QP Briefing. PCs hear their Ontario Municipal Partnership Fund review is causing municipalities ‘overwhelming anxiety and concern’

By Sneh Duggal

The Progressive Conservative government’s review of the Ontario Municipal Partnership Fund is causing “overwhelming anxiety and concern” for municipalities, attendees at a large conference in Toronto heard on Monday.

“Our advice is that changing this critical funding envelope would be a misstep that would cause difficult local impacts,” Jamie McGarvey, mayor of the Town of Parry Sound and president of the Association of Municipalities of Ontario (AMO), told provincial government ministers at the Rural Ontario Municipal Association (ROMA) conference. The three-day gathering, which wrapped up Tuesday, brought together more than 1,000 people from rural municipalities, organizations and the provincial government at the Sheraton Centre Toronto Hotel.

McGarvey shared his view during the ministers’ forum, commonly known as the “bear pit,” on Monday afternoon. The forum is a chance for municipal representatives to ask a panel of provincial ministers questions relevant to them and their communities.

The mayor said the fund is “critical” for the communities that receive it.

“Can you reduce our collective anxiety?” he asked Treasury Board President Peter Bethlenfalvy.

Bethlenfalvy said he understood the concerns; he pointed out that consultation “is a hallmark of this government” and that the government wanted to hear from those in the room.

“We recognize that it creates a level of anxiety, but we ask you to step forward because you are responsible for your municipalities, you are fiscally conservative and responsible and have demonstrated that,” he said.

According to a provincial government website, the OMPF is the provincial government’s “main general assistance grant to municipalities.” Last year, the province paid out $510 million to 389 municipalities through this fund.

Minister of Municipal Affairs and Housing Steve Clark prefaced his remarks to conference attendees Monday on the OMPF by saying that the PC government is “committed to restoring fiscal balance on a timetable that is reasonable, modest and pragmatic,” and that delivering services “efficiently” is not going to be easy for the provincial government or municipalities.

“Our government is committed to supporting municipalities in a way that is sustainable and responsible,” Clark said. “That’s why we’re conducting a review of the Ontario Municipal Partnership Fund, and we’re seeking municipal feedback on how best to refocus this program to better support northern and rural municipalities that need it most.”

He said details on the final allocations for this year will be released after the review is complete, and that the government was issuing “interim first quarterly payments” to municipalities in the meantime. The amounts would be equivalent to municipalities’ 2018 quarterly payments, but do “not reflect 2019 actual OMPF allocations,” Clark said. “We respect our municipal partners and are committed to working constructively with all local governments to find smarter and more efficient ways to make life better for our communities.”

Pat Vanini, executive director of AMO, called it the “unconditional grant” that the province gives to municipal governments. She said that normally municipalities receive notice of their allocations in November or December.

“For many of them this is important revenue to manage the operations of their government,” she said, adding that some municipalities were looking to borrow money on a line-of-credit to pay for some of their costs. She credited the government with hearing the concerns and deciding to distribute a quarterly payment to help municipal governments.

But there are still unknowns, she said.

“So on one hand we’ve reduced the anxiety on cash flow and paying bills in some of the small places, and then on the other side … we still don’t know exactly how to budget,” she said. “I think some municipalities will just go ahead and budget based on their best guess and if the best guess doesn’t pan out, they’ll have to go pack on their budgets.”

Kim Love, mayor of the Township of Madawaska Valley, said the OMPF is a “very important” source of funding for her municipality. Last year it represented $1.5 million out of a $7.2 million budget, she told QP Briefing on Tuesday.

“What we’re hearing is that we can look to have a reduction,” she said, adding that a reduction would mean tax increases for residents in Madawaska Valley. “Taxation is at a level where people really can’t (have) too many more increases; we have a lot of seniors, a lot of retirees and they’re struggling to pay their taxes.”

She said the fund is used to offset some of the township’s operating costs, such as policing or road expenses. Love said policing cost the municipality nearly $950,000 last year.

“It’s really important core services that we’re covering with these funds,” Love said. “We don’t have a lot of other sources of revenue, we don’t have a lot of fees and service charges that bring us any revenue.”

Love said she doesn’t know how the municipality would replace lost OMPF funding.

“We’ve already trimmed fat for years, I don’t know what we’d cut. We would have to reduce the level of service that we’re providing and that’s challenging when you don’t have a lot of extra services, you just have basic services,” she said.

While municipalities have started to receive payments for the first quarter of 2019, she said it’s still unclear what will happen for the rest of the year.

Many municipalities are finding themselves in a fix because they’re trying to work their budgets, she said.

“So now is when we need to know,” Love said.

Green Party Leader Mike Schreiner also called for the PCs to maintain the same amount of funding to the OMPF.

“That has real world implications in terms of service delivery at the local level,” Schreiner told QP Briefing at the sidelines of the conference. “We need the province to come in and provide the support that municipalities need to be able to fund the services that people rely on.”

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