Ontario Budget 2008: Chapter I: A Stronger Ontario

SECTION B: STRONGER COMMUNITIES: INVESTING IN MUNICIPAL INFRASTRUCTURE AND COMMUNITIES

This Budget includes $1 billion in new funding for municipal infrastructure in 2007–08:

• $400 million for the Municipal Roads and Bridges Fund for communities outside Toronto
• $497 million for public transit in the Greater Toronto and Hamilton Area for Metrolinx projects and other transit priorities
• $100 million for infrastructure investments to rehabilitate existing social housing units, including energy-efficiency improvements. The government is also planning to make key public-sector social housing providers eligible for Infrastructure Ontario’s OSIFA loan program, which would provide up to $500 million in low-cost loans.

These investments will create an estimated 10,000 jobs during construction and will build on recent initiatives including the $450 million Municipal Infrastructure Investment Initiative (MIII), a program that enabled municipalities to apply for funding for their own highest-priority projects.

Municipalities will also have the opportunity to potentially benefit from the proposed Investing in Ontario Act (see Chapter II: Ontario’s Economic Outlook and Fiscal Plan).

Investing in Municipal Infrastructure

Municipal Roads and Bridges

Municipal roads and bridges are essential components of Ontario’s transportation network as they connect communities, and provide access to economic opportunities. In this Budget a new $400 million Municipal Roads and Bridges Fund will help municipalities invest in critical projects across the province. Funding will be distributed to municipalities outside Toronto, based on their share of Ontario’s road network in relation to population. This new investment builds on the success of a similar investment announced in the 2006 Budget.

The Province is investing $450 million in 2007–08 in the Municipal Infrastructure Investment Initiative, the combined total of $300 million announced in the 2007 Economic Outlook and Fiscal Review and $150 million announced at the 2008 Ontario Good Roads Association/Rural Ontario Municipal Association (OGRA/ROMA) conference. These investments will help communities across the province improve their infrastructure including roads, bridges, water and wastewater systems, and community facilities.

The Province is helping municipalities invest in local roadways designated as Connecting Links, which are specifically designated municipal roads that connect provincial highways. In 2006–07, the program invested $16 million to fund 37 projects and the 2007 Budget announced an additional one-time investment of $25 million to assist with municipal road improvements. In this Budget, the Province is investing $16 million to fund 35 projects.

Public Transit and Regional Transportation

Effective and expanded public transit will reduce traffic congestion and make it easier and faster to move people and goods, cut smog and provide cleaner air to breathe, help reduce greenhouse gas (GHG) emissions, and support sustainable urban development, which lead to stronger communities and a higher quality of life.

In this Budget the government is announcing its commitment to provide funding for all of Metrolinx’s recommended “Quick Win” projects. (See Table 1, Metrolinx Transit Projects.)

With the transit commitments in this Budget, the Province will have funded one-third of the cost of 360 new subway cars for the Toronto Transit Commission (TTC) and the infrastructure needed to improve capacity on the Yonge subway.

