Today Finance Minister Charles Sousa announced that Ontario’s budget will be released on April 27th. The Minister also promised that the budget will be balanced, for the first time in the past decade in Ontario.
For more:
Toronto Star: Finance Minister Introducing Balanced Budget April 27th
The mayors of Calgary, Edmonton, Ottawa, Toronto and Vancouver released a letter today calling for increased revenue powers. According to the Mayors,
For too long, city governments have been required to rely on property taxes alone to support our growing operating budgets, with dollars stretched thinner and thinner as we serve the growing needs of the public. At the same time, our transit systems, roads and vital infrastructure are suffering from decades of underinvestment.
See below for the full letter:
On December 10, 2016 new rules for managing forfeited corporate property will take effect. The new rules are the result of consultations with the municipal sector that have been taking place since 2012. Highlights of these changes can be found below. The new framework will be implemented through the Forfeited Corporate Property Act (2015) and the Escheats Act (2015), as well as through amendments to 23 other pieces of legislation including the Municipal Act.
Key highlights of changes:
Amendments to the Municipal Act & City of Toronto Act:
A new paper, authored by Harry Kitchen and Enid Slack, argues that large Canadian cities should have access to new revenue tools. According to the paper, cities face tough decisions about how to fund the complex and growing demands facing them, and need new sources of revenue to survive.
Canadian cities face many challenges – changing demographics, increased income inequality, increasingly complex expenditure demands, deteriorating infrastructure, and so on. These challenges have increased over the last few decades, yet the revenues available to cities to meet those challenges have remained largely the same – property taxes, user fees, and transfers from federal and provincial governments. For a long time, Canadian cities have been calling for access to more taxes, comparable with what large U.S. and European cities have.
Amongst the taxation sources the paper considers are increases to income tax, a municipal sales tax, tolls, vehicle registration and others:
You can read the full paper here.
The Ministry of Health and Long-term Care (MOHLTC) has released a discussion paper exploring the viability of allowing fire services to provide paramedic care. This proposal, which was initially made by the Ontario Professional Fire Fighters Association (OPFFA), could potential lead to an increase the costs municipalities already pay for fire services, and was quickly condemned by AMO:
Municipal governments are deeply concerned about the direct and significant impact of the proposal on municipal emergency services, both financially and operationally. We will read the MOHLTC discussion paper carefully, but to date, there has been no evidence or cost-benefit analysis seen that shows such an approach would improve patient outcomes. Given the lack of evidence, we don’t know why this proposal is now a provincial priority, especially as municipalities would bear all the costs, labour challenges, and risks. Fire services are 100% funded by municipalities and only an elected Municipal Council has the authority to determine the level and type of fire protection services needed by its community. We are also concerned that if any Municipal Council agrees to this proposal it would be replicated throughout Ontario by the current interest arbitration system. Municipal governments strongly prefer to work with the Province to improve and modernize our cost-shared land ambulance/EMS services. Specifically, municipalities have been asking the Province for years now to make improvements to land ambulance dispatch that would directly improve patient outcomes.
AMCTO will continue to monitor and provide updates on this file as new developments emerge. You can find the discussion paper here.
A new article, published by the CD Howe Institute, explores how municipalities can use technology (such as apps) to free up more parking, reduce parking costs for most people, but still generate greater revenue. According to the article, parking apps can allow municipalities to:
…adjust parking prices based on the given demand and supply of parking spots, thus enabling smarter parking pricing. Smarter prices could lead to more available parking, a lower average price of parking, less congestion, and more revenue for the city.
Read the full article here.
Today the Government of Ontario tabled its fall economic statement, which was full of measures designed to address the high cost of housing for first time homeowners. Under the government’s new plan first time homebuyers would be exempted from paying the Land Transfer Tax (LTT) on the first $368,000 of the cost of their first home, while the LTT refund would be expanded from $2,000 to $4,000. According to the government the costs of these new exemptions will be paid for by increasing the LTT on properties sold for more than $2 million.
Updates with Local Government Implications:
Other Highlights:
Fiscal Outlook:
The government is sticking with its pledge to balance the budget by 2017-18 and keep it balanced for the 2018-19 cycle. The deficit for 2016-17 will remain at $4.3 billion (same as the 2016 budget projection), while the province’s net debt for the same period is projected to be $317.9 billion.
For more:
Building Ontario Up for Everyone: 2016 Ontario Economic and Fiscal Review
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:
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.
A new memo, released by the CD Howe Institute, argues that municipalities are in much better fiscal shape than their provincial counterparts. The paper, written by CD Howe Director of Research Alexandre Laurin asserts:
Looking at consolidated GFS (Government Finance Statistics) data makes one point clear: municipalities collectively run large surpluses, while provincial governments are dragging us down. The balance sheet of all provinces looks much healthier once provincial governments are combined with their municipalities…
Laurin argues that that the explanation for this lies in the distinct budget accounting practices used by municipalities, which “exaggerate capital up-front costs and understate them later on expenses.”
Read the full memo here.
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.
AMCTO Policy 