: OMPF 2015 Technical Guide

Table of contents

Introduction

This guide outlines the grant parameters for the 2015 Ontario Municipal Partnership Fund (OMPF). It is intended to provide a technical overview of the funding program.

Overview

The OMPF is the Province’s main transfer payment to municipalities.  In 2015, the Province will provide a total of $515 million in unconditional funding to 388 municipalities through the OMPF. 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.

Provincial Uploads and OMPF Phase-Down

In 2012, the government announced the review of the OMPF and the phase-down of the program to $500 million by 2016.  The phase-down of the OMPF was part of the 2008 Provincial-Municipal Fiscal and Service Delivery Review (PMFSDR) agreement to upload social assistance benefit programs and court security and prisoner transportation costs off the property tax base.

Despite the adjustment to the program, overall support provided to municipalities will continue to increase, with the provincial uploads more than offsetting the reduction to the program.

Summary of Combined Provincial Support 2013-2016 ($ Millions)
Year
2013
2014
2015
2016
Provincial Uploads* 1,368 1,560 1,705 1,830
OMPF** 575 550 515 500
Combined Support 1,943 2,110 2,220 2,330
* Based on updated information and projections
** Confirmed in the 2014 Ontario Budget

OMPF Review and Redesign

The redesigned OMPF was introduced in 2014 following consultations with the Association of Municipalities of Ontario (AMO) and municipal representatives from across the province.  The program is comprised of four core grant components that reflect the following objectives:

  • continuing to support areas with limited property assessment;
  • continuing to recognize the challenges of northern and rural municipalities, while targeting funding to those with more challenging fiscal circumstances; and
  • assisting municipalities as they transition to the redesigned program.

A new grant component was announced as part of the redesigned program – the Northern and Rural Fiscal Circumstances Grant. This grant component was introduced in recognition that not all northern and rural municipalities are the same. The differences in the fiscal circumstances of these municipalities are recognized through this new grant which provides additional, targeted support to eligible municipalities based on their northern and rural Municipal Fiscal Circumstances Index (MFCI).

What’s New for 2015

Over the past year, the Ministry of Finance has continued to consult with AMO and other municipal representatives on how to best support municipalities through the program as the OMPF phases down. These discussions have informed the design of the 2015 program.

In the Province’s discussions with municipalities, two key recommendations emerged with respect to the program design:

  1. Funding should be further targeted to municipalities with the greatest needs; and
  2. The design of the program should ensure a manageable pace of change.

As a result, the 2015 OMPF has been designed to balance these recommendations by increasing targeted support to those municipalities with the most challenging fiscal circumstances, while continuing to provide a significant amount of transitional assistance.

Funding provided through the Northern and Rural Fiscal Circumstances Grant will begin to increase in order to further target support to those municipalities with the most challenging fiscal circumstances.  Compared to 2014, these municipalities will receive an increase of more than 30 per cent in per household funding allocated through this grant.

In addition, the significant amount of transitional assistance will provide municipalities with stability as they adjust to the redesigned program. This funding will ensure that municipalities receive a guaranteed level of support based on their 2014 OMPF allocation.  Municipalities in the north 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.

2015 Minimum Level of Support
(Per cent of 2014 OMPF Allocation)
Northern Ontario 90%
Other Regions 80%

These minimum levels of support will be enhanced, up to 100 per cent, for eligible northern and rural municipalities with more challenging fiscal circumstances, as measured by the MFCI (for further details on the MFCI see Appendix C).

Provincial Uploads

The Provincial-Municipal Fiscal and Service Delivery Review (PMFSDR) was completed in 2008. This review set out a new approach to the funding and delivery of services in Ontario and represents a significant milestone in the provincial–municipal partnership.

Through the PMFSDR, Ontario’s municipal partners, including AMO and the City of Toronto, identified the upload of social assistance benefit programs, as well as court security and prisoner transportation costs as their top priority.

In 2015, the Province will continue to deliver on its commitment in accordance with the timetable agreed to through the PMFSDR by:

  • continuing the phased upload of Ontario Works (OW) benefits; and
  • continuing the phased upload of court security and prisoner transportation costs
    (up to $125 million annually at maturity).

