Welfare and court security costs downloaded onto municipalities in the 1990s will be taken back by Ontario's government over the next 10 years under an agreement announced Friday after a joint provincial-municipal review.

"The era of downloading is over," said Municipal Affairs Minister Jim Watson at a news conference held by the province, the Association of Municipalities of Ontario and the City of Toronto.

Peter Hume, president of the association, said the consensus report released at the news conference "turns the page on a dark chapter of provincial-municipal fiscal relations."

It will take until 2018 for the province to complete the plan outlined in the report, and it will be a few years before the changes begin to take effect.

Welfare costs — which are expected to soar with the current economic deceleration — will remain on the backs of local property-tax payers until 2010. The province won't start taking back the court-security costs until 2012. Mayors complain such costs add about seven per cent to local policing bills.

Hume suggested the timeline was influenced by the economy's prospects.

"The consensus reflected in this report sets out the changes that reflect the highest priorities of our municipal governments and what can be accomplished in current economic circumstances," said Hume, who is also an Ottawa city councillor.

Upload worth $600M

Finance Minister Dwight Duncan said the announcement represents new savings of $600 million.

"Does it take longer than I think all of us would like? Yes. Do we all have financial challenges? Yes," he said. "Are we all agreeing as to how to respond to them? Absolutely."

Toronto Mayor David Miller said the agreement rights a "lingering wrong."

"The actions of the past that burdened Ontario municipalities with costs for delivering provincially-mandated income support programs were, simply put, wrong," he said.

"The impact on municipalities was unnecessarily compounded over the years as we have been forced to divert millions of property-tax dollars from core municipal services to paying for provincial services."

According to the Ontario government, the total amount uploaded by the provincial government in recent years, including Friday's announcement, will have an annual net benefit of $1.5 billion to municipalities compared with fiscal 2007 by 2018.

However, the bulk of that had already been promised more than a year ago, when the government announced it was taking over the cost of the provincial drug benefits and disability support program. The former upload was completed in 2008 and the latter will start in 2009, to be completed in 2011.

The Association of Municipalities of Ontario estimates the cost of provincial services downloaded onto local governments in the 1990s by former premier Mike Harris's Progressive Conservative government to be about $3 billion a year.

Among the downloaded programs that the province has not committed to uploading is social housing, and Watson said there won't be any work done on taking back that social program until the spring.

Doug Reycraft, former head of the Association of Municipalities of Ontario, said he also wants the province to look at uploading the costs of repairing roads and bridges, another responsibility downloaded to municipalities in the 1990s.

With files from the Canadian Press