Table 1
Metrolinx Transit Projects

		Provincial Investment ($ Millions)
Hamilton	B-Line Improvements, King-Main Corridor	17.4
	A-Line Improvements, James-Upper James Corridor with service to Hamilton International Airport	12.4
	James Street North GO/VIA Station Gateway to Niagara	3.0
Peel	Dundas and Hurontario Higher-Order Transit Corridor Development	26.5
	Mississauga Transitway Hub, Airport-Renforth Gateway	39.0
	Bolton GO Transit Improvements	0.6
Halton	Dundas Street Bus Rapid Transit	57.6
York	VIVA Highway 7 – Pine Valley Drive to Kennedy Road	52.0
	VIVA Yonge Street – Richmond Hill Centre to 19th Avenue	19.0
	VIVA Yonge Street – 19th Avenue to Newmarket	29.0
Durham	Highway 2 Bus Rapid Transit Spine	82.3
	Cornell Terminal	5.6
Toronto	TTC Transit City Light Rail Transit (LRT) Head Start	7.1
	Yonge Subway Capacity Improvements	293.0
	Yonge Finch-Steeles Bus Rapid Transit	5.7 1
Inter-Regional	Bicycle Expansion: New bicycle-carrying devices on municipal transit vehicles and bicycle-storage spaces at stations across the GO Transit network	5.0
	GO Transit Rail Fleet Expansion: 20 additional bi-level passenger coaches for the GO Lakeshore Corridor	60.0
	GO Transit Double-Decker Buses: 10 new double-decker commuter buses for the Highway 407-403 Corridor, and to York University	9.0
	GO Track Expansion: New passing-track sections for the GO Bradford and GO Stouffville corridors	20.0
Total 2		744.2
1 Funding previously provided to the City of Toronto to meet the Canada Strategic Infrastructure Fund provincial commitment. 2 Funding provided through a combination of the 2007 Ontario Economic Outlook and Fiscal Review, the 2008 Budget and the ReNew Ontario Infrastructure Plan.

To move people and goods more efficiently, the government recently announced the MoveOntario 2020 rapid-transit action plan for the Greater Toronto Area and Hamilton. This multi-year, $17.5 billion investment proposes 52 projects that will result in 902 kilometres of new or improved rapid transit and is expected to create more than 175,000 jobs during construction.

The Province is committed to providing $11.5 billion of the funding for MoveOntario 2020 projects, and has called on the federal government to provide a minimum of $6 billion. For the plan to achieve its full potential, new long-term federal funding support will be required that goes beyond the infrastructure initiatives announced in recent federal budgets.

As part of MoveOntario 2020, the government will be expanding GO Transit service east of Oshawa.

Metrolinx is preparing a Regional Transportation Plan (RTP) for the GTHA, which will aim to improve the coordination and integration of all modes of transportation in the region. The RTP will also include Metrolinx’s recommendations on MoveOntario 2020 — in particular, the selection, prioritization and timing of projects in the plan.

To improve seamless transit service across the GTA, the Province also supports the introduction of PRESTO, the new regional fare card.

The Province will continue to provide gas tax revenues to public transit, for a total of $314 million in 2008, which will be distributed to 86 transit systems serving 108 communities across the province. The Ontario Bus Replacement Program is also helping municipal transit systems acquire newer and more accessible bus fleets.

In addition to its investments, the government is making transit planning more efficient through plans to reduce the provincial environmental assessment process for transit projects to six months.

GO Transit is an integral part of the transportation system in the Greater Toronto Area, City of Hamilton, and Simcoe, Dufferin and Wellington counties, and moves more than 48 million passengers every year. In 2007, GO Transit opened two new stations: Lisgar and Barrie South. The Budget includes new funding for infrastructure investments in GO Transit. These investments will improve services, modernize infrastructure and help address concerns raised in the Auditor General’s 2007 Annual Report.

Key investments include:

• $382 million in 2008–09 for rehabilitation projects, including improvements to GO Transit facilities at Union Station and other stations throughout the network, as well as replacement and renewal of GO Transit’s equipment
• $166 million over the next five years to expand GO Transit’s Bus Rapid Transit (BRT) system, including purchasing new double-decker motor coaches; developing bus maintenance facilities; making BRT investments complementary to the Mississauga Transitway; and creating an interregional transit hub at Kipling subway station
• $89 million over the next two years for GO Transit projects identified by Metrolinx, including the purchase of 20 new bi-level passenger rail coaches, 10 new double-decker commuter buses, and track expansions on GO Transit rail corridors.

In addition, the Province remains committed to transit improvements in the City of Ottawa in cooperation with municipal and federal partners. The Province will review the recently released vision for public transit in Ottawa and assess next steps with the City and federal government. The government remains committed to investing $200 million in transit in Ottawa.