This builds on the government’s previous uploads of:

  • Ontario Drug Benefit (ODB) costs in 2008;
  • Ontario Disability Support Program (ODSP) administration costs in 2009; and
  • ODSP benefits, completed in 2011.

Furthermore, the Province will provide more than $230 million in additional support of municipal OW administration costs.

As a result of the uploads, 380 municipalities will see an estimated benefit of over $1.7 billion in 2015. See Appendix A for more details on the upload benefit.

2015 Upload Benefit to Municipalities
Program 2015
ODB Upload $219 million
ODSP Administration $85 million
ODSP Benefits $828 million
OW Benefits (57% uploaded in 2015) $266 million
Court Security and Prisoner Transportation (57% uploaded in 2015) $71 million
OW Administration additional support $234 million
Total Upload Benefit $1.7 billion
For additional details regarding the PMFSDR report, see www.ontario.ca/provincialmunicipalreview.

These uploads have ensured that more property tax dollars are available for important municipal priorities, including investments in infrastructure. It is important to note 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.

2015 Combined Benefit

Since 2009, municipal support provided to municipalities has been calculated as a combination of both the OMPF and provincial uploads.

In 2015, the Province will provide municipalities with a combined benefit of over $2.2 billion — more than three and a half times the level of funding provided in 2004. The combined benefit includes:

  • OMPF support of $515 million; and
  • The upload of over $1.7 billion in social assistance benefit program and court security and prisoner transportation costs.
2015 Combined Benefit Compared to Prior Years
  2004 2014 2015
A. CRF/OMPF $618 million $550 million $515 million
B. Provincial Uploads   $1.5 billion $1.7 billion
Combined Benefit (A + B) $618 million $2.1 billion $2.2 billion
Year-over-Year Increase $110 million
Increase Since 2004 $1.6 billion

Ongoing Support to Municipalities

The Province will provide municipalities with ongoing support of over $3.7 billion in 2015 — an increase of $2.6 billion from the level provided in 2003.

For 2015, the total ongoing provincial support, in addition to the combined benefit of OMPF and uploads, includes:

  • $499 million in funding to support 50:50 cost sharing of land ambulance costs;
  • $564 million  in public health funding, which includes the upload of public health costs from a provincial share of 50 per cent to 75 per cent;
  • $321 million in provincial gas tax funding for the 2014–15 program year; and
  • $100 million in annual funding to small, northern and rural municipalities through the new permanent Ontario Community Infrastructure Fund (OCIF).

By 2016, the Province will have increased ongoing support to municipalities to $3.8 billion a year — an increase of more than 250 per cent compared to 2003.

Ongoing Suppport to Municipalities Continues to Increase $1.1 billion in 2003 - $3.8 billion by 2016

Source: PMFSDR: “Facing the Future Together” (2008). Adjusted to reflect: OW administration funding model announced in 2011; phase-out of Toronto Pooling Compensation; OMPF phase down (2014 Ontario Budget); permanent, annual $100M Ontario Community Infrastructure Fund announced 2014; and updated projections.

Municipal Infrastructure Investments

Since 2003, the government has provided municipalities with approximately $13 billion in infrastructure funding.

Most recently, the 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. 

2015 Ontario Municipal Partnership Fund

The 2015 OMPF will provide $515 million through the following four core grant components and Transitional Assistance:

I. Assessment Equalization Grant - $149 million

Provides funding to municipalities with limited property assessment.

II. Northern Communities Grant - $79 million

Provides funding to all northern municipalities in recognition of their unique challenges.

III. Rural Communities Grant - $138 million

Provides funding to rural municipalities in recognition of their unique challenges.

IV. Northern and Rural Fiscal Circumstances Grant - $55 million

Provides additional, targeted funding to northern and rural municipalities based on their fiscal circumstances.

V. Transitional Assistance - $94 million

Ensures a guaranteed level of support to municipalities based on their 2014 OMPF allocation.

2015 OMPF Grant Components

I. Assessment Equalization Grant

The Assessment Equalization Grant provides funding to single- and lower-tier municipalities with limited property assessment due to lower property values and limited non-residential assessment.

