January 2006
Ontario Ministry of Finance
The Ontario Municipal Partnership Fund: Grants and Components
Municipal Tier Distribution of Funding
Appendices
Appendix A – Definitions
Appendix B – Data Sources
Appendix C – Summary of 2006 Refinements and Updates
This document outlines the grant parameters for the Ontario Municipal Partnership Fund, and summarizes the updates and refinements introduced in 2006. It is intended to provide a technical overview of the funding model and the accompanying phase-in strategy.
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. The OMPF replaced the Community Reinvestment Fund (CRF) in 2005 as the Province's main transfer payment to municipalities.
In 2006, the OMPF will provide $707 million to 391, or 88 per cent, of municipalities. Compared to funding announced in March 2005, this represents an increase of $51 million, or 7.7 per cent. Compared to CRF payments in 2004, this represents an increase of $89 million, or 14.4 per cent.
Allocation |
Year-over-Year increase |
|
---|---|---|
2005 OMPF |
$656 million |
$38 million, or 6.1 per cent |
2006 OMPF |
$707 million |
$51 million, or 7.7 per cent |
Increased funding for the OMPF in 2006 further demonstrates the government's overall commitment to supporting municipalities, which also includes:
To ensure the OMPF's continuing responsiveness, a number of refinements to grant parameters have been introduced to provide enhanced support to municipalities:
The municipal reinvestment of the National Child Benefit savings is now an eligible social program cost for the Social Programs Grant and the Northern and Rural Social Programs Grant Component.
Upper-tier municipalities are now eligible for funding under this grant component, which provides support to communities experiencing revenue losses due to the tax treatment of farmland and managed forest properties.
Funding benchmarks for these two grant components have each been increased by 2%, to $153 and $230 per household, respectively.
The Police Services Grant has been enhanced to provide additional support to rural communities with high policing costs. Funding has been increased to 75% for the portion of eligible policing costs that exceeds $750 per household.
To better support municipalities in their transition to the OMPF, the four-year phase-in strategy introduced in 2005 has been extended by two years to limit the amount of grant reductions in 2009 and 2010.
In order to ensure that the OMPF remains up to date and responsive to changing local circumstances, data elements such as weighted assessment, social program, and policing costs have been adjusted to reflect the most recent data available prior to the release of the grant (see Appendix B).
In addition, OMPF benchmarks and thresholds have been adjusted to reflect the results of the recent reassessment:
Threshold/Benchmark Updates |
2005 |
2006 |
---|---|---|
|
0.20% |
0.18% |
|
|
|
|
15% |
14% |
See Appendix C for a summary of refinements and updates introduced in 2006.
The Ontario Municipal Partnership Fund will provide municipalities with $707 million in funding in 2006 through four grants:
Provides funding to assist municipalities with limited property assessment to support the municipal share of social program costs.
Provides funding to municipalities with limited property assessment through two components:
Provides funding to northern and rural communities to recognize their unique challenges through four components:
Provides funding to rural communities to support policing costs.
This grant provides funding to municipalities with limited property assessment to support the municipal share of eligible social program costs (for a definition of eligible costs see Appendix A). Funding is provided to municipalities whose costs for these programs exceed the revenue that could be raised by levying a 0.18% property tax rate on their assessment base.
This grant assists municipalities in meeting the municipal portion of the established cost-sharing arrangements for social programs. The Province will continue to fund its portion of the cost-shared programs, as well as provide additional funding through the OMPF to help municipalities pay for their share of these arrangements.
Distribution: The Social Programs Grant is distributed to upper- and single-tier municipalities.
Municipality A:
Threshold amount: $27,500,000 x 0.18% = $49,500
Grant: $125,000 – $49,500 = $75,500
This grant provides funding to municipalities that have limited property assessment through two components:
This component provides funding to municipalities with limited property assessment due to lower property values and limited non-residential assessment. Municipalities will receive funding if their total assessment per household is less than $185,000.
An overall assessment differential for each eligible municipality is calculated in order to determine the grant amount.
If a municipality has a total assessment per household of less than $185,000, it will receive funding based on the following scale:
Every $10,000 increment in a municipality's total assessment differential will result in an additional $60 in funding.
Distribution: The Assessment Equalization Grant Component is distributed to lower- and single-tier municipalities.
Municipality A:
Total assessment differential: $25,000 x 5,000 households = $125,000,000
Grant Component: $125,000,000 / $10,000 x $60 = $750,000
This component provides funding to municipalities with limited property assessment due to a significant amount of farmland and managed forest properties.
The grant provides funding equivalent to 300% of municipal revenue generated from farmland and managed forest assessment where these properties comprise more than 20% of the municipality's tax base. Municipalities that have between 5% and 20% of their tax base made up of these properties receive a portion of this funding on a sliding scale.
