Rough roads ahead

At first glance, it seems like a lot of money and some uncharacteristic provincial largesse.

Wellington County and member municipalities are receiving a combined total of nearly $4.4 million from a $200-million pool of one-time funding to help municipalities across Ontario improve local service delivery. 

Municipalities across the county have agreed to pool part of the windfall, with the county contributing $175,000 and each member municipality $25,000 to hire a consultant and conduct a municipal services review aimed at finding efficiencies and savings ahead of anticipated cuts in provincial funding.

It should be no surprise to anyone that funding to municipalities will be cut under a Conservative government that has prioritized deficit reduction. 

The last time such a government was in power, under Premier Mike Harris in the 1990s, municipalities not only had their provincial grant funding severely reduced, but were largely compelled to amalgamate themselves out of existence in an effort to attain savings – a goal most analysts believe was never realized. 

As Guelph-Eramosa Mayor and county administration, finance and human resources committee chair Chris White noted at the April 25 county council meeting, “it seems fairly obvious to anybody sitting on any board there’s cuts coming – board of health, library, wherever you go. Municipalities are going to be subject to the same thing in the next budget, we’re quite sure.”

So municipalities will take their cash and do their best to reduce costs, but it’s unlikely they will manage to offset the hits they are likely to take in next year’s provincial budget. 

The Ontario Municipal Partnership Fund, set up to stabilize municipalities in the wake of the Harris-era cuts and downloading, delivered $7.1 million to Wellington County municipalities for 2019. However, they were advised the funding pool would be reduced in coming years. By how much is yet to be determined, but municipalities are clearly worried.

In Minto, for example, the 2019 OMPF allocation of $1.63 million in 2019 is equal to nearly 34 per cent of the town’s municipal property tax revenue. Last month town council passed a resolution expressing “grave concern” about the  possibility of the provincial government reducing or eliminating the municipality’s future allotments.

“If allocations to municipalities are reduced, councils will need to compensate with property tax increases or local service reductions,” states Minto’s resolution. 

And there’s the rub.

In Minto’s case, a 34% increase would increase the municipal component of property taxes paid for an average household by $403 per year.

It’s been a long time, since the ‘90s in fact, since we’ve been compelled to point this out, but downloading isn’t saving, it’s just transferring. Any money the province “saves” in this fashion will cost citizens in far more visible fashion through higher property taxes and/or reduced municipal services.

As Minto Mayor George Bridge points out at every opportunity, municipalities in Canada are already maintaining 60% of the country’s infrastructure, with only 9% of the tax revenue. 

If the province goes ahead with large scale reductions in funding, that $4.4 million in modernization funding is going to fade quickly into the municipal memory banks.

Think your road’s a bit rough now? Stick around.