| Jan 27, 2005

Feature Article January 27, 2005

Feature article January 27, 2005

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Community Reinvestment Funding: municipal officials want province to live up to its commitments.

By Jeff Green

As the four mayors who make up the County of Frontenac Council contemplate levying a 10% tax increase, they are expressing increasing frustration over the unwillingness of the provincial government to live up to their commitments under the Community Reinvestment Funding (CRF) program.


Community Reinvestment Funding is a program that was set up in 1998 to compensate municipal governments for the cost of delivering a range of services that were formerly delivered by the province itself. These services include policing, non-profit housing, Ontario Works, Childcare, and others. The CRF program was designed to pay an amount to the municipalities each year that was based on the previous years costs for delivering the services, then to be reconciled against the actual costs as they are determined. However, CRF funding was frozen at 2002 levels by the Conservative government. Since the election for the Liberals, municipalities have been arguing that CRF funds need to be reconciled for the 2003 and 2004 taxation years, and through the Association of Municipalities of Ontario (AMO), they have been participating with the Ministry of Finance in a process to modernize the CRF program.

As budget time for 2005 approaches, the Ministry of Finance sent a letter to municipalities. The letter says that the province is still considering a range of options and recommendations arising from the work of the CRF committee.

It also says we are announcing a stable funding guarantee for 2005 that will ensure that, as a minimum, each municipality will receive at least as much funding in 2005 as they have received to date through the CRF for 2004. In the letter, the Ministry also invites AMO to participate in a focussed consultation with provincial officials that will lead to the announcement of a new funding model in March of 2005.

What worries municipal politicians about this is the lack of a commitment to turn over the reconciliation dollars for 2003 and 2004.

Describing the problem, Frontenac County Warden Bill MacDonald said, In the case of Frontenac County, there is a shortfall of over $1.33 million for costs incurred in 2003 and 2004. This equates to approximately $56 per $100,000 of assessment this year for the CRF underfunding alone.

Elizabeth Fulton, the Chief Administrative Officer for Frontenac County, said that in response to the Ministry letter, municipalities may direct AMO not to conduct further discussions with the government before reconciliation for 2003 and 2004 takes place.

The fear is that the province will try to embark on a new funding scheme that will come into effect for the 2005 or even the 2006 taxation year without compensating municipal taxpayers for the overburdening they have faced over the past two years.

The province is acting like an individual who goes out to get a second mortgage and pretends that their first mortgage doesnt exist, MacDonald told his own Central Frontenac Council this week.

MacDonald had hoped to meet with senior members of the provincial Cabinet and Premier McGuinty on Friday of last week at a session organized between the Eastern Ontario Wardens Caucus and the provincial government in Kingston last Friday, but an emergency Cabinet meeting was called for that day. The Wardens Caucus met instead with four back bench MPPs from Eastern Ontario.

At that time the Wardens Caucus told the MPPs, We expect a firm commitment from the government to pay municipalities the amounts owed by February 21, 2005. We are all trying to do our budgets and we must be assured that we will not be short-changed by the province again, said Eastern Ontario Wardens Caucus Vice Chair and Warden of Lennox and Addington County Clayton McEwen.

All told, the Eastern Ontario Wardens estimate it will cost the province $12 million to pay the money they owe to the 12 Eastern Ontario counties. According to Bill MacDonald, it will cost the province $250 million province-wide.

In an interview this week, MacDonald said he thinks it is the provincial governments fixation with eliminating the provincial deficit in short order that lies at the root of their reluctance to come up with the money for CRF reconciliation.

They are trying to bring the deficit down from $5.6 to $2 billion in one year, MacDonald said. It took eight years to build up the deficit. Why dont they eliminate it over time? At the same time, they are focussing on Healthcare and Education. I may be a simple country mayor, but I say you can have the best hospitals and the best schools in the world, but if you dont have decent roads to drive on youll never get to either of them.

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