To determine the grant amount, a total assessment differential (i.e., the total municipal assessment below the median per-household threshold of $252,500) is calculated for each municipality. Single- and lower-tier municipalities receive funding based on the total assessment differential.

Every $10,000 increment in a municipality’s total assessment differential results in an additional $39.60 in funding.

Example 1.1

Municipality A:

  • Total assessment per-household: $200,000
  • Assessment per-household below the $252,500 threshold:
    $252,500 - $200,000 = $52,500
  • Number of households: 2,000
  • Total assessment differential: $52,500 x 2,000 = $105,000,000

Grant Amount: $105,000,000 / $10,000 x $39.60 = $415,800

II. Northern Communities Grant

The Northern Communities Grant provides funding to all northern municipalities in recognition of the unique challenges they face.

The grant is based on the number of households and the per-household amount is $214.50.

Example 2.1

Municipality A (Northern)

  • Number of households: 1,300

Grant Amount: 1,300 x $214.50 = $278,850

III. Rural Communities Grant

The Rural Communities Grant provides funding to single- and lower-tier municipalities based on the proportion of their population residing in rural areas or small communities.

Municipalities with a Rural and Small Communities Measure (RSCM) of 75 per cent or more receive the full per-household amount of $134.50. Municipalities with an RSCM between 25 per cent and 75 per cent receive a portion of this funding on a sliding scale.

See Appendix B for additional information on the RSCM.

Every five percentage point increase in the RSCM between 25 per cent and 75 per cent results in an additional $13.45 per-household:

Rural Communities Grant
RSCM (%) 25 30 35 40 45 50 55 60 65 70 75+
Per-household amount ($) 0.0 13.45 26.90 40.35 53.80 67.25 80.70 94.15 107.60 121.05 134.50

Example 3.1

Municipality A:

  • Number of households: 1,300
  • RSCM: 80%

Grant Amount: 1,300 x $134.50 = $174,850

Municipality B:

  • Number of households: 3,000
  • RSCM: 55%

Grant Amount: 3,000 x $80.70 = $242,100

IV. Northern and Rural Fiscal Circumstances Grant

The Northern and Rural Fiscal Circumstances Grant was introduced in 2014 as part of the redesigned OMPF.

This grant is provided to municipalities eligible for funding through the Northern Communities and/or Rural Communities Grants, both of which provide a fixed per-household funding amount to northern as well as single- and lower-tier rural municipalities. In addition to these fixed per-household amounts, the grant provides targeted support in recognition that not all northern and rural municipalities have the same fiscal circumstances.

The Northern and Rural Fiscal Circumstances Grant provides targeted funding to eligible municipalities based on their relative fiscal circumstances, as measured by the Northern and Rural Municipal Fiscal Circumstances Index (MFCI). For additional details on the Northern and Rural MFCI, see Appendix C.

Funding provided through this grant has been enhanced in 2015 to provide additional targeted support to municipalities with the most challenging fiscal circumstances. Compared to 2014, these municipalities will receive an increase of more than 30 per cent in per household funding allocated through this grant. See Appendix D for additional information on the Northern and Rural Fiscal Circumstances Grant parameters.

Northern and rural municipalities with an RSCM of 75 per cent or greater

Northern municipalities, as well as single- and lower-tier rural municipalities with an RSCM of 75 per cent or greater, receive funding according to their MFCI as outlined in the table below.

Northern and Rural Fiscal Circumstances Grant
Relatively positive
circumstances
Relatively challenging
circumstances
MFCI 0 1 2 3 4 5 6 7 8 9 10
Per-household amount $0 $9 $18 $27 $36 $48 $60 $72 $85 $100 $120
Example 4.1

Municipality A (Northern):

  • MFCI: 7
  • Per-household amount: $72
  • Number of households: 1,200

Grant Amount: $72 x 1,200 = $86,400

Rural Municipalities with an RSCM between 25 and 75 per cent

Single- and lower-tier rural municipalities with an RSCM between 25 per cent and 75 per cent receive a portion of the per-household funding according to their RSCM. Additional municipality-specific details are provided in the customized 2015 Northern and Rural MFCI Workbook.

