AMO

ASSOCIATION OF MUNICIPALITIES OF ONTARIO structure,after administration costs and low-income rebates.Based on the 2017Ontario budget,that is less than 2 percent of all provincial revenues. Prior to reductions in the federal GST in 2006 and 2008,Ontarians paid a 15 percent sales tax.If imple- mented,the 1 percent increasewouldmeanOntarians would pay14 percent in sales tax.This would still be less than five other provinces. Municipal sales taxes are usedwidelyacross the United States,and globally,to fund local services. However,Canadianmunicipalitiesmust rely largely on property taxes,with some grants from federal and provincial governments,to deliver services,as well as build andmaintain critical infrastructure.Property taxes are tied to themarket value of property,not an individual’s ability to pay. One of the biggest challenges has been download- ing from the province-particularly in the 1990s.Over the years,5,000-kilometres of provincial roads,a range of social services,and social housingwere all put on the property taxbill–to the tune of about $3.9 billion annually. The property taxbase subsidized the provincial treasury.Thismeant important workon roads,bridges, transit,and other infrastructurewas put off to deal with the growing costs and demands of the download- ed human and communityhealth services. In 2008,the province agreed to slowly take back some social service and court costs.By2018,this“up- load”will be fully in effect.It is worth about $2 billion annually.These“repatriated’”dollars have been invest- ed in local infrastructure.But it isn’t nearlyenough. In fact,costs continue to grow,driven by inflation, as well as newunfunded mandates from the fed- eral and provincial gov- ernments.Over the years, AMOhas advocated for provincial policychanges that would cut local gov- ernment costs byhundreds of millions of dollars.But successive provincial gov- ernments have failed to act andmunicipal responsibili- ties continue to grow. AMOestimates that municipal operating costs are increasing $1 billion per year.Recent legislative changes,like increasing theminimumwage and policing reform,will likely further increase costs. “Today,local governments are expected to provide everything fromambulances to recreation to long- termcare and housing for our most vulnerable,”said LynnDollin,President of theAssociation of Munici- palities of Ontario.“We have more extremeweather causing costlydamage.And there are always newrules, regulations,and legislative requirements,which tend to increase costs.Property taxes can’t keep upwith growing needs.” Ontarians will go to the polls in a provincial elec- tion in June 2018.So far, the provincial leaders from all parties have rejected a sales tax increase and none, to date,have offered a sig- nificant concrete alternative to help close the almost $5 billion gap. Municipal leaders evaluatedmore than 40 different revenue options to look for the solution that would Across the world, municipalities use sales taxes to fund services. If we don’t look at a new approach, property taxes will rise rapidly, or services will be cut deeply. LYNN DOLLIN AMO PRESIDENT