2017 Ontario Budget Update

Today Ontario’s Minister of Finance Charles Sousa tabled the province’s 2017 budget. The first balanced budget following deficits that reached $19 billion at the height of the global recession in 2009, the government’s 2017 plan pledges new investments in sectors, such as healthcare and education, that have not seen significant spending since the economic downturn.

For the municipal sector, many of the new initiatives proposed in the budget, such as the Fair Housing Plan, have already been announced. However, the budget does grant municipalities new authority to levy a hotel tax. AMCTO’s pre-budget submission recommended that the government provide municipalities access to new revenue tools, and while this falls far short of the overall fiscal needs of Ontario’s local governments, we are encouraged by the government’s willingness to begin expanding the range of revenue tools available to municipalities.

While AMCTO will continue to review the budget in greater depth over the coming days and weeks, below is a brief summary of some of the highlights of the budget for the municipal sector:

New Municipal Power to Impose a Hotel Tax:

  • The budget proposes amending the Municipal Act and the City of Toronto Act to allow single and lower-tier municipalities to levy a hotel tax. However, there are a few conditions on this new authority, including:
    • If a municipality has an existing Destination Marketing Fee (DMF), it will be required to share hotel tax revenue with the relevant tourism organization.
    • Municipalities that do not have a DMF will be required to share 50% of revenue with their respective regional tourism organization.

Fair Housing Plan:

  • The budget confirms many of the details previously announced in the government’s Fair Housing Plan, including:
    • Expanding rent control to all private rental units, including those built after 1991.
    • A new $125 million development charges rebate program for multi-residential purpose-built rental housing. Municipalities who opt to participate in this program will be able to tailor it to suit their needs.
    • A requirement for municipalities to tax new multi-residential apartments at a similar rate as other residential properties.
    • Allowing the City of Toronto to tax vacant homes. The budget also notes that the government will “work with other interested municipalities that are experiencing issues” to deal with the problem of vacant real estate and speculation.
    • Working with municipalities to ensure that they have the tools they need to help encourage the supply of new housing.
    • Creating a special “Residential Land Development Facilitation Team” to work with municipalities and other stakeholders on improving the development approvals process.
    • Introducing a 15 percent Non-Residential Speculation Tax (NRST) on foreign home buyers.

Other Investments in Housing:

  • More than $45 million over three years to provide up to 1,150 additional supportive housing units for those with serious mental illness, addictions, and those who are homeless, or at risk of becoming homeless.
  • A new program to sell surplus provincial land at below market value as a way of building more affordable housing across the province:
    • The province will commit $70 – $100 million towards pilot projects of this program, creating 2,000 new housing units in the Greater Toronto and Hamilton Area (GTHA).

Additional Infrastructure Spending:

  • An additional $30 billion (in addition to the previously announced $160 billion) will be added to the government’s long-term infrastructure plan. The new investments will primarily be dedicated to hospital projects, school renewal initiatives and child care expansion.

Child Care:

  • As announced yesterday, new funding will support child care for 24,000 more children up to the age of four.

MPAC Governance:

  • The government proposes to broaden the eligibility for members of the MPAC board of directors, by including former municipal officials, and changing the size of the MPAC board from 15 to 13 members.

PLT Reform:

  • Building on changes announced in the 2015 budget and 2016 fiscal outlook, the province will introduce legislative amendments to further support increased equity in provincial land taxation in the north.

Seniors Public Tax Credit:  

  • A new Ontario Seniors’ Public Transit Tax Credit for Ontarians aged 65 or older. The tax credit would provide seniors with a refund of 15% of eligible public transit costs.

Long-term Care:

  • An additional $58 million of spending in 2017 (a 2% increase) for long-term care homes.

Sharing Economy:

  • A promise to release the government’s Sharing Economy Strategy at some point in 2017—though the budget contains no new details about the plan.

Fair Hydro Plan:

  • Confirmation of the government’s Fair Hydro Plan, which will begin to reduce hydro prices for ratepayers by 25 percent this summer.