Waterloo Region is one of Ontario’s fastest-growing and most innovative communities. The government is committed to working with its municipal, regional and federal partners to complete technical studies and an environmental assessment for a new rapid-transit system there and to supporting up to two-thirds of the project cost.

Municipal Infrastructure Investment Initiative (MIII)

The Province is investing $450 million in 2007–08 in the MIII, consisting of $300 million announced in the 2007 Economic Outlook and Fiscal Review and $150 million announced at the 2008 OGRA/ROMA conference. The MIII builds on last year’s successful Rural Infrastructure Investment Initiative (RIII). The eligibility criteria of the MIII have also been expanded: 462 municipalities and Local Service Boards applied for MIII, compared to 358 for RIII. Under MIII, municipalities were able to apply for one infrastructure project based on their own priorities. Over 80 per cent of the applications were for roads and bridges, water and wastewater, and culture and recreation projects. Grants will be announced by March 31, 2008.

Affordable Housing

In this Budget a new investment of $100 million is being provided to rehabilitate existing social housing units, including improving their energy efficiency.

The government intends to expand OSIFA loan eligibility to include key public-sector social housing providers. They would be able to access up to $500 million in low-cost loans to assist them in making necessary social housing infrastructure investments. The Province will also work with social housing experts to improve asset management in the sector.

Progress is well underway on the Province’s plan to create more affordable housing options for families and individuals across Ontario. Under the 2005 Canada–Ontario Affordable Housing Program, the Province has committed $301 million to create new rental and supportive housing and to help families and individuals with lower incomes purchase new homes.

Water and Wastewater

The new $450 million MIII is expected to provide significant funding for municipal water and wastewater projects.

Last year’s RIII program provided $56 million in response to water and wastewater project applications. The government, along with its federal partner, is investing nearly $380 million in water and wastewater systems in 60 municipalities through the Canada–Ontario Municipal Rural Infrastructure Fund. Infrastructure Ontario’s OSIFA loan program has committed $1.1 billion to municipal water and wastewater projects since 2003.

Partnerships for Municipal Financing

Infrastructure Ontario is responsible for managing the delivery of the Province’s Alternative Financing and Procurement (AFP) projects and for administering loans to municipalities and other organizations for infrastructure investments.

In addition to the expansion of Infrastructure Ontario’s OSIFA loan program to key public social housing providers, Local Services Boards and Ontario’s not-for-profit public professional arts training institutions would also be eligible for loans.

To date, the OSIFA loan program has committed to providing almost $2.8 billion in low-cost, long-term financing to almost 200 municipalities and other public-sector entities. Of the $1.6 billion advanced to date, nearly 700 infrastructure projects have been initiated to support priorities such as clean water, sewage treatment, waste management, road and bridge improvements, teaching and learning facilities, and recreational and sport facilities.

Investing in Economic Infrastructure

Windsor Border

International trade is integral to Ontario’s and Canada’s economic prosperity. The government is committed to ensuring efficient and uninterrupted trade with the United States through Ontario’s borders, gateways and trade corridors.

The government is working with federal and U.S. partners on a strategy to develop a new border crossing and associated infrastructure at the Windsor–Detroit Gateway. This initiative, the Detroit River International Crossing Study, is expected to provide recommendations in the spring of 2008 on a new transportation system to provide safe, efficient, secure and uninterrupted movement of people and goods across the Canada–U.S. border. This would support the local economy of the Windsor–Essex region, the provincial and state economies of Ontario and Michigan, and the national economies of Canada and the United States.

The recommendations are expected to address the location and design of a new river crossing, access road and customs plaza. The federal government is leading the development of the new river crossing and customs plaza and has earmarked an initial $400 million towards a commitment to fund 50 per cent of the total eligible capital costs of the access-road projects.

As part of the environmental assessment process, the work to select a preferred alternative for the access road is about to conclude. It is anticipated that construction will begin in 2009. Ontario will fully fund its share of the costs of the final proposed road link between Highway 401 and the new border crossing. Sufficient funds to cover the costs of the project are built into the government’s 10-year infrastructure plan. Construction on the project, which is the most important infrastructure undertaking in Canada and the United States, will also create thousands of jobs in Windsor. Further details will be announced in coming weeks.

