Rural Ontario not a priority at Queen’s Park

Last week, two different perspectives appeared in The Record related to financial issues at the Township of North Dumfries.

Former mayor Rob Deutschmann indicated that while he is willing to apologize to taxpayers, there is no crisis. Meanwhile, columnist Luisa D’Amato called the predicament a “monumental mess” and implied that residents are getting nastier than Howard (“I’m as mad as hell, and I’m not going to take this anymore”) Beale in the 1976 movie “Network.”

As local media reports related to township financial statements, or the lack thereof, continue, responsibility has been directed internally to the administrative offices in Ayr. No blame, however, has been focused on Queen’s Park, since the legislature is not the environment for most of rural Ontario to contemplate as 2015 municipal budgets are finalized.

In the occasional debate over restructuring across Waterloo Region, it is generally agreed that the current governance structure adequately serves the townships as taxes collected from the region’s three cities, combined with a significant industrial base, are allocated for service delivery in the less populated rural areas.

But for other rural municipalities across Ontario lacking access to a substantial urban tax base, the situation is becoming hazardous.

Prior to public disclosure around problems in North Dumfries, the council of Howick Township, in northern Huron County, warned residents tax increases near 30 per cent were possible for the current year. The challenge, according to township officials, is continual cuts in provincial funding combined with accompanying increases for Ontario Provincial Police services.

In Norwich Township, south of Woodstock, provincial funding has been decreased by $280,600 this year, which alone translates into a 4.58 per cent tax increase. A township news release noted the province has cut in excess of $1million to their municipality over the last six years, which cannot be absorbed within the current budget structure.

The origin of the current challenges across rural Ontario dates back to the early 1990s when education was funded through local property taxes and provincial support, a system that generated huge discrepancies in per-pupil funding levels.

Generally, urban boards of education with large tax bases had more financial resources than rural boards, leading the Mike Harris government to shift the portfolio to the province for equalized student funding and, in turn, mandating municipal responsibility for services previously covered by the province, such as public health and social housing.

In theory, this realignment process was expected to be “revenue neutral” in that municipalities would not be assuming larger fiscal responsibilities. The actual result was many urban municipalities ended up in seven-figure surplus positions and a high percentage of their rural counterparts in deficits.

Prior to 1998, municipalities collected property taxes from farmers at a full residential rate for both municipal and education services. The province, through the Ministry of Agriculture, Food and Rural Affairs, provided a rebate of approximately 75 per cent.

The aforementioned realignment of services created a new provincial farm property class at 25 per cent of residential, and while taxes for farmers essentially remained at previous levels, the revenue for rural municipalities declined.

To mitigate this discrepancy, the province first established the Community Reinvestment Fund, for addressing temporary shortfalls. However, rural municipalities were still experiencing difficulties almost a decade later, and with a new Liberal administration at Queen’s Park, the reinvestment fund became the Ontario Municipal Partnership Fund.

An Ontario government news release from 2005 indicated the new fund would be equitable and effective;, however a decade later the funding problems persist and are more problematic for rural Ontario municipalities.

Kevin Marriott is mayor of Enniskillen Township, in Lambton County near Sarnia. A quick visit to the municipality’s website provides a photo of a combine harvesting soybeans at the top of the home page, leaving no doubts about the township’s economy.

In a Jan. 16, column, Marriott asserted that ongoing cuts to the Ontario Municipal Partnership Fund have resulted in the largest property tax increases in Ontario history.

Referencing the election night speech delivered by Premier Kathleen Wynne last June indicating that no one should be left behind, the new reality is that rural Ontario is not a priority for anyone at Queen’s Park.

According to Rob Deutchsmann, North Dumfries has a policy and procedures problem that can be fixed. But the province of Ontario has a far bigger problem that requires a far more complex solution.