Example 4.2

Municipality B (Rural)

  • MFCI: 4
  • RSCM: 65%
Per–Household Funding at MFCI 4
RSCM 25% 35% 50% 65% 75%+
Per-household amount $0   $7.20 $18.00  $28.80  $36.00 

See Appendix D for more detailed information.

  • Adjusted per-household amount at RSCM of 65%: $28.80
  • Number of households: 2,500

Grant Amount: $28.80 x 2,500 = $72,000

V. Transitional Assistance

Transitional Assistance is designed to provide stability and assist municipalities in adjusting to the redesigned program. This assistance ensures that municipalities receive a guaranteed level of support based on their 2014 OMPF allocation. Specifically, municipalities in the north will receive at least 90 per cent of their 2014 allocation, while municipalities in other regions of the province will receive at least 80 per cent of their 2014 allocation.

These minimum levels of support will be enhanced, up to 100 per cent, for eligible northern and rural municipalities with more challenging fiscal circumstances, as measured by the northern and rural MFCI.

Enhanced 2015 Municipal Funding Level Based on Northern & Rural MFCI
MFCI 0 1 2 3 4 5 6 7 8 9 10
Northern Ontario 90.0% 90.0% 90.0% 90.0% 91.0% 92.0% 94.0% 96.0% 98.0% 100% 100%
Southern Ontario* 80.0% 80.0% 80.0% 80.0% 82.0% 84.0% 88.0% 92.0% 96.0% 100% 100%
* Transitional Assistance will be enhanced for municipalities that are eligible for the Northern and Rural Fiscal Circumstances Grant.

Example 5.1

Municipality A (Northern):

  • 2014 OMPF allocation: $250,000
  • 2015 minimum level of support for northern municipality: 90%
  • MFCI: 8
  • 2015 enhanced guaranteed level of support for MFCI 8: 98%
  • 2015 guaranteed funding amount: $250,000 x 98.0% = $245,000
  • Sum of 2015 OMPF grants prior to Transitional Assistance: $180,000

Transitional Assistance: $245,000 – $180,000 = $65,000


Example 5.2

Municipality B (Southern Rural):

  • 2014 OMPF allocation: $350,000
  • 2015 minimum level of support for southern municipality: 80%
  • MFCI: 7
  • 2015 enhanced guaranteed level of support for MFCI 7: 92%
  • 2015 guaranteed funding amount: $350,000 x 92% = $322,000
  • Sum of 2015 OMPF grants prior to Transitional Assistance: $205,000

Transitional Assistance: $322,000, – $205,000 = $117,000

Example 5.3

Municipality C (Southern Urban):

  • 2014 OMPF allocation: $250,000
  • 2015 minimum level of support for southern municipality: 80%
  • MFCI: n/a
  • 2015 guaranteed funding amount: $250,000 x 80% = $200,000
  • Sum of 2015 OMPF grants prior to Transitional Assistance: $125,000

Transitional Assistance: $200,000 – $125,000 = $75,000

Implementation

OMPF allocations are announced annually in time to support the municipal budget planning process, and payments are issued in quarterly installments to municipalities. All OMPF allocations are provided to municipalities as unconditional grants.

The Ministry of Finance calculates municipal allocations based on a defined set of data elements (see Appendix E).

Municipal Workbooks and Upload Benefit Report

In order to assist municipalities in better understanding the 2015 program, the Ministry of Finance has developed a customized set of municipal workbooks for each municipality. These include:

  1. 2015 Ontario Municipal Partnership Fund Workbook
  2. 2015 Northern and Rural Municipal Fiscal Circumstances Index Workbook

The workbooks provide municipality specific details and are shared electronically with municipal treasurers and clerk-treasurers.

In addition, municipalities receive a 2015 Upload Benefit Report which provides a detailed breakdown of their benefit from the provincial uploads. This report is also shared electronically with municipal treasurers and clerk-treasurers.

2015 Reporting Obligations

As in previous years, municipalities are required to submit the following to the Ministry of Municipal Affairs and Housing:

  • their 2014 Financial Information Returns (FIRs) by May 31, 2015;
  • their 2015 tax rate bylaws by September 30, 2015; and
  • outstanding 2013 FIRs and/or 2014 tax rate bylaws, if applicable.