Every 2.5% increment in taxes generated from farmland and managed forest properties between 5% and 20% will result in additional funding equal to 50% of the taxes generated by these properties:
Farmland and Managed Forest Assessment Grant Component |
|||||||
Taxes generated by farmland and managed forest properties (%) |
5 |
7.5 |
10 |
12.5 |
15 |
17.5 |
20+ |
---|---|---|---|---|---|---|---|
Taxes allocated as grant funding (%) |
0 |
50 |
100 |
150 |
200 |
250 |
300 |
Distribution: This grant is distributed to upper-, lower-, and single-tier municipalities. It provides funding of up to 300% of these municipalities' respective share of revenue generated from these properties.
In 2005, only single- and lower-tier municipalities were eligible for this grant. Funding provided was up to 150% of municipal revenue generated from these properties. For lower-tier municipalities, funding was determined based on the total amount of upper- and lower-tier municipal revenue.
Municipality A:
Grant Component: $500,000 x 300% = $1,500,000
Municipality B:
Grant Component: $250,000 x 50% = $125,000
This grant provides funding to northern and rural communities in recognition of the unique challenges they face.
In order to support this grant, a Rural and Small Community Measure has been calculated for each municipality to determine the proportion of its population residing in rural areas or small communities (see Appendix A).
The grant has four components:
This component provides funding to municipalities based on the proportion of their population residing in rural areas or small communities.
Municipalities with a Rural and Small Community Measure of 75% or more receive the full per household amount of $153. Municipalities with a Rural and Small Community Measure between 25% and 75% receive a portion of this funding on a sliding scale.
Every 5% increment in the Rural and Small Community Measure between 25% and 75% results in an additional $15.30 per household :
Rural Communities Grant Component
|
|||||||||||
Rural and Small Community Measure (%) |
25 |
30 |
35 |
40 |
45 |
50 |
55 |
60 |
65 |
70 |
75+ |
---|---|---|---|---|---|---|---|---|---|---|---|
Per household |
0 |
15.3 |
30.6 |
45.9 |
61.2 |
76.5 |
91.8 |
107.1 |
122.4 |
137.7 |
153.0 |
Distribution: The Rural Communities Grant Component is distributed to lower- and single-tier municipalities.
Municipality A:
Grant Component: 400 x $153 = $61,200
Municipality B:
Grant Component: 600 x $76.50 = $45,900
This component provides funding to all municipalities in northern Ontario (see Appendix A) based on the number of households. The grant per household is $230.
Distribution: The Northern Communities Grant Component is distributed to all northern municipalities.
This component establishes a limit on the share of municipal tax revenue needed to support the municipal share of eligible social programs in northern and rural communities (see Appendix A).
Funding is provided if the municipal share of eligible social program costs (net of the Social Programs Grant) exceeds a threshold of 14% of municipal tax revenue.
All northern municipalities are eligible for this grant if their social program costs exceed the threshold.
Municipalities that are not in the north are eligible to receive the full amount of funding available through this grant component if they have a Rural and Small Community Measure of 75% or greater and their social program costs are greater than the threshold.
Municipalities with a Rural and Small Community Measure between 25% and 75% receive a portion of this funding on a sliding scale.
Every 5% increment in the Rural and Small Community Measure between 25% and 75% results in a 10% increase in funding for eligible costs greater than the 14% tax revenue threshold:
Northern and Rural Social Programs Grant Component |
|||||||||||
Rural and Small Community Measure (%) |
25 |
30 |
35 |
40 |
45 |
50 |
55 |
60 |
65 |
70 |
75+ |
---|---|---|---|---|---|---|---|---|---|---|---|
Residual social program costs funded (%) |
0 |
10 |
20 |
30 |
40 |
50 |
60 |
70 |
80 |
90 |
100 |
For northern and rural communities, this grant provides additional funding to complement the support provided through the Social Programs Grant.
Distribution: The Northern and Rural Social Programs Grant Component is distributed to upper- and single-tier municipalities.
Municipality A:
Residual social program costs above 14% threshold: $2,000,000 – $1,400,000 = $600,000
Grant Component: $600,000
Municipality B:
Residual social program costs above 14% threshold: $4,000,000 – $2,800,000 = $1,200,000
Grant Component: $1,200,000 x 70% = $840,000
This component provides ongoing funding to municipalities that otherwise would see decreases in funding of more than $150 per household, relative to funding received in 2004 through the Community Reinvestment Fund.
This grant component has been calculated on the basis of 2006 funding levels, and the funding parameter will be maintained at the $150 per household level in future years.
