Fri. Feb 23rd, 2024

Fiscal pact: Ontario municipalities lift tax main

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Ontario municipalities say they are finding it increasingly difficult to balance their budgets without passing on part of the bill to taxpayers.

  • Camille Gris Roy (View profile)Camille Gris Roy
  • Mathieu Simard (View profile)Mathieu Simard

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Toronto is far from the only Ontario city experiencing financial difficulties. Other municipalities have already adopted or are also planning larger than usual property tax increases to replenish their coffers. They are asking the province for a lifeline like the one thrown to the Chow administration.

In its budget for 2024, Toronto proposes an increase of 10, 5% of property taxes. A significant jump, recognized Mayor Olivia Chow, but necessary to restore the metropolis's finances after years of freezes and minimal increases – not to mention the concerns inherited from the pandemic. Toronto now faces a $1.8 billion shortfall.

Elsewhere in the province, the Association of Municipalities of Ontario (AMO) identifies tax increases which can be between 6% and 10% and expects this to be the new normal in the near future. CEO Brian Rosborough talks about a systemic problem with financial sustainability.

We are experiencing the same situation in all regions of the province, whether in remote and northern communities, small urban municipalities or other municipalities in the Greater Toronto Area. They all face a range of responsibilities and pressures.

LoadingAmong the Islanders, the Roy effect is already being felt

ELSELSE ON INFO: Among the Islanders , the Roy effect is already being felt

Increase in property taxes in some municipalities:

AMO explains that in the 1990s, the province has transferred several responsibilities to municipalities such as funding social housing, ambulance services and public health.

Cities find themselves doing more with less and their reality has become more complex, adds Hamilton Mayor Andrea Horwath. We face a housing crisis, an influx of refugees, as well as mental health and substance abuse issues. At the same time, we are trying to maintain aging infrastructure and ensure that our citizens can move around and drink clean water, she wrote in a statement to Radio-Canada.

In Greater Sudbury, the 5.9% increase in property taxes this year will primarily serve the maintenance of infrastructure, the biggest issue identified by Mayor Paul Lefebvre. It’s our roads, our water and sewer pipes, our arenas, our recreational services, our municipal buildings that are suffering. In the past, old councils took from our reserves to try to reduce the property tax rate. Now, the reserves are no longer there, so without greater support from the province and the federal government, taxpayers must be asked to pay more than before.

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Greater Sudbury council has adopted a budget for the next two years.

In Pickering, the proposed 3.9% increase will be lower than in Toronto, but citizens already pay more than in the Queen City, notes Mayor Kevin Ashe. People from Toronto who move here get a shock when they receive their property tax bill. He hopes that the next Ontario and federal budgets will include aid measures for municipalities.

The City of Toronto recently signed a new agreement with the province to ensure its financial sustainability. The metropolis is thus receiving almost $400 million from Ontario this year for its operating budget, and $3 billion in capital expenditure over 10 years. This agreement provides, among other things, for Queen’s Park to regain control of the Gardiner and Don Valley (DVP) highways, which cross the metropolis.

Other municipalities would like to be able to conclude similar agreements with the Ford government. This is the case of Burlington, whose municipal council unanimously agreed this week to ask the province for a comprehensive review of municipal finances in Ontario.

The city wants a new fiscal framework, notes Mayor Marianne Meed Ward, who also chairs the caucus of mayors of large cities in Ontario. We simply cannot continue to fund infrastructure and community services on the backs of property taxpayers. The property tax system was never designed to respond to the complexity of the problems that municipalities now face, she emphasizes.

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Olivia Chow and Doug Ford have agreed on a financial aid plan for Toronto.

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Brian Rosborough notes that while the province takes over the Gardiner and DVP highways in Toronto, thousands of bridges and kilometers of roads across Ontario fall under the jurisdiction of municipalities, in some cases in very remote communities that have not the ability to pay.

That’s great for Toronto. They have big challenges, I have no doubt. But we also have big challenges: we were forced to merge almost 25 years ago, recalls the mayor of Greater Sudbury. His city notably found itself paying for the maintenance of roads that were previously under provincial control. The savings expected at the time never materialized. I think it was the province that won in this merger, in terms of costs.

Paul Lefebvre believes that there would be inconsistencies to correct: Greater Sudbury, although one of the largest cities in the country in terms of area, does not have access to certain provincial funds reserved for regional municipalities, which have a different status (at two levels of government).

The Ontario Ministry of Finance, for its part, assures that it already finances many programs that benefit municipalities, and argues that the agreement reached between Toronto and Ontario reflects the unique challenges of the metropolis and the scale of its transportation and shelter networks.

With information from Lorenda Reddekopp

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