Failure to meet these deadlines will result in the withholding of OMPF payments until these documents have been submitted to the Ministry.

Additional Information

This Technical Guide and other 2015 OMPF supporting materials are posted in English and French on the Ministry of Finance website at:

www.fin.gov.on.ca/en/budget/ompf/2015
www.fin.gov.on.ca/fr/budget/ompf/2015

For additional information regarding 2015 OMPF allocations or for other general inquiries about the program, e-mail your query and contact information to:
info.ompf@ontario.ca

Alternatively, municipalities may also contact their local Municipal Services Office of the Ministry of Municipal Affairs and Housing who can assist in directing their inquiry:

Municipal Services Offices
Ministry of Municipal Affairs and Housing

CENTRAL:
777 Bay Street, 2nd Floor
Toronto ON  M5G 2E5

General Inquiry: (416) 585-6226
Toll Free: 1-800-668-0230
Fax: (416) 585-6882

WESTERN:
659 Exeter Road, 2nd Floor
London ON  N6E 1L3

General Inquiry: (519) 873-4020
Toll Free: 1-800-265-4736
Fax: (519) 873-4018

EASTERN:
Rockwood House, 8 Estate Lane
Kingston ON  K7M 9A8

General Inquiry: (613) 545-2100
Toll Free: 1-800-267-9438
Fax: (613) 548-6822

NORTH (THUNDER BAY):
435 James St. S., Suite 223
Thunder Bay ON  P7E 6S7

General Inquiry: (705) 564-0120
Toll Free: 1-800-461-1193
Fax: (705) 564-6863

NORTH (SUDBURY):
159 Cedar Street, Suite 401
Sudbury ON  P3E 6A5

General Inquiry: (705) 564-0120
Toll Free: 1-800-461-1193
Fax: (705) 564-6863

Appendices


Appendix A: Upload Benefit to Municipalities

The Province fully uploaded Ontario Drug Benefit (ODB) Program costs in 2008, Ontario Disability Support Program (ODSP) administration costs in 2009 and ODSP benefits over two years in 2010 and 2011.

In 2015, the Province will continue the phased upload of Ontario Works (OW) benefits and court security and prisoner transportation costs.

Provincial Cost Shares

*Up to $125 million annually by 2018.
Note: OW administration continues to be cost shared on a 50:50 basis between the Province and municipalities. Beginning in 2011, OW administration costs reflect a revised funding approach which will provide more than $230 million to municipalities in additional support of these costs in 2015.

Appendix B: Rural and Small Community Measure

The Rural and Small Community Measure (RSCM) 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:

  1. Statistics Canada divides municipalities into small geographic areas, typically less than a few hundred residents.
  2. These areas are classified by Statistics Canada as rural areas or small communities if they meet one of the following conditions:
    • they have a population density of less than 400 per square kilometre;
    • they have a population density of greater than 400 per square kilometre but cannot be grouped with other adjacent areas (each also with a population density of greater than 400 per square kilometre), to produce a total population concentration greater than 1,000; or 
    • they are not economically integrated with a population centre of greater than 10,000 (see below)

Percentage of Area Population Included as a Small Community

OMPF calculations incorporate a minor adjustment to Statistics Canada’s classification of “small community”. This adjustment provides a transition between the small community and urban centre classification for areas with a population between 10,000 and 12,000 and is made on a sliding scale:

Area population 10,000 10,500 11,000 11,500 12,000
Percentage 100% 75% 50% 25% 0%

3. The RSCM is determined by calculating the proportion of a municipality’s population residing in areas that are classified as either rural or part of a small community.

Note: Additional details for individual municipalities are provided in their customized 2015 Ontario Municipal Partnership Fund Workbook.

Appendix C: Northern and Rural Municipal Fiscal Circumstances Index

The northern and rural Municipal Fiscal Circumstances Index (MFCI) measures a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province. The index was developed in close consultation with municipal representatives during the first phase of the OMPF review in 2012.

The northern and rural MFCI is determined by six indicators. These indicators are classified as either primary or secondary to reflect their relative importance in determining a municipality’s fiscal circumstances.

