Municipal governments are facing growing demand for new infrastructure, a growing backlog of infrastructure in need of maintenance, but have less money with which to fund them. Almost all municipal services are legally mandated by the provincial government, so cutting them isn’t an option. 

Businesses depend on local infrastructure, like roads, water and wastewater mains, public transit that brings their workers to work, and so on. There’s a lot of infrastructure in a poor state of repair, and having to maintain it while revenues decline is a big reason why municipal taxes keep going up.  

The Financial Accountability Office of Ontario (FAO) has reported that 45% of municipal infrastructure in the province is in a poor state of repair, and bringing it up to spec would cost $52 billion. Climate change will add another $6 billion to maintenance costs by the end of the decade and $66 billion by the end of the century.  

Over the next quarter century, Ontario’s population is expected to grow by 43%, and the Government of Ontario expects the population of Niagara to increase between 30 and 40%. Municipal operating costs in Ontario are increasing by $1 billion per year, just to maintain current service levels. 

Ontario already has the second highest property taxes and payments-in-lieu of taxes amongst all provinces and territories at $2,100 per capita. However, provincial program spending is the lowest in Canada at $13,065 per capita. Growing pressures like homelessness are adding more to the municipal service burden, but municipal governments don’t have many options to raise funds in other ways. Closing this gap through property taxes and user fees alone would mean doubling municipal property tax bills and user fees.  

Municipal revenues across the province and the country are growing slower than the rate of inflation, which means that municipalities are effectively collecting less money every year, leaving them with two options: cut services, or increase taxes. We’re looking for a third option. 

We’re seeking a new funding model for municipalities. The current one hasn’t been updated since the 1800s. We see the Municipal Growth Framework proposal of the Federation of Canadian Municipalities (FCM) as a good model, but in any case, there needs to be a rethink of how the provincial and federal governments fund municipalities.  

2024-ongoing