: Ontario Municipal Partnership Fund - Heads of Council Letter

Ministry of Finance

Office of the Minister
7th Floor
Frost Building South
7 Queen's Park Cr
Toronto ON M7A 1Y7
Tel (416) 325-0400
Fax (416) 325-0374
www.fin.gov.on.ca             

Ministry of
Municipal Affairs and Housing

Office of the Minister
17th Floor
777 Bay Street
Toronto, ON  M5G 2E5
Tel (416) 585-7000
Fax (416) 585-6470
www.mah.gov.on.ca

November 13, 2014

Dear Head of Council:

We are writing to announce the release of the Ontario Municipal Partnership Fund (OMPF) program allocations for 2015.

In 2015, the province will provide a total of $515 million in unconditional funding through the OMPF to 388 municipalities across the province. This funding, combined with the municipal benefit resulting from the provincial uploads, will total over $ 2.2 billion in 2015. This is more than three and a half times the level of funding provided in 2004.

As you know, the review of the OMPF and the phase-down of the program to $500 million by 2016 was announced in 2012, and was also part of our 2008 upload agreement with the Association of Municipalities of Ontario (AMO) and other municipalities.

The OMPF was redesigned in 2014 following consultations with municipalities from across the province. The redesigned program supports municipalities with limited property assessment, and recognizes the unique challenges of northern and rural municipalities.  In addition, the program has been transformed to better target funding to northern and rural municipalities with the most challenging fiscal circumstances.

Over the past year, the Province has continued to consult with AMO and other municipal representatives on how best to support municipalities through the program.

The 2015 OMPF builds on the redesigned program that was announced last Fall, and responds to municipal input that the program should further target funding to municipalities with the greatest fiscal challenges.

The government also recognizes the importance of ensuring a manageable transition towards a program that is more targeted to these municipalities. In response to the feedback that we have heard through the consultations, the OMPF will continue to provide a significant amount of transitional assistance to ensure that municipalities receive a guaranteed level of support based on their 2014 OMPF allocation.

Northern municipalities will receive at least 90 per cent of their 2014 OMPF allocation, while municipalities in other regions of the province will receive at least 80 per cent.  These minimum levels of support will be enhanced up to 100 per cent for municipalities with more challenging fiscal circumstances.

The 2015 OMPF reflects the government's commitment to move toward a program that better targets funding to northern and rural municipalities with the most challenging fiscal circumstances. We look forward to continuing to work with our municipal partners to ensure the design of the OMPF continues to reflect the long-term priorities of municipalities.

The Ministry of Finance's (MOF) Provincial-Local Finance Division will be providing your municipal Treasurers and Clerk-Treasurers with further details on the 2015 OMPF.  This information and other supporting materials will be posted in both English and French on the MOF website:

http://www.fin.gov.on.ca/en/budget/ompf/2015  

We are also pleased to continue our commitment to the upload of municipal costs in accordance with the 2008 Provincial Municipal Fiscal and Service Delivery Review (PMFSDR) agreement.

In 2015, we will continue the phased upload of Ontario Works (OW) benefit costs and court security and prisoner transportation costs. This builds on our previous uploads of Ontario Drug Benefits (ODB) and Ontario Disability Support Program (ODSP). 

As a result of the upload, municipalities will benefit from more than $1.7 billion in reduced costs in 2015 alone. Combined with the OMPF, this is the equivalent of 13 per cent of municipal property tax revenue in the province.

Despite the phase-down of the OMPF, our commitment to the provincial uploads means that overall support to municipalities will continue to increase, with the provincial uploads more than offsetting the reduction to the program.

It is important to acknowledge that in two-tier systems, the removal of these costs off the property tax base benefits all local taxpayers including those residing in lower-tier municipalities. We encourage upper and lower tier municipalities to engage in discussions to ensure that the savings resulting from the uploads benefit their shared taxpayers in the most effective way possible.

Our government has a very strong record of supporting and working with municipalities.  In 2015, municipalities will benefit from approximately $3.7 billion in ongoing support through the OMPF, provincial uploads, and other provincial initiatives – an increase of $2.6 billion from the level provided in 2003.

Our significant investments in municipal infrastructure are supporting communities across Ontario. Most recently, our government announced the new permanent $100 million per year Ontario Community Infrastructure Fund (OCIF) to support the revitalization and repair of roads, bridges and other critical infrastructure in small, rural and northern communities.

We look forward to continuing to work with our municipal partners to strengthen and support communities across the province.

Sincerely,

Information copy
Original signed by

Charles Sousa
Minister
Ministry of Finance

Information copy
Original signed by

Ted McMeekin
Minister
Ministry of Municipal Affairs and Housing