MAY 12, 2015
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11. C.16 - CW INFO
Committee of the Whole
Meeting Date:
May 12, 2015
Submitted by:
James Gates, Treasurer
Subject:
Province of Ontario Budget
BACKGROUND:
On Thursday April 23rd, the Honourable Charles Sousa, Minister of Finance presented
the 2015 Provincial Budget.
Municipal Highlights – excerpts from Association of Municipal Managers, Clerks and
Treasurers of Ontario (AMCTO), Association of Municipalities of Ontario (AMO) and the
Municipal Finance Officers Association (MFOA).
Investments in Infrastructure: The biggest financial commitment outlined in the
budget is an investment of $130 billion over 10 years for a range of infrastructure needs,
including roads, bridges, and transit. Of the $130 billion, $31.5 billion will be dedicated
to the Moving Ontario Forward Plan, for public transit, transportation, and other priority
infrastructure projects.
Government Commits to Incremental Provincial Land Tax (PLT) Reform: The
government is incrementally reforming the provincial land tax for unincorporated areas.
According to the budget, PLT inequities would begin to be addressed beginning in 2015
at a “manageable pace,” along the following lines:
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The PLT rate would be adjusted by $10 per $100,000 of assessed value in 2015,
followed by an additional $40 per $100,000 of assessed value in 2016.
Businesses operating in unincorporated areas would make a “proportionate
contribution.”
The minimum per property tax rate in unincorporated territories would be set at
$50 annually in 2016.
MAY 12, 2015
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11. C.16 - CW INFO
Despite overall decline, slight rise in OMPF for Northern Municipalities: The
Ontario Municipal Partnership Fund (OMPF) envelope will be $505 million in 2016. This
is a slight improvement to the Government’s original plan for a 2016 envelope of $500
million. Northern Ontario municipalities will benefit exclusively. The addition $5 million
will be added to the Northern Communities Grant Component. Municipalities in the
remainder of the province will experience a $10 million cut to their allocations in 2016.
This will be a considerable impact for some communities in southern Ontario.
Strengthening the Property Tax Assessment System: The budget contains a
commitment to improve the property assessment system before the 2016 assessment
year, especially by implementing the recommendations of the Special Purpose
Business Property Assessment Review. This process will include broader changes to
the property tax assessment system, and the MPAC Board of Directors.
New Money for Housing: Absent from the budget was any substantial new housing
programs or initiatives, although there was new money committed to existing programs.
The budget announced $80 million as part of an extension of the Joint federal-provincial
Investment in Affordable Housing (IAH) program. The budget also restated a previouslyannounced review of the Long-Term Affordable Housing Strategy (LTAHS) in 2015-16
(currently underway), and a few existing funding programs provided under the
Community Homelessness Prevention Initiative—$42 million announced in August, and
$587 million announced on March 30, 2015.
Social Services: Social assistance rate increases will take effect in October 2015 for
ODSP and November 2015 for Ontario Works. Municipalities will not be required to
cost-share the Ontario Works rate increase until January 2016.
Unlocking Value in Provincial Assets: The 2014 Budget announced that the Province
would begin to examine ways to unlock the value in its various assets. A target of $3.1
billion was set. This budget increases that target to $5.7 billion, or an increase of $2.6
billion. The increase will allow the Province to:
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Accelerate service enhancements to the GO transit system
Launch a new connecting links program to provide funding to municipal roads
that connect provincial highways
Develop a new program to expand the natural gas network to assist communities
in generating jobs and economic growth, and
Invest in Metrolinx’s Next Wave of transit projects such as the Hurontario-Main
Rail Transit project and rapid transit in Hamilton.
All proceeds from asset sales or related initiatives will be placed in the Trillium
Fund and used to support infrastructure investments under the Moving Ontario
program.
Attachment – AMO Update
MAY 12, 2015
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11. C.16 - CW INFO
April 23, 2015
2015 Ontario Budget Highlights
Today Finance Minister Charles Sousa delivered the 2015 Provincial Budget entitled,
"Building Ontario Up." On the whole, the budget delivers only modest changes from last
year’s plan. Program spending for 2015-16 will be $131.9 billion with a deficit of $8.5
billion. The outlook for 2016-17 includes a deficit of $4.8 billion. The Government is
proceeding with its plan to balance the budget by 2017-18.
Modest changes of municipal interest include:
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Moving Ontario Forward infrastructure funding increases by $2.6 billion to $31.5
billion over the next ten years in light of the higher value of Hydro One and other
assets.
The Government’s plan ($16 billion) for transit in the Greater Toronto and
Hamilton Area (GTHA) is proceeding. The budget includes specific details
regarding GTHA transit projects over the next ten years. The Government’s plan
for investments in the rest of the province has not yet been fully determined. It
will include the Ontario Community Infrastructure Fund, southern and northern
highway projects, expanded access to natural gas, and infrastructure
investments for the Ring of Fire. Most consultation is to occur on this $15 billion
component.
This funding also includes this week’s announcement of a new Connecting Links
program starting in 2016-17.
Specifically on the issue of consultation mentioned above, the Budget reads,
"Beginning in 2015, the Province will work with regions, communities, and the
private sector to design new programs and a framework to prioritize and evaluate
infrastructure needs based on their economic, social, and environmental returns."
The Ontario Municipal Partnership Fund envelope will be $505 million in 2016.
This is a slight improvement to the Government’s original plan for a 2016
envelope of $500 million. Northern Ontario municipalities will benefit exclusively.
The addition $5 million will be added to the Northern Communities Grant
Component. Municipalities in the remainder of the province will experience a $10
million cut to their allocations in 2016. This will be a considerable impact for
some communities in southern Ontario.
Social Assistance rates (ODSP and Ontario Works) will increase by 1%.
Municipalities will not be required to cost-share the Ontario Works rate increase
until January 2016.
The budget continues to honour the Provincial-Municipal Fiscal and Service
Delivery Review upload agreement of 2008.
The Government is launching a new Transfer Payment Administrative
Modernization initiative which will include municipalities. It remains to be
determined if this will simplify or add greater burden to the administrative and
reporting relationship between the orders of government. AMO’s pre-budget
MAY 12, 2015
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11. C.16 - CW INFO
submission urged the Government to simplify the reporting relationship, not add
greater complexity.
There is no change in the budget to scale back the Power Dam Special Payment
Program. Work continues on exploring options to reintroduce property tax for
these properties. An announcement on these changes is expected prior to 2016.
For Northern Ontario
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The budget announces plans to proceed with the long awaited Provincial Land
Tax Reform. These changes will be phased in over two years. In the first year,
residential taxpayers in unincorporated areas will pay an additional $10 per
$100,000 of assessed value in 2015 rising to $40 per $100,000 of assessed
value in 2016. In addition, the minimums per property will be set at $50 annually
in 2016. This reform addresses a longstanding concern of northern municipalities
for a more equitable property taxation system in unincorporated areas. These
revenues will go to the provincial treasury.
The Government is providing the forest industry with $60 million for the Forest
Access Roads Program in 2015-16.
Support for northern industrial electricity users will continue beyond March 2016
with annual assistance of $120 million.
AMO’s budget analysis will continue and we will provide further updates as required.
AMO Contact: Matthew Wilson, Senior Advisor, E-mail: [email protected],
416.971.9856 ext. 323.
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