KAGAWONG—Billings Township has received some good news concerning the power dam special payment program for 2015 from the province.
“It appears Mr. (Ernie) Hardeman’s letter has had an effect and we are not going to be affected with (cutbacks) to the power dam special payment program this year,” stated Billings Councillor Tom Imrie at a council meeting on Monday.
Councillor Imrie read from an Association of Municipalities of Ontario (AMO) members update newsletter concerning the province’s 2014 fall economic statement highlights on the issue of the power dam special payment. Matthew Wilson, senior advisor with AMO, wrote that, “the planned reduction to the Power Dam Special Payment Program for 2015 will be deferred. Municipal representatives have been in discussion with provincial officials on this issue. Affected municipal governments and AMO have called on the provincial government to cancel the proposed $4.4 million cut to these payments. Failing that, options are being explored to reintroduce the municipal taxation of power dam properties.”
“The 2015 deferral removes an immediate financial risk to over 100 municipalities for the short term. Continued advocacy for 2016 and beyond is required to minimize the municipal fiscal impact of this proposal. AMO has secured a commitment to look at cumulative impacts that provincial decisions such as this bring to the sector,” wrote Mr. Wilson.
As had been reported earlier this year, Billings Township, Wawa and 109 other communities faced a serious financial consequence if the Liberal government proceeded with planned cuts to this program.
Ernie Hardeman, MPP Oxford and PC Critic for Municipal Affairs and Housing, wrote to Ontario Premier Kathleen Wynne on October 27, 2014. “As you will recall, two months ago at the (AMO) conference, municipalities spoke to you about the challenges that your changes to the Power Dam Special Payment Program would cause. They explained the impact that reducing the payments would have on their budgets and asked that power dams once again be subject to municipal taxes.”
“During your speech at AMO you told municipalities that this needed to be fixed. In fact, during the bear pit session at the conference you stated clearly that you had directed finance officials to make taxation part of the discussion,” wrote Mr. Hardman. “However, premier, municipalities tell me the opposite has occurred.”
“I was recently told by one of the municipalities, who will be significantly impacted by the reduction, that the Ministry of Finance is pushing ahead with a decrease but refusing to discuss taxation of the power dams until a later date. Premier, if a solution is to be found it must be done before the reductions occur,” wrote Mr. Hardman. “Premier, for many of the 111 municipalities who will face reductions this represents a significant loss of revenue. It is not fair or sensible to put them through this hardship and then try to find a solution at a later date.”
“I ask you to maintain the Power Dam Special Payment Program payment level until a new sustainable plan is in place and to direct Ministry of Finance officials to ensure that they are having full and open discussions with municipalities, looking at every option as you committed,” wrote Mr. Hardeman.
Michael Mantha, MPP for Algoma-Manitoulin, had told the Recorder in a previous interview that the power dam special payment program is a very small program but the impact of the clawback is large on many small communities. The only way for communities to recapture the lost revenue is through a property taxation increase or by cutting services.
The program was implemented in 2001 to replace the property taxation revenues associated with hydro-electric plants when they were deemed exempt. The payments from this program for these communities are significant contributions to the revenue base, explained Mr. Mantha.
Billings Township would have lost just under $5,000 if cuts were made in the program, which would have had to be made up through its tax base.
The AMO communication also provided other highlights from the Ontario Minister of Finance’s fall economic statement. “The 2013-2014 provincial deficit it $10.5 billion. The province’s total revenue projection for 2014-2015 is $509 million lower than the 2014 budget forecast. The 2014-2015 total expense outlook is $208 million lower than projected in the 2014 budget. We will continue to monitor the provincial fiscal projections on behalf of AMO members as reduced revenues may result in additional program reductions or other actions as the province works to balance its budget by 2017-2018.”
For the Provincial Land Tax, “(Monday’s) statement reaffirms the government’s commitment to bring forward proposals for implementation in 2015. Provincial land tax is the tax paid in the unincorporated areas of Northern Ontario that are outside municipal boundaries,” AMO reports.
As well, AMO indicated that on the topic of the Ontario Community Infrastructure Fund (OCIF), “the government today announced $50 million in formula allocations for eligible municipalities under 100,000 population, providing three years of stable support for municipalities. Announcement for the other $50 million in the Ontario Community Infrastructure Fund (OCIF) project applications and the Building Canada Fund-Small Communities Fund are anticipated in the coming months. OCIF will be reviewed in the future with a view to moving toward full formula allocation.”
“The Ontario government pledged $29 billion over 10 years in its 2014 budget for transit, highways, and other infrastructure projects; $15 billion in the Greater Toronto and Hamilton Area (GTHA); and $14 billion outside will support priorities such as GO Transit and Regional Express Rail, as well as highway expansion,” AMO reports.