Distribution: The Stabilization Grant Component is distributed to upper-, lower-, and single-tier municipalities.
This grant provides funding to rural communities to support eligible policing costs (for definition see Appendix A).
For municipalities with a Rural and Small Community Measure of 75% or more, this grant provides funding equal to:
Municipalities with a Rural and Small Community Measure between 25% and 75% receive a portion of this funding on a sliding scale.
Every 5% increment in the Rural and Small Community Measure between 25% and 75% results in a 5% increase in funding for eligible costs between $150 and $750 per household, and a 7.5% increase in funding for eligible costs above $750.
Police Services Grant |
|||||||||||
Rural and Small Community Measure (%) |
25 |
30 |
35 |
40 |
45 |
50 |
55 |
60 |
65 |
70 |
75+ |
---|---|---|---|---|---|---|---|---|---|---|---|
Eligible costs above $150 threshold, up to $750, allocated as funding (%) |
0 |
5 |
10 |
15 |
20 |
25 |
30 |
35 |
40 |
45 |
50 |
Eligible costs above $750 threshold allocated as funding (%) |
0 |
7.5 |
15.0 |
22.5 |
30.0 |
37.5 |
45.0 |
52.5 |
60.0 |
67.5 |
75.0 |
For municipalities with a Rural and Small Community Measure of less than 75%, the Police Services Grant will be calculated as 50% of their 2002 eligible per household policing costs between $150 and $750, and 75% for costs above $750 — where this approach generates a greater amount than under the standard calculation detailed above. This is incorporated as a transitional measure that applies to only a small number of municipalities.
Distribution: The Police Services Grant is distributed to those municipalities that provide policing services.
Municipality A:
Grant: ($600,000 x 50%) + ($100,000 x 75%) = $375,000
Municipality B:
Grant: ($400,000 x 25%) = $100,000
The four-year phase-in strategy introduced in March 2005 has been extended by two years to provide further support to municipalities seeing lower funding in 2009 and 2010.
The resulting phase-in parameters are provided below:
Phase-In Parameters |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
---|---|---|---|---|---|---|
Maximum Per Household Increase ($) * |
80 |
90 |
100 |
150 |
- |
- |
Maximum Per Household Decrease ($) * |
0 |
25 |
50 |
75 |
100 |
|
Maximum Municipal |
0 |
500,000 |
1,000,000 |
1,500,000 |
2,000,000 |
*Per household revenue changes under the OMPF are compared to payments each municipality received under the CRF in 2004 and are expressed as the residential tax impact per household.
There will be no limit on funding increases after 2008.
Note: The maximum decrease for 2006 is the lesser of $10 per household or $250,000. However, with the one-time special assistance, no municipality will see revenue losses in 2006.
The OMPF allocations will be announced annually early in the municipal budget planning process, and flowed in quarterly payments to municipalities. All OMPF allocations will be provided to municipalities as unconditional grants.
The Ministry of Finance will calculate municipal allocations based on a defined set of data elements (see Appendix B).
Data elements are stable or live. The "stable" data elements will be established prior to the annual release of allocations, e.g., assessment data and number of households. Stable data elements will be based on the most recent data sets available prior to the allocation year.
A limited number of data elements will be "live" throughout the allocation year. Live data elements will be reconciled regularly to capture both increases and decreases in costs, e.g., policing costs and social program costs. This will result in adjustments to the Social Programs Grant, the Northern and Rural Social Programs Grant Component, and the Police Services Grant.
To assist municipalities in anticipating the impact of social program cost changes on their OMPF allocations, the Ministries of Finance, Community and Social Services, and Children and Youth Services have developed a Social Programs Report that is released regularly to municipal service managers and municipalities.
The Social Programs Report provides details on:
Funding provided through the Ontario Municipal Partnership Fund is distributed to upper-, lower-, and single-tier municipalities based on the level of government that is responsible for the service supported by the grant or grant component.
Tier Distribution of Funding |
Upper-Tier |
Lower-Tier |
Single-Tier |
I. Social Programs Grant |
x |
|
x |
II. Equalization Grant |
|
|
|
1. Assessment Equalization |
|
x |
x |
2. Farmland and Managed Forest Assessment |
x |
x |
x |
III. Northern and Rural Communities Grant |
|
|
|
1. Rural Communities |
|
x |
x |
2. Northern Communities |
|
|
x |
3. Northern and Rural Social Programs |
x |
|
x |
4. Stabilization |
x |
x |
x |
IV. Police Services Grant |
x |
x |
x |
Phase-in adjustments will be calculated independently for upper-, lower-, and single-tier municipalities.
