City on guard for downloading in PC budget

Cities across Ontario, including Ottawa, are bracing for what may — or may not — be in the Progressive Conservatives' first provincial budget since being sent to Queen's Park last June.

Doug Ford's government tables its first budget Thursday

Ottawa Mayor Jim Watson, left, will be watching closely Thursday as PC Premier Doug Ford's government unveils its first budget. (CBC)

There's no end to the distractions when it comes to provincial announcements these days, from a new licence plate logo to lifting the ban on tailgate parties.

But when the Progressive Conservatives table their budget Thursday — their first since being sent to Queen's Park last June — municipal officials will be watching for a far less flashy issue: provincial transfers.

It may sound like dry fiscal policy, but the money that Ontario sends to cities is critical for helping them pay for everything from roads to social housing to paramedics.

Ottawa counting on $650M in 2019

Last month, Ottawa city council approved a $3.6-billion budget for 2019, with more than $650 million expected to come from the province.

If those funds suddenly shrink — a possibility given the province's cost-cutting and revenue-reducing mindset — that's a big problem for the city.

"I hope the provincial government respects the fact that we have agreements on a wide range of cost-sharing programs, whether it's public health or land ambulance," Mayor Jim Watson said earlier this week.

Watson hopes province won't 'download' in first-ever budget

4 years ago
Duration 0:54
Ottawa Mayor Jim Watson says he hopes Thursday's provincial budget won't put municipalities in a tight spot.

He worries about the province "giving us another version of Highway 174," referring to the previous PC government of Mike Harris, which downloaded tens of millions of dollars in costs to the city in the 1990s — including responsibility for the busy road that runs through Ottawa's east end.

Uncertainty around downloading

Indeed, it's the similarity between the Harris and Ford governments' rhetoric on slashing the deficit, which currently stands at $13.5 billion, that has some municipal watchers worried.

When those transfers are reduced, local governments have to either cut services, put off infrastructure improvements or increase local taxes — all bad options, according to the Association of Municipalities of Ontario (AMO).

"I think people understand that the government was elected on the basis of reducing the deficit," said Pat Vanini, AMO's executive director.

"The concern is that in the past, when that's happened, the [municipal] property tax base has become a way to subsidize the province."

Pulled injection site funding

In fact, the province has already downloaded one service to the City of Ottawa: the operation of the supervised drug consumption services at Ottawa Public Health's clinic on Clarence Street.

The service had been funded by the previous Liberal government, but the current government recently announced it will no longer pay for it, though it will continue to fund three other sites.

The city now needs to find $1.2 million a year to keep the Clarence Street site going.

"We recognize the province has financial challenges, but you don't really help the cause when you send it down to the local level where we have no one to download it to," Watson said. 

Otherwise, "the province, so far, has been pretty good to us," Watson conceded.

In March, Ford confirmed his government's $1.2-billion contribution to Ottawa's LRT expansion — one item the city doesn't have to worry about in Thursday's provincial budget. (Kate Porter/CBC)

In particular, the provincial government confirmed it would contribute $1.2 billion to the expansion of LRT.

During the past six months of negotiations, "there was some doubt where we were going to get the full amount," according to the Ottawa mayor.

But Premier Doug Ford came to Ottawa late last month to personally deliver the light-rail cash.

Making new homes cheaper

Although the city isn't looking for a big-ticket item in Thursday's budget, Watson does worry about the budget details that aren't always apparent at first glance: "What the language means, and how it's going to impact us."

For example, there's been some suggestion that the province may reduce development charges for new homes to help make housing more affordable. 

Development charges are added to home prices to pay for additional infrastructure that comes along with new home construction: think roads, sewers and water pipes.

Reducing development charges on new homes could put pressure on cities to make up the lost revenue. (Mark Blinch/Reuters)

But some cities, including Ottawa, also use development charges to fund other, softer amenities in new housing areas, like parks and libraries.

If the charges are reduced, taxpayers would have to pick up the costs.

In AMO's pre-budget submission, it argued that "development charges are not a root cause of the affordable housing and supply challenge in Ontario," and only account for five to seven cent of the cost of a new home.

Small municipalities anxious

Smaller municipalities, including those in eastern Ontario, will be anxious about provincial funds specifically aimed at smaller communities.

The Ontario Community Infrastructure Fund, which helps small and rural communities, is supposed to reach $300 million by 2019.

Small municipalities will be watching to make sure that commitment is met in this year's budget.

They'll also be worried about the Ontario Municipal Partnership Fund, which assists 389 of the province's 444 municipalities with "more challenging fiscal circumstances."

The PC government did eventually commit to the $505 million planned for this year, but the government has given notice that the program is under review.


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