The indicators include:

Primary Indicators

  • Weighted Assessment per Household
  • Median Household Income

Secondary Indicators

  • Average Annual Change in Assessment (New Construction)
  • Employment Rate
  • Ratio of Working Age to Dependent Population
  • Per cent of Population Above Low-Income Threshold

A municipality’s northern and rural MFCI is determined through three steps:

  1. Indicator Score — Each primary and secondary indicator is scored based on its relationship to the median for northern and rural municipalities.
  2. Average Indicator Score — An average indicator score is calculated based on the average of both the primary and secondary indicators.
  3. Northern and Rural MFCI — This index reflects a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province, and is based on the relative results of each municipality’s average indicator score. The northern and rural MFCI is measured on a scale from 0 to 10. 

A lower MFCI corresponds to relatively positive fiscal circumstances, whereas a higher MFCI corresponds to more challenging fiscal circumstances. As a result, an MFCI of 5 corresponds to fiscal circumstances similar to the median for northern and rural municipalities.

Additional municipality-specific details are provided in the 2015 Northern and Rural MFCI Workbook.

1. Indicator Score

The indicator score has a range from -100 per cent to +100 per cent and reflects how the value of a municipality’s indicator compares to the median for northern and rural municipalities.

Indicator Value Above Median

An indicator value that is above the median will have a positive score, which is reflective of relatively positive fiscal circumstances.

The indicator score is calculated based on the position of the municipality’s indicator data between the median and highest value for northern and rural municipalities.

Indicator Value Below Median

An indicator value that is below the median will have a negative score, which is reflective of more challenging fiscal circumstances.

The indicator score is calculated based on the position of the municipality’s indicator data between the median and lowest value for northern and rural municipalities.

For example, an indicator score of +25 per cent indicates a data value is one quarter of the distance between the median and highest value, while an indicator score of -25 per cent indicates a data value is one quarter of the distance between the median and lowest value. An indicator score of 0 per cent reflects the median for northern and rural municipalities.

The following table outlines the median, highest and lowest values for each MFCI indicator. Illustrative examples of indicator score calculations are provided below.

MFCI Indicator Parameters
Primary Indicators Lowest Median Highest
Weighted Assessment per Household $39,000 $240,000 $640,000
Median Household Income $29,000 $61,000 $117,000
Secondary Indicators Lowest Median Highest
Average Annual Change in Assessment (New Construction) -1.7% 1.1% 3.9%
Employment Rate 22.0% 58.0% 84.0%
Ratio of Working Age to Dependent Population 120.0% 194.0% 320.0%
Per cent of Population Above Low-Income Threshold 62.0% 87.0% 100.0%

Example 1

Indicator: Median Household Income

Lowest Value Median Value Highest Value
$29,000 $61,000 $117,000

Example Municipality: Indicator Data Value = $53,000

A. Difference between Indicator Value and Median: $53,000 – $61,000 = -$8,000

Since the indicator value is below the median for rural and northern municipalities, the difference between the median and the lowest value for northern and rural municipalities is calculated.

B. Difference between Median and Lowest Value:      $61,000 – $29,000 = $32,000

C. Indicator Score = A / B:       -$8,000 / $32,000 = -25.0%



Example 2

Indicator: Ratio of Working Age to Dependent Population

Lowest Value Median Value Highest Value
120.0% 194.0% 320.0%

Example Municipality: Indicator Data Value = 257.0%

A.  Difference between Indicator Value and Median:  257.0% – 194.0% = 63.0%

Since the indicator value is above the median for northern and rural municipalities, the difference between the median and the highest value for northern and rural municipalities is calculated.

B.  Difference between Median and Highest Value:  320.0% – 194.0% = 126.0%

C. Indicator Score = A / B:        63.0% / 126.0% = 50.0%


2. Average Indicator Score

The average indicator score summarizes a municipality’s overall results on all six indicators. A municipality’s average indicator score is based on both the primary and secondary indicator average, as shown below.


