and afford.

I would be the first to say that we live in one of the greatest places on earth.

We are fortunate.

I am also wary of anyone who says that Ontario is good enough.

As leaders – municipally, provincially, and federally -- we must always believe that Ontario can, and must do better.
I am sure this belief inspired many of you to run for office.

Let’s acknowledge that ultimately, our provincial and federal peers have the same basic goals and aspirations that we have.

So how do we achieve them?

It will not be easy.  

For all our strengths and successes, we face significant challenges.

Most are financial, and they pose hard choices.  

We have a new federal government, full of energy and hope.

It appears to appreciate that municipal governments are key to their goals.

We’ve had some very positive discussions with the new government, and they are working with FCM.

But they face difficult economic challenges, due in large part to a drop in oil prices and a battered Canadian dollar.
The Ontario government will release a new Budget on Thursday. It is expected to reduce the Province’s deficit by more than $3 billion dollars.

If so, Ontario’s Finance Minister will still have a deficit of more than $4 billion to tackle a year from now.
They have promised to balance Ontario’s budget by 2018.

So where do Ontario’s municipal governments fit in?



Municipal governments own more of Ontario’s infrastructure than the Provincial and Federal governments combined.

What we do have is aging – and the demand for more infrastructure is growing.

Currently, we manage more than 140,000 kilometres of roads – enough to wrap around the earth almost four times.


We own 15,000 bridges and culverts; 466 waste water systems and 665 drinking water systems.

Not to mention transit, trails, arenas and social housing.

I know of one smaller municipality with about 26,000 residents and 108 bridges. They’ve passed a two-per cent capital levy just to pay for the work needed to replace eight of those bridges over the next few years.    
Many of you have used capital levies for immediate needs – but they are not a large scale solution to the problem.


We estimate that it will take $60 billion in new infrastructure funding to maintain what we have and meet future demand.

In fairness, this estimate is not as accurate as we would like. It is based on the best data that we have, and some of that work is a decade old.

The estimate also omits some big ticket items, such as social housing stock, recreation facilities and other municipal buildings.  

This much is certain: Ontario municipal governments will need hundreds of millions of dollars for infrastructure over the next decade.

No one -- including federal or provincial governments – has a firm number on how much is actually needed.

We should.

We must all come together to build a practical plan that gets us to where we all want to go – where we need to go.

To put this into context, AMO has been looking at what it would mean to go it alone.

Municipalities have to worry about more than infrastructure. We are also responsible for a range of essential services that people depend on every single day, from public safety to water treatment and waste disposal.


Collectively, municipal governments across Ontario spent about $40 billion on operating expenses in 2015.

Municipal operating and capital costs are expected to grow by about a $1 billion a year for the next decade.

If current costs are projected over time, we estimate that Ontario’s municipal governments would need to increase revenue by about $115 billion over the next 10 years to pay for them.



Going it alone, without any changes, we would need to increase property taxes by 8% per year, every year, for the next 10 years to raise that kind of revenue.

That is more than double most property tax increases.

Sound far-fetched?
I have been throwing around some numbers that are so large that few people could relate to them.
I’ll try to land this closer to home.

For about half of Ontario’s municipalities, a 1 per cent property tax increase generates less than $50,000.

That is half of Ontario in this room.
This year, a small town of less than 20,000 residents had to raise property taxes 16 per cent. They made tough decisions to cut it back from 30 per cent.

The increase is needed to buy a new fire truck -- and make up cuts to OMPF funding. Policing is nearly one-third of their budget. Their job will be no easier next year.   
 
Are property tax increases of this magnitude the solution? And what will be the repercussions?  Our property taxes are already one of the highest in Canada.


We will hear about the benefit of the uploads, and what municipalities have received in recent years.

In broad terms, that revenue has been extremely beneficial -- and it’s appreciated.

It seeks to correct a fundamental wrong.  

Property taxes are intended to support property-related needs.

Property taxes are ill suited to funding social programs.

Programs that redistribute wealth are best funded by income taxes.  

For more than a decade, the Provincial treasury was siphoning tax revenue away from municipalities, and the results were so devastating that Ontario is still recovering from it.

Ontario cannot afford to repeat that mistake,

Ontario’s municipalities would be in terrible shape without the 2008 upload agreement.

However, the uploads do not provide relief for all municipal governments.

The example I cited earlier is a common scenario.
Many small, lower tier municipalities have received limited benefit from the upload – and they have been hit by a combination of higher emergency service costs, higher insurance premiums and cuts to OMPF funding.

Upper tier and urban municipalities face different variations of the same challenges. They have large and expensive infrastructure demands, and rising emergency service costs.

Let’s be frank. We’re all somewhat nervous.  

Your local needs and interests are critically important to you.

Your neighbour’s needs – whether big or small communities are just as valid and pressing.

This is also part of our challenge – to find common, collective solutions ourselves rather than the province forcing one on us.


Former AMO president, Roger Anderson once said that ‘we all have similar roles and responsibilities, and we all face the same public expectations of our communities.  The only difference is the size of the crowd and the number of zeros in the figures.

