Ontario plans to take back downloaded costs from cities
TORONTO - Ontario's promise Friday to take back some of the costs downloaded onto municipalities will save the City of Ottawa $30 million annually starting in 2018.
The province said the changes would take about $1.5 billion in service costs back from municipalities by 2018, but about $900 million of that had already been announced.
The Progressive Conservatives, under former Premier Mike Harris, downloaded about $3 billion of costs onto local governments. The Liberal uploading plan reverses about half those costs.
"Would we like it faster? Of course, but their economic reality is the same as the city's economic reality," said Mayor Larry O'Brien.
In future years across Eastern Ontario, Kingston will be able to shave $20 million off the books; Cornwall, $10 million; and Pembroke, $3 million.
"When I was mayor of Ottawa I couldn't have imagined a day like today," said Municipal Affairs Minister Jim Watson, claiming the announcement would end "years of downloading and contempt shown to the municipal sector in Ontario by previous governments."
Watson said municipalities will have more money for infrastructure projects such as sewers, and water plants. Social housing and repairing roads and bridges are among the downloaded items local governments are still paying for.
"For more than a decade Ontario municipalities have struggled to meet increased demand for service within a fiscal framework that channeled billions of dollars a year of municipal revenue into the provincial treasury," said Peter Hume, an Ottawa city councillor and president of the Association of Municipalities of Ontario.
"The direct result was declining municipal services, differed investment in municipal infrastructure, and escalating property taxes."
Mayors disagree on benefits
Some big city mayors applauded the plan, but the mayor of Sarnia said it was "unconscionable" that the province would take 10 years to phase in the changes.
The main reason many cities and towns were pleased with the delayed report was that the province finally agreed that property taxes -- the only revenue source for most municipalities -- should not be used to fund social service programs such as welfare.
"Principle is extremely important in my opinion," said Mississauga Mayor Hazel McCallion.
"That is what I'm so excited about, that we've turned the tide. Downloading is going to end and uploading has taken over."
The province's agreement to start taking welfare costs back from municipalities in 2010 and court costs in 2012 won't result in any property tax cuts, but will help Mississauga keep a lid on tax increases, McCallion said.
But Mike Bradley, the mayor of Sarnia, said the Association of Municipalities of Ontario had let down towns and cities like his by signing off on the province's "consensus" report. The plan will leave local governments with a huge welfare burden amid a slowing economy, he said.
"If there's any mayor out there that thinks this is a good deal they probably thought Napoleon won at Waterloo," said Bradley.
"It's an overall defeat for our communities because we are going to have the same unfair burden year after year, with some relief in certain areas over 10 years."
Toronto Mayor David Miller agreed he'd like the province to move quicker on taking back welfare and court security costs, among the myriad of programs downloaded by the Harris Conservatives in the 1990s, but understands that tough economic times are limiting the province's room to do more.
"It's true that the full implementation of this agreement may not be happening as quickly as everyone would have liked," said Miller.
"In the looming economic uncertainties, the provincial government has brought about a fundamental shift in the principles of how these services are funded that will serve our municipalities very well."
Opposition slams 10-year process
The opposition parties said the Liberal government squandered multi-billion dollar surpluses instead of helping municipalities during good economic times, and now can't afford to give them the support they need, especially with welfare rolls expected to soar as more people lose their jobs.
"The announcement is extremely disappointing in terms of trying to get those social services costs off the backs of property tax payers," said New Democrat Andrea Horwath.
"Municipalities can't shoulder that burden, and the government has basically turned their back on municipalities and said, `you're in it on your own for the next couple of years."'
Horwath warned that cities and towns would be forced to hike property taxes to pay for increasing welfare costs until the province starts taking back the costs with a modest three per cent upload in 2010.
The Progressive Conservatives said the government got mayors like McCallion and Miller on side with the 10-year phase in by agreeing to the principle that property taxes shouldn't be used to pay for social services, and said it should have been done years ago.
"It's all post-dated cheques generally," complained Conservative critic John O'Toole.
The report dealt only with issues on which the province and municipalities were able to reach a consensus, said Doug Reycraft, the past president of AMO and the mayor of South Middlesex.
"There were a number of issues on the table at various times on which we didn't reach a consensus . . .social housing, services to Crown land, farm tax policy and development charges," said Reycraft.
"Those are issues on which the association will continue to advocate as we try to achieve what we think is a fair balance in this province."
It was especially hypocritical for Premier Dalton McGuinty to be demanding the federal government be fair in its fiscal arrangements with Ontario when the province isn't being fair with municipal governments, Bradley said.
"If (Prime Minister) Stephen Harper announced that he was going to bring fairness to the fiscal relationship between Ottawa and Queen's Park and he would do it over a 10-year time period, the premier, his cabinet and caucus would be screaming bloody murder," said Bradley.
With reports from CTV Ottawa's Natalie Pierosara and The Canadian Press