Elimination of funding would mean tax increase of 45 percent, reeve says
MANITOULIN—As part of the provincial government’s efforts to restore fiscal balance in Ontario the Ministry of Finance has informed municipalities that the 2019 Ontario Municipal Partnership Fund (OMPF) is under review.
“They (province) haven’t told us what exactly is going on, but have indicated the OMPF funding is under review,” Ken Noland, reeve of Burpee-Mills Township and chair of the Manitoulin Municipal Association (MMA), told the Recorder last week. “If they end up eliminating the OMPF funding it will mean in our township we will have to increase taxes 45 percent to make up the shortfall.”
Mr. Noland noted, “the OMPF program was put in place to offset the downloads to municipalities from the province. Therefore, if there is any reduction in OMPF funding, municipalities would have every right to decrease the payment on downloaded costs, those being policing, DSB and ambulance and maybe the Nature Conservancy of Canada would need to lose their tax exemption status for property they own in municipalities.”
“Basically they are saying to municipalities, ‘brace yourself’,” said Mr. Noland. “The ministry pointed out they are having to work with smaller budgets. But they also said they want to work with rural municipalities in Northern Ontario.”
In a letter to Ontario municipalities dated December 21 Vic Fedeli, Minister of Finance wrote in part, “Dear Head of Council. We are writing to provide you with an update on the 2019 Ontario Municipal Partnerships Fund (OMPF). Firstly, congratulations on your new office term. Our government knows that one of the first priorities for your new council is setting your 2019 budget. The Association of Municipalities of Ontario (AMO) along with a number of individual municipalities have asked for information about the 2019 OMPF to support budget planning.”
“Like many of my colleagues in the Legislature, as former municipal representatives, we understand the importance of this information,” wrote Mr. Fedeli. “Let me assure you, we are committed to getting you the details of your 2019 OMPF allocation as soon as possible.”
Minister Fedeli went on to explain that, as outlined in November’s 2018 Ontario Economic Outlook and Fiscal Review, “our government wants to ensure that the vital services people rely on like health and education are available to individuals and families for generations to come. This is why our top priority is putting the province’s fiscal house in order.”
“As you know, the province’s financial challenge is massive,” continued Mr. Fedeli. “We inherited a $15 billion deficit and over a third of a trillion dollars in net debt. The previous government was spending more than $40 million more a day than they took in.”
“This is simply unsustainable,” wrote Mr. Fedeli. “This is why we are making every effort to restore fiscal balance to the province.” He explained, “Ernst and Young, who conducted a line-by-line review of Ontario’s spending, confirmed in its report Managing Transformation-A Modernization Action Plan for Ontario, that the growth in transfer payments and other provincial supports are key contributors to the province’s mounting debt. Getting this spending under control is why we are undertaking a detailed review of all transfer payments, including those to municipalities.”
“We must continue to support municipalities in a way that is sustainable and responsible. To achieve this, we are reviewing the OMPF—which is why details of OMPF allocations will be released later than in past years,” wrote Mr. Fedeli.
Mr. Fedeli said the province, “will be looking to you, our municipal partners, to help us with the challenge that lies ahead as we look to drive efficiencies and value-for-money in all of our transfer payments, including the OMPF. While we all will be operating within a smaller funding envelope, we want to work with you to return the program to what it was initially intended to do: support the Northern and rural municipalities that need it the most.”
“As part of the OMPF review, we will seek your feedback on how best to renew the program,” wrote Mr. Fedeli. “We will work through AMO and the recently signed joint Memorandum of Understanding (MOU). This agreement is a foundation of our relationship. The AMO MOU table has been an important forum for discussing and receiving your input on financial matters. I also understand that there has been a staff working group that has provided valuable feedback on the OMPF in the past. Ministry officials have been asked to engage with this group early in the New Year.”
“Again, we want to provide you with 2019 OMPF allocations as soon as possible. We are working to complete the review early in 2019,” added Mr. Fedeli.
