Municipal taxpayers facing hike in taxes or service cuts

ontario mayors

Ontario's municipalities say they may be forced to raise taxes or cut services due to provincial government cuts that will likely equal well over half a billion dollars in lost annual funding.

Since the Progressive Conservative government released its first budget last month that set out a plan to eliminate an $11.7-billion deficit over five years, word of various cuts has been reaching municipalities in dribs and drabs.

They are working to tally up the numbers and extract more information from the province - complaining that it hasn't been especially forthcoming - but preliminary figures show municipalities will be out at least several hundreds of millions of dollars a year once the changes are fully phased in.

Large municipality mayors have called it "downloading by stealth," saying the province is attempting to balance its budget on the backs of local taxpayers. The cuts are coming long after municipalities, which operate on calendar and not fiscal years, have passed their budgets.

They are weighing tax hikes, service cuts and/or delaying capital projects to make up for the losses.

"There only is one taxpayer," Toronto Mayor John Tory said recently.

"I've pointed out the irony of the minister of finance almost in the first three paragraphs of his budget speech saying, 'We're very proud of the fact that we didn't raise any taxes this year.' And yet they knew, I assume, they were going to be sending us letters and emails within hours or days, causing us to have to raise taxes," he said.

The City of Toronto alone estimates that the cuts will cost it $178 million this year.

Pat Vanini, the executive director of the Association of Municipalities of Ontario, said local governments are struggling to determine firm numbers on what the cuts will cost them.

"The challenge we've got is every day it seems like something new is coming," she said.

"It's not the first time this has happened, but it's really difficult to work with, particularly when you don't have really good, precise information. In the absence of that you do the best you can. You have to make certain assumptions."