Wellington County and all other municipalities were pleased to learn that the provincial government is going to upload its welfare costs – but it is going to take a while.
The province is moving to upload all social assistance benefits and court security costs from municipalities.
A consensus report released the day of the announcement that included the Association of Municipalities of Ontario stated the move will help reduce cost pressures for municipalities and property taxpayers.
County Treasurer Craig Dyer said in an interview on Monday that the uploading of welfare costs will start in 2010, and will take nine years to complete.
Currently the county pays 80% of the welfare costs.
There will be low reductions at the start, with only 3% removed in the first two years. In 2012, that jumps to 8%. Oddly enough, the year after the next provincial election, the upload takes off, with 15% uploaded. It adds 14% off in 2014 to 2018, except in 2017, when the reduction if 15%.
“It’s something municipalities have been asking for for a long time,” Dyer said, adding that municipalities have been paying a portion of welfare costs for the past 70 years.
Last year, the province added an upload for the Ontario Disabilities Support program from the municipalities. That one starts next year. The Ontario Drug Benefits study, completed in 2008 starts this year.
By 2018, when all those uploads are completed, the result will be a net annual benefit to municipalities of more than $1.5-billion compared to 2007.
Total annual ongoing support to municipalities, including other provincial initiatives, is projected to reach $3.8-billion – an increase of about $2.7-billion or 250 per cent over 2003.
The upload of Ontario Works benefits will reduce municipal costs by more than $400-million annually, by 2018.
The cost of court security will start in 2012 to a maximum of $125-million a year by 2018.
“This is a milestone in our partnership with municipal governments and all Ontarians will benefit from the spirit of collaboration of the review,” said Municipal Affairs and Housing Minister Jim Watson.
Finance Minister Dwight Duncan added, “Through our partnerships with municipalities, we are uploading social assistance costs, which builds on our poverty agenda, at an affordable pace,” said “This agreement represents the success we can achieve by working together while recognizing Ontario’s fiscal challenges in the current global economic environment."
AMO President Peter Hume said, “For more than a decade AMO’s top priority has been to upload social assistance costs from the municipal property tax base. In 2005, we called upon the Ontario government to work with municipalities to develop a plan to restore fiscally sustainable municipal government to Ontario over a manageable period of time. The province listened and it has worked with us to build stronger communities throughout Ontario.”
Projected total ongoing annual support to municipalities is estimated to be $3.8-billion by 2018, a $2.7-billion or 250 per cent increase over 2003. Municipalities have been responsible for costs related to court security since 1990. Given the increasing emphasis on security, those costs have escalated.
Across Ontario, over 100 municipal governments are paying court security costs.
Some municipalities with a regional courthouse within their boundaries also shoulder costs for cases involving residents in surrounding municipalities.
Provincial courts are administered by the Ministry of the Attorney General. Prisoner transportation is administered by the Ministry of Community Safety and Correctional Services.
County Warden John Green told his council at the October meeting that the province was planning the upload, but said at that time Wellington residents would have to wait and see the effects of such a move.
Dyer told the social services committee this month in a report that the upload of Ontario Works to the province is “much less significant in Guelph and Wellington due to the low caseload to population ratio.”
He added that the county will still face the impacts of the payments in the short term because major decreases will not be taking place for over three years.
He said that his staff is still awaiting confirmation of 2009 provincial grants, and awaiting clarification of upload impacts on:
− discretionary benefits;
− transient hostels;
− employment assistance; and
– the finalizing of the 2009 budget estimates.
Dyer noted in his report that according to the province, the annual savings in 2018 will be:
− $4.5-million for Wellington County; and
− $11.1-million for Guelph.
Guelph and Wellington are partners in social services and run a joint committee. Dyer said the provincial projection of savings was based on their projection of the value of these programs in 10 years
He added that from a budget perspective, the total savings relative to the 2007 pre-download budget will be:
− $2.2-million for the county; and
− $7.1-million for the city.
The county and city partnership is based on use of social services, and the city has a much higher usage rate than Wellington County.
Dyer also added in his report to the social services committee that “the expectation from the province appears to be that municipalities should use this new “tax room” to increase spending in other areas (i.e. infrastructure).”
As well, he pointed out, there were “Several references in the report to the need for municipalities to invest more in infrastructure” and “additional investment could be in the form of greater direct funding of capital works or new long term financing.”