: 2013 OMPF Transition-Year Stable Funding - Questions and Answers

Q1. What is the OMPF?

A. The Ontario Municipal Partnership Fund (OMPF) is the Province’s main transfer payment to municipalities.

In February the government announced the review of the OMPF and phase-down of the program to $500 million by 2016, as agreed to through the Provincial-Municipal Fiscal and Service Delivery Review (PMFSDR) upload agreement.

Based on the feedback received to date, the government has announced that 2013 will be a transition year for the OMPF, during which Province will be providing municipalities with $575 million in stable funding.

Q2. What is 2013 OMPF Transition-Year Stable Funding?

A. For 2013, the Province will be providing municipalities with $575 million in stable funding. This OMPF Transition-Year Stable Funding will ensure that in 2013 municipalities will receive a guaranteed level of support based on their 2012 OMPF allocation.

In 2013, municipalities in the north will receive at least 95 per cent of their 2012 OMPF allocation, while municipalities in other regions of the province will receive at least 90 per cent. These minimum funding levels will be enhanced up to 100 percent for eligible municipalities with more challenging fiscal circumstances.

Q3. How much funding will municipalities receive through the OMPF’s Transition-Year Stable Funding in 2013?

A. In 2013, the Province will provide over $1.9 billion to municipalities through the combined benefit of both the OMPF’s Transition-Year Stable Funding and provincial uploads.
  • OMPF Transition-Year Stable Funding of $575 million; and
  • The upload of almost $1.4 billion in social assistance benefit program and court security and prisoner transportation costs.

The 2013 combined benefit will increase to more than three times the level of funding provided under the previous program in 2004.

Q4. If 2013 is a transition year, what will the program look like for 2014 and beyond?

A. For 2013, the government is introducing a more tailored approach that targets funding to municipalities facing more challenging fiscal circumstances using a northern and rural Municipal Fiscal Circumstances Index (MFCI).

We encourage municipalities to provide their feedback on this new approach as we continue the dialogue regarding the redesign of the OMPF in the coming months.

While decisions regarding the redesigned program have not yet been made, based on what we have already heard, the government acknowledges that there continues to be a need for ongoing assistance for municipalities, particularly those with more challenging fiscal circumstances.

As a result, the redesign of the program for 2014 is expected to improve the targeting of funding for northern and rural municipalities.

The government also understands that the details regarding the redesigned program will be an important aspect of the 2014 municipal budget planning process. With this in mind, we plan on announcing those allocations as early as possible next fall.

Q5. How were the 2013 funding levels determined for individual municipalities?

A. In  2013, the Province will provide municipalities with $575 million in stable funding. This OMPF Transition-Year Stable Funding will ensure that in 2013 municipalities will receive a guaranteed level of support based on their 2012 OMPF allocation.

In 2013, municipalities in the north will receive at least 95 per cent of their 2012 OMPF allocation, while municipalities in other regions of the province will receive at least 90 per cent.

These minimum 2013 funding levels will be enhanced, up to 100 per cent, for:

  • Northern and rural municipalities with more challenging fiscal circumstances; or
  • Municipalities that require additional support during the transition year as a result of the OMPF representing a more significant source of municipal revenue.
Q6. What is the northern and rural Municipal Fiscal Circumstances Index (MFCI)?

A. The northern and rural MFCI will be used to identify municipalities facing more challenging fiscal circumstances. During the transition year, the government will enhance the level of support provided to these municipalities in recognition that not all rural and northern municipalities are the same and that a one-size-fits all approach is not appropriate.

The northern and rural MFCI measures a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province.

The northern and rural MFCI is determined by six indicators including a municipality’s assessment base and median household income. The index is measured on a scale from 0 to 10. A lower MFCI corresponds to relatively positive fiscal circumstances, whereas a higher MFCI corresponds to relatively more challenging fiscal circumstances.

Q7. Is the government going to reconcile the OMPF?

A. The reconciliation of the OMPF is an annual decision.

Alongside the OMPF review, the government has also examined the issue of reconciliation.

The government has decided to discontinue future reconciliations in light of the significant level of support that has been provided to the municipal sector, as well as the Province’s fiscal challenges.

However, as part of the transition to the redesigned program, the government will reconcile the 2010 OMPF. This will be the final reconciliation payment under the OMPF. Details will be communicated to municipalities following the announcement of 2013 OMPF Transition-Year Stable Funding.

Q8. What is the government doing to help municipalities?

A. Our government has a very strong record of supporting and working with municipalities.

Despite the Province’s fiscal challenges, the government will continue to honour its commitment to the uploads in accordance with the timetable agreed to through the PMFSDR. The government understands the importance of this commitment to its municipal partners.

The Province will continue the phased upload of OW benefits and court security and prisoner transportation costs in 2013. This builds on the previous upload of ODB and ODSP costs. As a result of these uploads, municipalities will see almost $1.4 billion in reduced costs.

The provincial uploads and the Transition-Year Stable Funding will provide municipalities with over $1.9 billion in 2013. When combined with other investments such as the provincial gas tax program, increased funding for land ambulance and the upload of public health costs, the ongoing provincial support to municipalities will increase to approximately $3.4 billion in 2013. This is an increase of 200 per cent from the level provided in 2003.

In addition, the Province has provided municipalities with approximately $13 billion for infrastructure projects since 2003. These investments have helped municipalities to modernize and expand their transit systems, repair and upgrade roads and bridges, and revitalize community infrastructure.