This project will include unprecedented features to enhance the quality of life for people in the Windsor–Essex region while ensuring that traffic keeps moving.

Highways

This Budget includes new funding of $448 million over the next five years to accelerate projects to rehabilitate bridges that are part of the provincial highway network. This investment is expected to result in improvements to over 100 bridges in addition to those expected as part of ReNew Ontario.

Through the five-year ReNew Ontario infrastructure plan, the government is investing over $3.4 billion to improve the provincial highway network in southern Ontario and $1.8 billion in northern Ontario. In 2008–09, the government will invest $927 million in the Southern Ontario Highways Program and $557 million in the Northern Ontario Highways Program.

A number of new projects to improve highway safety in northern Ontario are also being added to ReNew Ontario. Projects will proceed on key corridors, including Highway 17 east and west of Thunder Bay; the Thunder Bay Expressway; Highway 17 around North Bay; and Highway 11 north of North Bay. This work will result in the addition of new passing lanes, intersection and curve improvements, illumination and variable message signs. Another new project includes capacity improvements to Highway 17 near Arnprior in eastern Ontario to address growing traffic and enhance safety.

The Province is making good progress on its plan to complete the extension of Highway 407 eastward from Brock Road in Pickering to Highway 35/115 in Clarington by 2013. Work related to the environmental assessment process, including route design, is underway.

Building Stronger Communities

A High Quality of Life in Northern and Rural Regions

Strong, vibrant rural and northern communities are important to Ontario’s economic success and quality of life. These regions have great potential to contribute to Ontario’s innovative new economy, but they also face unique challenges that require a focused and coordinated response. That is why the government is working with communities and stakeholders to give them the opportunities and tools they need to embark on a prosperous future.

The 2007 Budget announced the appointment of Dr. Robert Rosehart as the Northwestern Ontario Economic Facilitator to work with local people and businesses to inspire a new generation of growth in the region. The government wishes to thank Dr. Rosehart for his hard work and looks forward to studying his report and recommendations.

Building Opportunities in Northern Ontario

In addition to investments in education and health care, this Budget announces $508.7 million in strategic initiatives over four years to create opportunities in northern communities and secure the region’s place in Ontario’s new economy. These initiatives include:

• $302 million over the next four years for new investments in northern highways (see “Highways”)
• increasing funding to the Northern Ontario Heritage Fund Corporation (NOHFC) by $10 million per year from $60 million in 2007–08 to $100 million in 2011–12. The NOHFC works with northern entrepreneurs, communities and business organizations to support vital community infrastructure and economic development projects that create jobs and enhance the quality of life in the north
• $30 million over four years to support consultations via the Northern Table on sustainable land use planning and resource management in the Far North, a vital carbon sink. A carbon sink, such as a forest, is a reservoir that can absorb or “sequester” carbon dioxide from the atmosphere
• $25 million to support the creation of a centre for research and innovation in the bio-economy focused on forestry in Thunder Bay
• $15 million over four years to support the establishment of a centre for invasive species management in Sault Ste. Marie
• $9.7 million to complete funding of Ontario’s commitment of $14.7 million to develop a Molecular Medicine Research Centre in Thunder Bay
• $27 million over three years for a new Distance Grant for students in rural and remote areas, to assist with travel costs.

This Budget accelerates Business Education Tax (BET) rate cuts for northern businesses announced in the 2007 Budget. Business Education Tax rates will be reduced more quickly in 85 northern municipalities, benefiting more than 30,000 businesses of all sizes. This will ensure that northern businesses will benefit from the full BET reduction by 2010, four years earlier than originally announced. Northern businesses will benefit from total BET savings of more than $70 million over the next three years.

