Mayor Larry O'Brien is pleased that a former mayor of the city has been named Ontario's municipal affairs and housing minister.

New Municipal Affairs Minister Jim Watson was mayor of Ottawa from 1997 to 2000.
(CBC)

Ottawa-West Nepean MPP Jim Watson, previously the minister of health promotion, was appointed to his new post in Premier Dalton McGuinty's cabinet on Tuesday.

O'Brien said Watson's background as Ottawa's mayor from 1997 to 2000 means the choice is good news for the city.

"This is obviously his hometown," O'Brien said. "He understands the situation we face here in Ottawa, and I think he will be able to take our messages forward to Queen's Park."

O'Brien added that he has found Watson co-operative, helpful and thoughtful while working with him on getting a residential drug treatment centre opened in eastern Ontario.

The City of Ottawa faces looming budget challenges that it blames largely on the province, which transferred many social service costs to municipalities under premier Mike Harris.

The city manager, Kent Kirkpatrick, has said that in order to balance next year's budget, city services must be cut even if property taxes are hiked 4.8 per cent.

O'Brien has proposed a two per cent infrastructure tax levy and an increase to the city's police budget, but wants no increase in regular property taxes. During his 2006 election campaign, he promised to keep property taxes frozen for four years.