Investments in Healthcare:

  • Increasing healthcare benefits by 11.5 billion over the next three years, committing to a number of new hospital projects and providing free prescription drug coverage for everyone under 24.

For more:

AMCTO 2017 Pre-budget Submission

AMCTO 2016 Budget Update

Budget Eliminates Municipal Office-holder Tax Exemption

The federal government’s 2017 budget includes a provision that will eliminate a tax exemption that some municipalities use. Found on page 208 of the budget document, the government outlines its plan to remove the tax exemptions for non-accountable expense allowances paid to members of provincial and territorial assemblies as well as to certain municipal office-holders. Councillor Pay Deduction

 

For more: 

2017 Federal Budget Update

Building a Strong Middle Class: 2017 Federal Budget 

2017 Federal Budget Update

Today the federal government tabled its 2017 budget. Following large investments in its inaugural 2016 plan, the federal government’s follow-up budget for 2017 is focused on flushing out the details of previously-announced policies, and introducing a variety of targeted, smaller measures. The budget adds $4.8 billion in new government spending over the next five years, with most beginning after 2018.

For municipalities, the budget primarily contained confirmation of previous commitments as well as a few promising new investments in housing, childcare and infrastructure. Reaction from the municipal sector was largely positive:

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While AMCTO will conduct a more thorough analysis of the budget over the coming days and weeks, below are a few of the highlights.

Housing: 

The budget commits the government to a National Housing Strategy, which will see the government invest more than $11.2 billion (already budgeted) in a range of housing initiatives, including:

  • $225 million to improve housing conditions for Indigenous Peoples not living on reserve
  • $300 million over the next 11 years to build housing in northern territories
  • A new national housing fund, which will be administered through CMHC and receive an investment of $5 billion over the next 11 years to address critical housing issues and prioritize support for vulnerable citizens
  • Preserving baseline funding for Canada Mortgage and Housing Corporation related to the experts of long-term social housing operating agreements

The government has also committed $40 million over five years, and $6.6 million per year after that to develop and implement a Housing Statistics Framework, which is designed to help the government address soaring home prices in some of Canada’s biggest cities.

Infrastructure: 

The budget includes more details on the $21.9 billion committed towards green infrastructureFrom the budget:

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The budget also includes details about the government’s previously announced $81.2 billion infrastructure plan. Specifics include:

  • More details on the Canada Infrastructure Bank, which is tasked to work with provincial, territorial, municipal and Indigenous, and private sector investors to fund infrastructure across the country. It will be responsible for investing at least $35 billion over 11 years, using loans, loan guarantees and equity investments
  • $2 billion for rural and northern communities to help grow local economies and support community and environmental projects. An additional $400 million will be provided through the Arctic Energy Fund for energy security in communities north of the 60th parallel
  • $300 million to launch a “Smart Cities Challenge Fund”
  • $4 billion for indigenous communities to build and improve housing, water treatment systems, health facilities and other community infrastructure
  • $10.1 billion over 11 years to modernize Canada’s transportation system
  • $20.1 billion, through bilateral agreements with the provinces and territories, to building new urban transit networks. From the budget:

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Child Care

The budget includes $7 billion over the next ten years (already budgeted) for new child care spaces, starting in 2018-19 and pending agreement with the provinces and territories

Ride-sharing:

Beginning on July 1st, Uber and other ride-sharing services will be subjected to the same GST/HST rules as taxis

Opioids and the Fentanyl Crisis: 

The budget proposes listing naloxone, one of the drugs used to treat fentanyl overdoses, to the list of prescription drugs that are exempted from the GST/HST as a result of their utility in treating life-threatening conditions.

Skills Training and Innovation: 

The budget creates Innovation Canada, with a $950 million budget over five years to support innovators and build more innovation hubs known as “super clusters.”

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The government also pledge new commitments to skills development, including boosting funding to the Labour Market Transfer Agreement by $2.7 billion over six years.