The government is also working with First Nations and northern stakeholders on a Growth Plan for Northern Ontario. The plan will focus on achieving and sustaining growth, and creating economic and lifestyle opportunities to live, work and raise families in the north.

Building Opportunities in Rural Ontario

To further enhance opportunities for growth and support a high quality of life in Ontario’s rural communities, this Budget announces:

• $30 million over four years to enhance broadband access in rural areas in southern Ontario, leveraging broadband infrastructure investment from private-sector businesses and public partners to grow and improve access to public services such as e-learning, e-health and e-government
• $30 million increase in funding over four years to the Rural Economic Development program (RED)
• $53 million over the next three years to add 50 more Family Health Teams by 2011–12, targeting rural and underserviced communities.

Led by the Ministry of Economic Development and Trade, the government is also working with stakeholders to develop the Eastern Ontario Development Fund. Through this fund, the government will provide support for business investment and economic development in the region. In addition, rural communities will benefit from initiatives to support key sectors such as manufacturing, agriculture and forestry, and from Ontario’s commitment to develop the bio-economy.

On February 25, 2008, the government announced it will invest a further $150 million in the existing $300 million MIII. The MIII provides municipalities across Ontario, outside Toronto, with funding to build and repair roads, bridges and other public facilities.

Rural communities will also benefit from the new $400 million Municipal Roads and Bridges Fund.

These new initiatives build on existing investments in rural health care, education, infrastructure, support for key industries and new economic opportunities.

Partnering with Municipalities

Investing in Municipalities

The government has made historic investments in municipalities and municipal partnerships. This has meant ongoing and increasing funding support for municipal operating costs; uploading costs that previous governments downloaded; and supporting municipal capital needs.

Since 2003, the Province has more than doubled its support to municipal operating budgets. In 2008, this amounts to $2.2 billion in ongoing operating support to municipalities.

The Ontario Municipal Partnership Fund (OMPF) assists municipalities with their social program costs, includes equalization measures, addresses challenges faced by northern and rural communities, and responds to policing costs in rural communities. It will transfer $870 million in 2008 — 41 per cent or $252 million more than 2004 transfers under the previous program.

Two cents per litre of the Provincial Gas Tax has been made available to municipalities annually for public transit. In 2008, $314 million is being distributed to transit systems that provide service in 108 communities across the province, for a total of more than $1.6 billion by 2010 since the program began.

The Province’s share of public health funding increased from 50 per cent in 2004 to 75 per cent in 2007.

Since 2006, the government has made an additional investment in land ambulance services of just over $300 million, meeting the commitment of moving to 50/50 funding of existing levels of land ambulance service by 2008.

The Province is phasing out Greater Toronto Area (GTA) pooling, which will eliminate a $200 million burden from the municipal property tax bases of contributing GTA municipalities. Under this plan, the Province is uploading responsibility for social assistance and social housing costs currently funded under the program.

In August 2007, the Premier announced an unprecedented upload of social program costs. The government uploaded the municipal share of the cost of the Ontario Drug Benefit (ODB) program in January 2008 and will begin uploading the Ontario Disability Support Program (ODSP) in 2009. By the time it is fully implemented in 2011, the upload will save municipalities over $900 million a year.

As a result of these investments, by 2011 the Province will have increased ongoing annual operating support to municipalities to $2.8 billion — an increase of more than $1.7 billion, or 160 per cent, compared to 2003.

Cutting Business Education Tax Rates

In the 2007 Budget, the government announced a $540 million cut to high BET rates over seven years — lowering high BET rates to a target maximum rate of 1.60 per cent. Business Education Tax reductions are key elements in the government’s overall strategy to enhance Ontario’s investment climate.

This initiative will also reduce the wide variation in BET rates across the province. The variation in rates distorts efficient business location decisions — placing many regions of Ontario at a disadvantage.

This Budget announces an accelerated plan for BET reductions in northern Ontario. The accelerated BET reductions will ensure that northern businesses will benefit from the full BET reduction by 2010, four years earlier than originally announced.

