Remarks by:
Gary McNamara, AMO President and
Mayor, Town of Tecumseh

2016 OSUM Conference
Maitland Recreation Centre
Goderich, Ontario
Thursday, May 5, 2016
9:15 a.m.

(Check Against Delivery)

(Slide 1 – AMO logo)

Good afternoon.

Thank you for the opportunity to be here with you in Goderich, the Prettiest Town in Canada.

OSUM is the voice for Ontario’s small urban municipalities.

AMO is the voice for municipalities across Ontario – to the extent that we can build positions that reflect our different circumstances.

It’s true that Ontario’s municipalities are diverse.

It’s also true that Ontario’s municipalities agree on quite a lot.

Our Board is made up of 43 representatives, from across Ontario, and from all types of municipalities:
  • North, south, east and west.
  • Large and small.
  • Urban and rural.
  • Counties, regions and single tiers.
The Board is committed to working together – if not, others would use that to their advantage.

You will be happy to know that you have a strong voice on AMO’s Board.  Small urban municipalities face some unique challenges.  You grapple with urban challenges but often don’t have the resources of large cities.  Some of you share the resource challenges faced by your smaller neighbours.

I want to take a moment and acknowledge the hard work of your Small Urban Caucus:
  • Chair Lynn Dollin of Innisfil
  • Gail Ardiel of the Blue Mountains
  • Jim Collard of Niagara-on-the-Lake
  • Jamie McGarvey of Parry Sound
  • Graydon Smith of Bracebridge and
  • Larry McCabe of Goderich.
They come from all across the province, but they work together to represent your interests.

They aren’t a shy bunch.

Last week I was in Thunder Bay for NOMA, the Northern Ontario Municipal Association’s annual conference.

Next week I’ll be in Timmins for FONOM, the Federation of Northern Ontario Municipalities annual conference.

As I travel across the province, know that I hear your frustrations.

Sometimes I get frustrated, too.  Sometimes it lands me, and AMO, in trouble.  So be it.  Our job is to speak truth to power.

In the end Queen’s Park doesn’t always see the world as we do.  That, too, is frustrating.

At any given time, AMO works on dozens of policy files.

I’m going to update you on a few of the most pressing, but I’m not going to do it alone.

In a few minutes, AMO’s Policy Director, Monika Turner, will walk you quickly through her team’s work.

Common themes run through it:
  • Governments should work together, with mutual respect and trust.
  • Municipal costs must be manageable – and new responsibilities should come with funding sources.
  • Municipal funding should be predictable.
  • And all three orders of government (municipal, provincial, and federal) need to be financially sound and effective.
What does this mean in practice?

It means that our Memorandum of Understanding with the Ontario government is important.

Through it, the Ontario government has a legal obligation to engage with us early on.

We use this process to eliminate surprises, find solutions, and work cooperatively.  We can disagree.  On occasion, after the Province makes a decision, we get to say – told you so!

AMO has had encouraging meetings with our federal peers – including Amarjeet Sohi, Canada’s new Minister of Infrastructure and Communities.

He is the first federal minister to come to our offices and it has paved the path for his colleagues.

This year’s Federal Budget is, arguably, the most municipally focused that we have ever seen.

It commits more than $120 billion over ten years to infrastructure investment.

It has three dedicated municipal infrastructure streams – green, social, and transit.

Providing $11.9 billion over five years for upgrades to water and wastewater systems, affordable housing, and transit.

Last week, Minister Sohi sent letters to provincial/territorial counterparts with details for bilateral agreement preparation.

We expect to have a role – to bring the municipal perspective.

There’s $3.4 billion over five years for social infrastructure.  This includes affordable housing, early learning, child care, cultural and recreational infrastructure, and community health centers on reserves.

They will work to create a National Housing Strategy– something AMO has sought for years.

There’s $143 million over three years for rail safety.  It will fund improvements to grade level rail crossings, and improve emergency response.

The Federal Gas Tax Fund stays, with the indexation formula we wanted.

There will be more details to come in the coming weeks.  Watch for our updates.  

The Ontario Budget, released in late February, was more predictable, given that they plan to balance their Budget by 2018.  We did not want any new surprises.

The Province will complete the upload agreement in 2018.  

While the upload of costs for social service and court security benefits different municipalities to different degrees, the Agreement lifts about $1.8 billion in annual Provincial costs from municipal shoulders in this year alone.  

I hate to think what tax increases may have been without it.  We also need to recognize how many infrastructure projects wouldn’t have happened.

The Ontario Community Infrastructure Fund (OCIF) will increase to $300 million per year by 2018-19.   

This is great news.  We worked very hard to move the amount from $100 million.  The Province listened and delivered what we asked of them.

The Connecting Links program will increase by $5 million.  It will total $20 million next year, and $30 million in 2018.  

They decided to leave the Power Dam Special Payment Program alone – to the relief of many.  Plans for clawing back those payments have been permanently shelved.  

The Ontario Municipal Partnership Fund (or OMPF) is steady at $505 million.  

There was one surprise – $178 million in new funding, over three years, for affordable housing.  That’s helpful.

So there are positive announcements in both the Federal and Provincial budgets.

However, the truth is, we face bigger challenges than these announcements will solve.

(Slide 2 – municipal share of tax dollar)

To set the stage, municipalities get 9 cents of every household’s tax dollar.

We own more infrastructure than the Provincial and Federal governments combined.

(Slide 3 – contribution to infrastructure versus share of tax dollars)

What we have is aging.