Debt, balance, and fiscal outlook

The budget doesn’t currently contain plans to move towards balance. The 2016-17 deficit projection is $23 billion, risking to $28.5 billion by 2017-18 and then down to $18.8 billion by 2021-22.

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For more: 

2016 Federal Budget Update 

AMCTO Releases 2017 Pre-budget Submission

Today AMCTO presented its pre-budget submission before the Standing Committee on Finance and Economic Affairs, during their hearings in London Ontario. AMCTO’s submission includes seven recommendations that we believe will help to build stronger local governments and stronger communities. The recommendations cover the four areas identified by AMCTO’s members as their biggest priorities for the budget, including:

  1. Fiscal sustainability
  2. Infrastructure
  3. The reporting burden
  4. Sucession planning

Read the full submission here.

AMO Releases Pre-budget Submission

Yesterday the Association of Municipalities Ontario (AMO) released its 2017 provincial Pre-Budget Submission to the Standing Committee on Finance and Economic Affairs.  The submission contained a number of recommendations for the Government of Ontario, including:

  • Working with the municipal sector to develop a bolder revenue framework for Ontario’s municipal governments
  • Adding inflationary increases to the Ontario Municipal Partnership Fund (OMPF)
  • Becoming a more active funding partner for social and affordable housing
  • Modifying a recent policing grant announcement to ensure that municipalities don’t face additional financial risks in the long-term
  • Improving the efficiency and effectiveness of police services
  • Reforming Ontario’s interest arbitration system
  • Maintaining the provincial 1/3 contribution for cost-shared infrastructure funding  (even if the federal government contributes a greater amount)

Find out more about this submission, or read the full report here.

Province Releases Details of Pre-budget Consultations

The government of Ontario has released the details of its pre-budget consultations. Once again this year the government will be using Budget Talks, as an online consultation tool that provides a variety of venues for stakeholders and citizens to submit their budget recommendations. Those wishing to complete formal submissions have until January 31, 2017 to do so.

Find our more about the government’s pre-budget consultations here.

Regional Chairs to be Directly Elected

The government’s omnibus fall budget bill includes a provision that would require all regional chairs to be directly elected. According to Minister of Municipal Affairs Bill Mauro the changes will:

“..help strengthen local governments and enhance their ability to serve the residents of their communities.”

However, not everyone was pleased with the announcement. While Brampton Mayor Linda Jeffrey welcomed the legislation, Mississauga Mayor Bonnie Crombie referred to it as solving a problem that doesn’t exist.

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For more:

Toronto Star, “Regional chairs to be directly elected” 

2017 OMPF Allocations Announced

Yesterday the Ministry of Finance issued the 2017 allocation notices for funding under the Ontario Municipal Partnership Fund (OMPF). 388 municipalities across the province will receive OMPF funding in 2017. See below for more details on 2017 allocations. While the overall funding envelope will remain steady at $505 million, there are a number of changes as part of the 2017 funding announcement, including:

  • A 15% cut for municipalities in southern Ontario (same as 2016)
  • A 10% cut for municipalities in northern Ontario (same as 2016)
  • A reallocation of $15 million to specifically target municipalities that are faced with challenging fiscal circumstances
  • A reallocation of $5 million to target rural communities with a high percentage of farmland

The 2017 OMPF provides a guaranteed minimum level of funding in order to help municipalities as they adjust to changes in the program as part of its redesign in 2014.

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Source: Ministry of Finance 
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Source: Ministry of Finance
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Source: Ministry of Finance
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Source: AMO

IMFG Releases Two New Papers – Complex urban challenges require new thinking both locally and nationally

The Institute for Municipal Finance and Governance (IMFG) has released two new papers by post-doctoral fellow Abigail Friendly.  The first paper, Participatory Budgeting: The Practice and the Potential, looks at how we can meaningfully involve local residents in the machinery of government through participatory budgeting and the second paper, National Urban Policy: A Roadmap for Cities, is focused on national policymaking whereby Friendly argues that it is time for a national urban agenda in Canada.