Northern businesses are defined as those that lie within any of the following districts: Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay and Timiskaming.

The accelerated BET reduction plan recognizes the unique challenges faced by northern businesses and responds to recent recommendations made by the Canadian Federation of Independent Business (CFIB) and others. In future years, consideration will be given to accelerating BET reductions in other parts of the province should the fiscal plan allow.

Accelerating BET reductions in northern Ontario will benefit more than 30,000 businesses of all sizes in 85 municipalities. Northern businesses will benefit from total BET savings of more than $70 million over the next three years. The BET reductions will improve the competitive position of northern Ontario businesses, create new jobs and strengthen the provincial economy overall.

Protecting and Improving Ontario’s Natural Environment

Since 2003, Ontario has become one of North America’s leading jurisdictions in protecting its air, water, green space and wilderness. Ontarians want to enjoy a clean and safe environment, explore nature, breathe clean air and drink clean water. Improving Ontario’s environment not only improves Ontarians’ quality of life, but also helps keep them healthy. An updated regulatory framework, introduction of waste-diversion programs and development of green technologies are key elements in addressing environmental challenges and building sustainable communities.

The government is making investments to protect Ontarians’ health by taking action on toxic substances:

• Providing $41 million over four years to support the development of toxics legislation and a toxics reduction strategy that will require companies that emit toxic substances to reduce their emissions over time; the government will work with Cancer Care Ontario and the Ontario Medical Association to identify, target and reduce the number of cancer-causing agents released in the environment. The Ministry of the Environment (MOE) will also work with the Ministry of Economic Development and Trade (MEDT) and the Ministry of Research and Innovation (MRI) on initiatives and strategies to support the development and installation of new technologies to reduce industry reliance on toxic chemicals.
• Allocating over $10 million over four years in support of the Province’s plan to ban the use of non-essential pesticides, which will foster the development and sale of green alternatives that are better for the environment and the health of Ontario families; funding would also be used for education, outreach and compliance.
• Working with Waste Diversion Ontario (WDO) to enhance household waste diversion by introducing a new Municipal Hazardous or Special Waste (MHSW) program. This program is expected to double the amount of MHSW diverted from landfill or the environment over the next five years, providing nearly $5 million over four years for additional waste inspectors to increase recycling compliance at industrial, commercial and institutional facilities; and almost $2 million over two years to remove 300,000 tires illegally stored in Middlesex County and review the inventory of scrap tires in the province.
• Providing $56 million over two years to eliminate polychlorinated biphenyl (PCB) contaminated soil stored in London. An additional $7 million will be invested in 2008–09 to clean up other sites.

This Budget includes a series of initiatives to improve the government’s ability to protect Ontario’s environment and promote environmental education:

• Allocating nearly $31 million over the next four years for new inspection resources and staff. These new resources will be mainly allocated to increase capacity for inspection and enforcement, including the government’s lead action plan.
• A 14 per cent increase in spending for the Ministry of the Environment (MOE) in 2008–09.
• Providing more than $12 million over four years for additional staff at the MOE, and over $23 million in 2007–08 in capital to 19 Conservation Authorities for technical studies to support the development of source protection plans required under the Clean Water Act, 2006.
• Investing over $10 million in 2008–09 to modernize the MOE’s lab and monitoring equipment, which is critical for water, air and soil sampling. In addition, $7.3 million will be invested over two years to upgrade the Ministry’s lab and monitoring facility in Toronto.
• Providing the Ministry of Natural Resources with funding totalling $27 million over four years to acquire ecologically sensitive lands for conservation purposes.
• Providing $20 million over four years for an environmental public education and outreach strategy that will coordinate all environmental public education efforts under one roof. The strategy aims to increase participation in new and existing environmental initiatives and encourage Ontarians to adopt greener behaviours.
• Allocating $6.5 million over four years for new resources to prepare teachers to teach the new environmental curriculum.