This Technical Guide and other 2006 OMPF supporting materials are
posted in English and French on the Ministry of Finance website at http://www.fin.gov.on.ca/en/budget/ompf/
http://www.fin.gov.on.ca/fr/budget/ompf/
If you require additional information regarding your 2006 OMPF allocation, you may contact your local Municipal Services Office of the Ministry of Municipal Affairs and Housing, or e-mail your inquiries and your contact phone number to: info.ompf@fin.gov.on.ca.
Municipal Services OfficesMinistry of Municipal Affairs and Housing |
|
CENTRAL: |
General Inquiry: (416) 585-6226 |
SOUTHWESTERN: |
General Inquiry: (519) 873-4020 |
EASTERN: |
General Inquiry: (613) 548-4304 |
NORTHWESTERN: |
General Inquiry: (807) 475-1651 |
NORTHEASTERN: |
General Inquiry: (705) 564-0120 |
Eligible municipal social program costs refer to the costs that municipalities are responsible for under existing cost-sharing arrangements with the Province. Social programs that are eligible for inclusion in determining a municipality's total social program costs for the Ontario Municipal Partnership Fund include:
Eligible police costs include policing services provided by the Ontario Provincial Police (OPP) or a local force to meet the service standards defined in the Police Services Act.
Non-eligible police costs include bylaw enforcement and cases where service levels exceed those required by the Police Services Act.
Northern municipalities are those that lie within any of the following Districts: Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay, and Timiskaming.
The Rural and Small Community Measure represents the proportion of a municipality's population residing in rural areas or small communities. This approach recognizes that some municipalities include a mix of rural and non-rural areas.
The measure is based on Statistics Canada data and is calculated as follows:
Total municipal population = 1,000
Population in areas that are rural or in small communities = 700
Rural and Small Community Measure = 700/1,000 = 70%
In this document assessment refers to the total assessment for a municipality weighted by the tax ratio for each class of property plus payments in lieu of property taxes (PILs) made by either the provincial or federal government. (An equivalent PIL assessment is calculated by dividing actual PIL revenues by residential tax rates in each municipality.)
Data |
Year |
Source |
---|---|---|
Live Program Costs* |
||
Social Assistance |
2006 projections based on 2005 actuals and contract amounts, and 2005 inter-municipal cost shares |
Ministry of Community and Social Services (MCSS) |
Reinvestment of National Child Benefit Savings |
2006 projection based on 2004 actuals |
MCSS |
Ontario Provincial Police (OPP) |
2006 projected costs |
OPP |
Municipal Police |
2006 projected costs based on 2004 actuals |
Projection based on municipal Financial Information Returns (FIR) |
Other Program Costs |
||
Social Housing | 2002 devolved costs and 2005 inter-municipal cost shares |
Ministry of Municipal Affairs and Housing, Consolidated Municipal Service Managers, and District Social Services Administration Boards |
Taxation and Assessment Data |
||
Weighted Assessment |
2006 returned roll and 2006 starting tax ratios |
Municipal Property Assessment Corporation (MPAC) and municipal tax rate bylaws |
Farmland and Managed Forest Tax Revenue |
2005 returned roll and 2005 tax rates |
|
Estimated Own Purpose Taxation Estimated Payments in Lieu Revenue |
2004 |
Municipal FIRs |
Demographic Data |
||
Number of Households |
2005 |
MPAC Enumeration |
Rural and Small Community Measure |
2001 |
Census, Statistics Canada |
* Note: Live Program Costs and Cost Shares will be updated regularly to reflect more up-to-date costs.
Threshold, Benchmark, and Eligibility Criteria | 2005 | 2006 |
---|---|---|
I. Social Programs Grant | ||
|
0.20% | 0.18% |
|
Excluded | Included |
II. Equalization Grant | ||
1. Assessment Equalization |
||
|
$170,000 | $185,000 |
|
$62 | $60 |
2. Farmland and Managed Forest |
Single-tier: up to 150% of single-tier revenue | Single-, lower-, and upper-tiers: up to 300% of their respective revenues |
Lower-tier: up to 150% of total upper- and lower-tier revenue | ||
Upper-tier: Not eligible
|
||
III. Northern and Rural Communities Grant | ||
1. Rural Communities |
||
|
$150 | $153 |
2. Northern Communities |
||
|
$225 | $230 |
3. Northern and Rural Social Programs |
||
|
15% | 14% |
|
Excluded | Included |
IV. Police Service Grant | ||
|
50% of eligible costs over $150 per household | 50% of eligible costs between $150 and $750 per household, and 75% of eligible costs over $750 per household |
Phase-In Strategy | ||
|
No limit after 2008 | $75 per household to a maximum of $1.5 million in 2009; |
$100 per household to a maximum of $2 million in 2010 |