Calculating Average Indicator Score

Average Indicator Score = (Primary Indicator Average + Secondary Indicator Average) / 2

Primary Indicator Average:  (A + B) / 2

A. Weighted Assessment per-Household indicator score

B. Median Household Income indicator score

Secondary Indicator Average:  (C + D + E + F) / 4

C. Average Annual Change in Assessment (New Construction) indicator score

D. Employment Rate indicator score

E. Ratio of Working Age to Dependent Population indicator score

F. Per cent of Population Above Low-Income Threshold indicator score

Note: A positive average indicator score reflects relatively positive fiscal circumstances, while a negative average indicator score reflects more challenging fiscal circumstances.

Example 3

Average Indicator Score

A. Weighted Assessment per Household indicator score: -9.0%

B. Median Household Income indicator score: -25.0%

Primary Indicator Average:  (-9.0% + (- 25.0%)) / 2 = -17.0%

C. Average Annual Change in Assessment (New Construction) indicator score: -85.0%

D. Employment Rate indicator score: 5.0%

E. Ratio of Working Age to Dependent Population indicator score: 50.0%

F. Per cent of Population Above Low-Income Threshold indicator score: -86.0%

Secondary Indicator Average:  (-85.0% + 5.0% + 50.0% + (- 86.0%)) / 4 = -29.0%

Average Indicator Score:  (-17.0% + (-29.0%)) / 2 = -23.0%


3. Determination of Northern and Rural MFCI

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

The northern and rural MFCI is measured on a scale of 0 to 10. A lower MFCI corresponds to relatively positive fiscal circumstances, while a higher MFCI corresponds to more challenging fiscal circumstances. A northern and rural MFCI of 5 corresponds to fiscal circumstances similar to the median for northern and rural municipalities.

A municipality’s MFCI is determined based on the value of the average indicator score. The example below presents how average indicator scores are used to determine a municipality’s MFCI.

Example 4

Average Indicator Score: -23.0%

Northern and Rural MFCI: 8.0

Average Indicator Score

Appendix D: Northern and rural fiscal circumstances grant parameters

The Northern and Rural MFCI is measured on a scale from 0 to 10. A lower MFCI corresponds to relatively positive fiscal circumstances, while a higher MFCI corresponds to more challenging fiscal circumstances. The following table provides additional details regarding 2015 enhancements to the Northern and Rural Fiscal Circumstances Grant.

Northern and Rural Fiscal Circumstances Grant
Relatively positive
circumstances
Relatively challenging
circumstances
MFCI 0 1 2 3 4 5 6 7 8 9 10
2014 Per-household
amount
$0 $9 $18 $27 $36 $45 $54 $63 $72 $81 $90
2015 Per-household
amount
$0 $9 $18 $27 $36 $48 $60 $72 $85 $100 $120
Percentage Change - - - - - 7% 11% 14% 18% 23% 33%

The following table supports the Northern and Rural Fiscal Circumstances Grant calculation for single- and lower-tier rural municipalities with an RSCM between 25 and 75 per cent. The table illustrates the per-household funding amount associated with a range of RSCM and MFCI values. 

Summary of MFCI Funding Levels Based on RSCM
MFCI
RSCM
0 1 2 3 4 5 6 7 8 9 10
25% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
35% $0 $1.8 $3.6 $5.4 $7.2 $9.6 $12.0 $14.4 $17.0 $20.0 $24.0
50% $0 $4.5 $9.0 $13.5 $18.0 $24.0 $30.0 $36.0 $42.5 $50.0 $60.0
65% $0 $7.2 $14.4 $21.6 $28.8 $38.4 $48.0 $57.6 $68.0 $80.0 $96.0
75% $0 $9.0 $18.0 $27.0 $36.0 $48.0 $60.0 $72.0 $85.0 $100.0 $120.0

Appendix E: Data Sources

Data Elements and Sources
Data Year Source(s)
OMPF
Weighted Assessment 2014 returned roll and 2015 starting tax ratios Municipal Property Assessment Corporation (MPAC) and municipal tax rate bylaws
PIL Weighted Assessment 2013 or 2012 Municipal FIRs
Number of Households 2014 MPAC Returned Roll
Median Household Income 2011 Statistics Canada
Rural and Small Community Measure 2011 Statistics Canada
Per cent of Population Above Low-Income Threshold 2011 Statistics Canada
Ratio of Working Age to Dependent Population 2011 Statistics Canada
Employment Rate 2011 Statistics Canada
Average Annual Change in Assessment (New Construction) 2009–2014 Online Property Tax Analysis System (OPTA)
Provincial Uploads
Social Assistance Benefit Programs 2015 estimates based on 2014 actuals MCSS/MMAH
Court Security and Prisoner Transportation 2015 MCSCS/OPP

Note: For municipality-specific details refer to customized 2015 workbooks developed by the Ministry of Finance.

