May 2019
Municipal Response to Provincial Budget Cuts

2019-05-24 12:21:20 PM

CATEGORIES: Finance

Since the release of the Ontario government’s budget on April 11 aiming to eliminate the $11.7 billion deficit over five years, cuts and changes to provincial funding for municipal governments have been steadily occurring. This currently includes public health, library services, conservation authorities, and ambulance services left financially impacted. 

Such cuts to municipalities have been reported to likely equal well over $500 million in lost annual funding and foregone revenue. Broken down year by year, it is also reported that local governments will lose at least several hundreds of millions of dollars a year once the changes are all implemented. It is anticipated that further reduction to transfer payments, such as the Ontario Municipal Partnership Fund (OMPF), are forthcoming later this year.  

These announcements have been met with varying degrees of criticism from the municipal sector as local governments will be need to make up for the losses by considering tax increases, service cuts, and/or delaying projects.

Below is a brief summary of sector responses to date: 

The Large Urban Mayors’ Caucus of Ontario (LUMCO)

On April 30, LUMCO, an association of 28 big city mayors that represents 67% of Ontario’s population, released a statement saying municipalities are gradually learning of funding cuts and in an environment where municipal budgets have already been passed. 

While the group does support the government’s goal to eliminate the deficit, they say it should not be done so without consultation. The group is also concerned that the provincial government is “downloading by stealth” as the taxpayers will be left making up the difference. 

Mayor Bonnie Crombie, City of Mississauga 

In response to early budget cuts, such as early years/childcare programs (amounting to $6.1 million), housing and homeless programs ($1.3 million), Mayor Crombie said that if the cuts are not reversed, Mississauga Council will be “forced to explore raising taxes or cutting some services to help make up the difference.” 

Crombie has anticipated that staff at the Region of Peel anticipate that the revenue shortfall will be approximately $38.1 million in 2020. 

Mississauga’s Mayor has also criticized the manner in which the budget cuts have been released noting it’s a “mixture of media reports and notifications from City and Regional staff.” 

Mayor Patrick Brown, City of Brampton

Mayor Brown in a written statement echoes the criticism expressed by LUMCO and Mayor Crombie and pointed to the specific example of a provincial cut to the Peel Regional Police prisoner transport as one challenge the Region may face: “if we passed on the cut to the police then that means for a month, we would not transfer prisoners from the jail to the court or from the court to the correctional facility. It would essentially mean cases would be thrown out and criminals would get off.” 

Mayor John Tory, City of Toronto 

Mayor Tory has been a regular and perhaps most vocal critic of the government’s proposed funding cuts to Toronto since the provincial budget was released. Toronto’s city manager says that the cuts could leave the city with a $180 million gap in their budget resulting in either increasing taxes or cutting essential services to compensate. 

When Premier Ford offered funding for municipalities to conduct audits on their budgets, the Toronto Mayor called it a “PR stunt.” 

Yesterday, Tory launched a petition demanding the Ontario government reverse its funding cuts and has urged the Toronto public to sign it in hopes it will cause Toronto-area PC MPPs to listen and take action. 
Tory has also previously urged PC MPPs to “lead their government on behalf of the people they represent in the city of Toronto” and for this government to work together with Ontario’s local governments. Urging more collaboration, Tory has criticized the cuts taking place with no consultation. 

Mayor Fred Eisenberger, City of Hamilton

Mayor Eisenberger released a statement responding to Premier Ford’s proposed 4% budget cut to large municipalities and school boards and said that certain conditions should be in place if the government is to continue cutting costs: “stop the surprises, stop cutting public health, stop cutting ambulance services, and let’s work together.’ 

Eisenberger’s biggest concern is that funding is being cut with no prior consultation.

The Hamilton Mayor also noted that he stands with Mayor Tory on the need for a more collaborative and coordinated approach to better serve the people of Ontario. 

Mayor Jim Watson, City of Ottawa 

In response to Ford’s funding offer for audits on the budgets of large municipalities and budgets, Mayor Watson declined the offer saying that was “not prepared to accept someone coming in to do a line-by-line review while at the same time (the province) has already prejudged how much is going to be cut. 

Watson is, however, willing to consider a review of Ottawa’s budget if Ford stops the funding cuts to municipalities this year. He has also criticized the Premier for referring to the cuts as ‘efficiencies’ when it comes to cuts to health, paramedics, and tourism. 

The Ottawa Mayor also highlighted what he calls “efficiencies” that his city has achieved, namely in cutting staff positions in 2016 and limiting annual property tax increases at 3%. 

Mayor Cam Guthrie, City of Guelph

Again in response to Ford’s recent funding offer, Mayor Guthrie says that cutting the city’s budget by 4% would equate to $19 million and that Guelph is already doing audits on city services, such as transit and waste collection. Arguing that this is a duplication, Guthrie asks that is a “duplication of service not an inefficiency?” 

Guthrie has said that the audit offer does not address the cuts the city is now facing, with many coming into effect retroactively. 


 


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