AMO focuses on the needs of all Ontario municipalities, large and small. Balancing that challenge is not as hard as some might think.

We sometimes struggle to satisfy segments of the municipal community, but only because we are committed to serving all municipalities. Right now, we ALL need to get our heads around how we are ALL going to succeed over the next decade.

Ideally, our definition of “all” should include the Ontario Government and the Federal Government – working with us, and planning with us.

Policy makers at Queen’s Park and Parliament Hill are simply wrong if they believe that they have everything in-hand, or that they alone can take Ontario to the destination that we all want to reach.

They can’t do it without our municipal piece of the puzzle.

Of course, we can’t do it without them either.

But we do what we can, as well as we can.  
At a minimum, Ontario’s municipalities need to pull together, work together, and support one another.

Small municipalities need the strength that large municipalities bring to the table.

Large municipalities need the strength that comes from a unanimous voice.

United, we are strong.

Divided, we are very vulnerable.  I hope you wholeheartedly agree and stand as one!

For our part, you can expect AMO to forcefully advocate for changes that would strengthen Ontario’s communities – of all sizes.

We all know the fiscal challenges at the province.
For practical reasons, our pre-budget submission not only spoke about infrastructure and the OMPF, but we also emphasized changes that would make a difference – ones that would not burden Ontario’s treasury.

For example, for years we have been calling on the province to restore balance to interest arbitration – the process that settles contract disputes for police and fire services.


If interest arbitration had produced the kind of wage settlements that collective bargaining achieved for other municipal employees, Ontario municipalities would have saved about $485 million between 2010 to 2014.

 

It’s about half a billion dollars – and the results would have been more fair to the rest of our employees.
Based on our experience with the Federal Gas Tax Fund, half a billion dollars will build and maintain about 1,750 kilometres of road.

That will get you from here to Halifax.

Ontario’s interest arbitration system is creating unjust imbalances, and indefensible costs.
Inaction has had consequences.

It’s impossible to ignore.

We will keep saying what we have always been saying – employees who can’t strike should receive wage and benefit increases that are in line with wage and benefit increases for municipal employees who can strike.

That is what interest arbitration is intended to do.



We will continue to call for fair and reasonable limits to municipal liability – because joint and several liability continues to force municipal taxpayers to pay for other people’s negligence.  
And, because it is having the perverse effect of shutting down Ontario’s snowmobile trails and toboggan hills.
We will continue to call for changes to the way we deliver emergency services.

Open any newspaper in any town, large or small, and the consensus is clear: Changes are needed to ensure that all communities can afford to have safe and effective emergency services.

We’re pleased that the Minister of Community Safety and Correctional Services has announced consultations on the Policing Act – and we are ready for it.

AMO’s 2015 report on how to modernize policing has already had an impact. It’s been downloaded more than 5,000 times.  Our work on influencing this review has started.
Finally, we will continue to ask for the easiest change of all.

We want to change an investment regulation.

So that we can expand investment programs and also see AMO and other municipal associations be able to invest our own funds in such programs.

It would generate better investment returns – stretching property tax dollars much further.

If the Minister gets this question at the Minister’s Forum today, the only reasonable answer is, “Yes, that’s coming.”  I will be the first to applaud. Frankly - I may be the one to ask it in this afternoon’s public forum!
 
Over the past few months, and for the rest of this year, AMO is focusing on the questions that I started with: How are Ontario’s municipalities going to tackle the obstacles that we face? And how are we going get to where we all want to go?

That’s the focus of What’s Next Ontario – an initiative of the AMO Board.

 

You will be hearing more about this in the coming months – and it will be a major focus of the annual AMO Conference in Windsor this August.

We are engaging members in conversations about how municipal governments can achieve long-term, fiscal sustainability.

Simply put, we are looking at how Ontario’s municipalities will provide all that we provide, and make ends meet.
The goal is to develop a shared vision and plan so that municipal governments have the firm financial foundation needed to meet their responsibilities today and over the long-term, in order to create a strong and prosperous Ontario.

The last time that we did this was in 2006, and we did it in partnership with the Ontario government. That created a ten year plan, taking us from 2008 to 2018.

It’s 2016, and we need to plan for our ‘next’ future.

AMO is not a head office or a thing. It’s a meeting place.

It’s our best opportunity to come together and to create a path that overcomes the challenges we face… and gets us to the destination that we all want to reach.
On Thursday I will be at Queen’s Park for release of the Provincial Budget.

AMO will provide analysis through a special alert to our members.  Watch for it and help us when we have a call for action.

We will also encourage you to watch for AMO WatchFile – a weekly picture of what’s happening. It is available to anyone who registers to receive it.


Please follow our Twitter feed, which is @AMOPolicy.

In about six weeks, we will take to the road to participate in the other regional association meetings and caucus conferences that inform our work.

These are all important stops on the road to the 2016 AMO Conference, in Windsor, this August.

I want to emphasize that AMO is only as strong as you make us. Please help us to serve you as well as possible, and please help us make sure that Ontario’s communities are as successful as possible.