Appendix F: Definitions

Average Annual Change in Assessment
(New Construction)

Measures the five-year (2009 – 2014) average annual change in a municipality's assessment, for example, as a result of new construction, excluding the impact of reassessment.

Average Indicator Score

Summarizes a municipality’s overall results on all six indicators, based on both the primary and secondary indicator average.

Combined Benefit

Since 2009, municipal benefits have been calculated as a combination of both the Ontario Municipal Partnership Fund (OMPF) and provincial uploads.

Employment Rate

Statistics Canada’s measure of number of employed persons, divided by persons aged 15 and over.

Households

Municipal Property Assessment Corporation’s (MPAC) measure of households based on the 2014 returned roll. Includes the following classes: (1) Residential Unit (RU) - Permanent households; (2) Residential Dwelling Unit (RDU) - Seasonal households such as cottages; and (3) Farm Residential Unit (FRU) - Farmlands on which a farm residence exists.

Indicator Score

Reflects the position of a municipality’s indicator data value relative to other municipalities, and has a range from -100 per cent to +100 per cent. A positive indicator score is reflective of relatively positive fiscal circumstances, while a negative score is reflective of more challenging fiscal circumstances.

Median Household Income

Statistics Canada’s measure of median income for all private households in 2010.

2015 OMPF Minimum Guarantee

The 2015 minimum guaranteed level of support based on 2014 OMPF allocations. Municipalities in the north 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 of their 2014 OMPF allocation. These minimum levels of support will be enhanced, up to 100 per cent, for municipalities that are eligible for the Northern and Rural Fiscal Circumstances Grant.

Northern and Rural Municipal Fiscal Circumstances Index (MFCI)

The northern and rural Municipal Fiscal Circumstances Index (MFCI) measures a municipality’s fiscal circumstances relative to other municipalities in the province, and ranges from 0 to 10. A lower northern and rural MFCI corresponds to relatively positive fiscal circumstances, whereas a higher MFCI corresponds to relatively more challenging fiscal circumstances. An MFCI of 5 corresponds to fiscal circumstances similar to the median for northern and rural municipalities.

Per cent of Population Above Low-Income Threshold

Reflects the Statistics Canada measure of the population in private households above the low-income threshold for Ontario compared to the total population in private households. The measure is based on after-tax income, and the low-income threshold is based on half the median adjusted household income in 2010.

Primary Indicators

The northern and rural MFCI is determined by six indicators which are classified as either primary or secondary to reflect their relative importance in determining a municipality’s fiscal circumstances. The primary indicators are weighted assessment per-household and median household income.

Property Tax Revenue

Represents the municipal property tax revenue as reported in municipal Financial Information Returns (Schedule 10, Line 0299).

Ratio of Working Age to Dependent Population

Statistics Canada’s measure of working age population, divided by youth (aged 14 and under) and senior population (aged 65 and over).

Rural and Small Communities Measure (RSCM)

The Rural and Small Community Measure (RSCM) 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 from the 2011 Census.

Secondary Indicators

The northern and rural MFCI is determined by six indicators which are classified as either primary or secondary to reflect their relative importance in determining a municipality’s fiscal circumstances. The secondary indicators are average annual change in assessment (new construction), employment rate, ratio of working age to dependent population, and per cent of population above low-income threshold.

Upload Benefit

Represents the benefit to municipalities as a result of the Province’s agreement to upload social assistance benefit programs and up to $125 million in court security and prisoner transportation costs. The upload benefit reflects costs municipalities no longer incur in 2015. 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.

Weighted Assessment
Per Household

Measures the size of the municipality's tax base. Refers to the total assessment for a municipality weighted by the tax ratio for each class of property (including payments in lieu of property taxes retained by the municipality) divided by the total number of households.