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

(Slide 4 - $60 billion infrastructure gap)

That may not surprise you.

People in the south, appreciate how fast Ontario is growing – and how much infrastructure needs to be built to get people moving efficiently.

People in the north understand how large Ontario really is – and how much infrastructure we have to maintain, and the costs to run it.

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

(Slide 5 – km of road)

In fairness, this $60 billion estimate is not as accurate as we would like.

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

That concerns us.

AMO has been studying our challenges, and possible solutions.

(Slide 6 – What’s Next Ontario)

Last summer, we launched “What’s Next Ontario?” – and released A Fiscal Overview.  It will keep you awake at night.

Altogether, Ontario’s municipalities spent about $40 billion on operating expenses last year.

(Slide 7 – municipal costs)

Over the next decade, we expect they will grow at a rate of about $1 billion a year.

Looking at capital costs, we estimate that we’ll need to find an additional $6 billion a year, for 10 years on top of current revenues and grant programs.

To manage all that, Ontario’s municipal governments would need to increase revenue by a total of about $124 billion over the coming decade – just to do what we currently do.  We are not accounting for any additional new mandates or requirements.

(Slide 8 – revenue required/property tax increase)

If municipal governments have to go it alone, using just property taxes, we would need 8% more property tax revenue, every year.

Is that anywhere in the realm of possibilities for your municipality or your residents?

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

(Slide 9 – 1% property tax increase yields less than $50,000)

We need solutions that will work for all communities.  Are higher property tax increases the answer?  

We already have some of the highest property tax rates in Canada – and our communities must be competitive.

Can we reduce costs?

We think we can to a certain degree.

We have proposed dozens of changes to policing alone.

All Ontario municipalities should have access to emergency services that are safe, effective, and affordable.

You know that it is getting harder and harder to deliver that.

(Slide 10 – wage growth in the broader public sector since 2003)

After much urging, the Ontario Government is reviewing the Police Services Act.

We’re ready for it.  AMO’s report of recommendations has been downloaded almost 7,000 times.

Many of you rely on, and pay for, OPP policing.

The Province needs to do its part to control those costs.

We also need them to restore public confidence in Ontario’s interest arbitration system.

Simply put, interest arbitration is supposed to ensure that police and fire employees, who can’t strike, get fair wage and benefit increases.

Instead, the system has been turned on its head.  Police and fire receive wage and benefit increases that are in a class of their own.

If interest arbitration had produced the kind of wage settlements that we have negotiated with other municipal employees, we would have saved about $485 million between 2010 and 2014.

(Slide 11 - $485M could have been saved through arbitration reforms)

In just four years, the Province’s inaction has cost us enough money to build and maintain about 1,750 kilometres of road – or enough road to get from Goderich to Nova Scotia.

Ontario’s interest arbitration system is creating unjust imbalances, and indefensible costs.

Inaction has had consequences.

The solution is simple.

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’s what interest arbitration is intended to do.

(Slide 12 – AMO logo)

We think there should be fair and reasonable limits to municipal liability – because joint and several liability forces municipal taxpayers to pay for other people’s negligence.  

(Slide 13 – insurance costs)

In addition to the injustice of it, inflated insurance costs are shutting down things that communities should be promoting, like recreational trails and toboggan hills.

(Slide 14 – AMO logo)

You want the Province to manage energy costs.

So do I.

I live just outside Windsor.  Manufacturing is the backbone of our local economy.  Our energy costs have to be competitive to attract and maintain jobs.

There are many different issues that affect municipalities.  My community may have different needs than yours but there is one underlying need that we all have in common.

Municipal governments must be able to deliver what their communities need to succeed and they need to be able to pay for it.

So to summarize, the path we are on is not sustainable.

What’s Next Ontario is AMO’s effort to find solutions.

Like it or not, you will face increasing pressure to find more revenue.

In fairness to us – and taxpayers – we need the Province to help us deliver quality services that are more affordable.

Last August, the Premier warned us against holding on to current approaches, “simply because we've always done it this way”.

She said, “we should all be on the lookout for this phrase, because it can be the most destructive little phrase for any organization – and for government in particular”.

We agree.

In many cases, AMO is simply asking the Province to make changes that do just that and changes that will allow us to reduce costs and provide better value for tax dollars.

We also have a few things to ask of you.

AMO needs OSUM to have a strong voice and OSUM needs AMO to have a strong voice.

We work best when we are all strong, and all working together.

On some issues, we often hear about Ontario’s urban/rural divide.

We need to be wary of that.  We entertain division at our peril.

The municipal position – on almost every matter – is strengthened when we prove that Ontario’s many communities can work together; that policies and tools need to be built to accommodate our diversity.

We do that, through AMO.

It’s not a thing – or a head office for municipalities.

AMO is a meeting place for community leaders and municipal staff.

We share interests and find solutions.

We are a path to cooperation – between municipal governments – with our provincial and federal peers – and with others who can influence change.

In August, I will pass the torch to a new President, elected by delegates to our annual AMO Conference.

This year’s conference is in Windsor, so on behalf of the Association, and on behalf of my community, I hope to see you there.

If you have an interest in our work, or if you simply want to stay on top of matters that affect us all, I encourage you to read the AMO Watch File.  
(Slide 15 – Twitter)

It’s a free, weekly picture of what’s happening, and it’s available to anyone who registers to receive it.

You can also follow our Twitter feed, which is @AMOPolicy.

On that note, I will hand the floor over to our Policy Director, Monika Turner.

(Slide 16 – AMO logo)