Big City Mayors Release Letter Calling for Increased Revenue Power

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:

Mayors1.jpg

Mayors2.jpg

New Framework for Forfeited Corporate Property to Take Effect

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:

  • Setting out the sole jurisdiction of the Minister over forfeited corporate property, which is defined as:
    • Real property and interests in real property that have forfeited upon dissolution of a corporation
    • Personal property and interest in personal property that have forfeited upon dissolution of a corporation, that is located in, on or under the forfeited corporate real property or that is necessary to administer the real property or ongoing operations/business on the real property
    • Personal property that has been left in, on or under forfeited corporate real property regardless of who owns it
  • Providing new management powers to the Minister, such as:
    • Collecting necessary information
    • Appointing a receiver-manager
    • Addressing interests that encumber forfeited corporate property (such as mortgages or liens)
  • Giving the Minister broad disposition powers, such as:
    • Relief from forfeiture
    • Transferring certain properties by order
    • Transferring charitable property to another charity
  • Allowing the Minister to determine amounts owing to the Crown and recover its costs, including:
    • Through a lien on the property
    • By making an application to the Court to require responsible former officers and directors of business corporations to pay the costs
    • From the proceeds of a sale of the forfeited property
    • Limiting the liability of the Crown when managing forfeited property

Amendments to the Municipal Act & City of Toronto Act:

  • Providing notice in relation to the tax sale process to the Minister responsible for the Forfeited Corporate Property Act, where a municipality is aware that the property is forfeited corporate property
  • Providing that no tax arrears certificate may be registered if an order cancelling encumbrances under the Forfeited Corporate Property Act, or a notice that the Crown intends to use the forfeited corporate property for Crown purposes has been registered, unless the Minister responsible consents

New Paper Calls for Canadian Cities to Get New Taxation Powers

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:

slack-kitchen-revenue

You can read the full paper here.

Government Consulting on Proposal to Use Fire Services for Paramedic Care

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.

Technology Can Help Municipalities Generate Parking Revenue

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.

Government of Ontario Tables Fall Economic Statement

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: 

  • Updates to the business property tax capping program that give municipalities the option to limit the program to historic changes, and broaden the eligibility criteria for the phase our of the capping program. This change should be in effect for the 2017 tax year
  • A freeze on the property tax rates on apartment buildings.
  •  Creating a new Financial Services Regulatory Authority that will act independently of the government
  • A pledge to keep consulting with municipalities about the sharing economy

Other Highlights: 

  • $1.1 billion in funding for schools to address much-need repair and upgrades
  • A ban on door-to-door sales of water heaters, air conditions, furnaces, and water filters
  • Passing legislation to licence and set the qualifications for home inspectors
  • Eliminating fees for special occasion permits allowing the sale of beer, wine and other alcoholic beverages
  • A new dementia strategy to enhance services for people newly diagnosed or living with dementia and their caregivers
  • Investing $32.4 million over four years in the Scale-Up Voucher Program to help companies overcome barriers to their next stage of growth

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.

on-update-1

on-update-2

 

For more:

Building Ontario Up for Everyone: 2016 Ontario Economic and Fiscal Review 

Backgrounders for Housing, Balancing the Budget, Healthcare, Economic Development, Infrastructure Retirement Security, and others 

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.

screen-shot-2016-11-10-at-5-17-26-pm
Source: Ministry of Finance 
screen-shot-2016-11-10-at-5-17-50-pm
Source: Ministry of Finance
screen-shot-2016-11-10-at-5-18-12-pm
Source: Ministry of Finance
screen-shot-2016-11-10-at-5-24-49-pm
Source: AMO

Provincial ‘Fiscal Health’ Worse than Municipalities, according to CD Howe Institute Paper

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.

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.