: OMPF 2016 Technical Guide

Table of Contents

Introduction

Overview

Provincial Uploads

2016 Combined Benefit

Ongoing Support to Municipalities

Municipal Infrastructure Investments

2016 Ontario Municipal Partnership Fund

2016 OMPF Grants Components

I. Assessment Equalization Grant
II. Northern Communities Grant
III. Rural Communities Grant
IV. Northern and Rural Fiscal Circumstances Grant
V. Transitional Assistance

Implementation

Municipal Workbooks and Upload Benefit Report
2016 Reporting Obligations

Additional Information

Appendices

Appendix A: Rural and Small Community Measure

Appendix B: Farm Area Measure

Appendix C: Summary of Rural Communties Grant Parameters based on RSCM

Appendix D: Northern and Rural Municipal Fiscal Circumstances Index

Appendix E: Northern and Rural Fiscal Circumstances Grant Parameters

Appendix F: Data Sources

Appendix G: Definitions

INTRODUCTION

This guide outlines the grant parameters for the 2016 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 2016, the Province will provide a total of $505 million in unconditional funding to 388 municipalities through the OMPF. This includes an additional $5 million in funding through the Northern Communities Grant to further support northern communities, as committed in the 2015 Ontario Budget. The OMPF, combined with the municipal benefit resulting from the provincial uploads, will total over $2.3 billion in 2016. This is nearly four 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 by 2016. This is the final year of the phase-down that 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 phase-down of 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 1,834
OMPF** 575 550 515 505
Combined Support 1,943 2,110 2,220 2,339
* Based on updated information and projections from the Ministry of Community and Social Services
** Confirmed in the 2015 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:

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

One of the key features of the redesigned program is the Northern and Rural Fiscal Circumstances Grant. This grant component was developed in close consultation with municipalities and 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 grant, which provides additional, targeted support to eligible municipalities based on their northern and rural Municipal Fiscal Circumstances Index (MFCI).

What’s New for 2016

As announced in the 2015 Ontario Budget, to further support northern municipalities, the Northern Communities Grant component of the OMPF program will be enhanced to $84 million in 2016, increasing the total 2016 OMPF to $505 million from the previously planned $500 million.

In 2015, the Ministry of Finance has continued to consult with AMO and other municipal representatives on refining the design of the program to ensure it meets the long-term priorities of municipalities.

The 2016 OMPF has been designed to balance the range of views expressed by municipalities through this year’s consultations. Specifically, the 2016 program will continue to increase targeted support to municipalities facing more challenging fiscal circumstances by increasing the Northern and Rural Fiscal Circumstances Grant to $67 million, an increase of more than 20 per cent to this grant component.

In addition, beginning in 2016, the Rural Communities Grant, which continues to support rural farming communities, will be enhanced to $143 million. This funding increase will be targeted to municipalities with the highest levels of farm land in recognition of their unique challenges.

Finally, in response to municipal feedback, the 2016 minimum funding guarantees for municipalities in southern Ontario will be increased to at least 85 per cent of their 2015 OMPF allocation. Northern municipalities will continue to receive at least 90 per cent of their 2015 OMPF allocation.

2016 Minimum Level of Support (Per cent of 2015 OMPF Allocation)
Northern Ontario 90%
Southern Regions 85%

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

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 2016, the Province will continue to deliver on its commitment to the phased upload of:

  • Ontario Works (OW) benefits; and
  • 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 make available $219 million in additional support of municipal OW administration costs.

As a result of the uploads, 379 municipalities will see an estimated benefit of over $1.8 billion in 2016.

2016 Upload Benefit to Municipalities
Program 2016
ODB Upload $231 million
ODSP Administration $85 million
ODSP Benefits $871 million
OW Benefits (71% uploaded in 2016) $337 million
Court Security and Prisoner Transportation (71% uploaded in 2016) $89 million
OW Administration additional support $219 million
Total Upload Benefit $1.8 billion

For additional details regarding the PMFSDR report, see http://www.mah.gov.on.ca/Page181.aspx.

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

2016 COMBINED BENEFIT

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

In 2016, the Province will provide municipalities with a combined benefit of over $2.3 billion — nearly four times the level of funding provided in 2004. The combined benefit includes:

  • OMPF support of $505 million; and
  • The upload of over $1.8 billion in social assistance benefit programs and court security and prisoner transportation costs.
2016 Combined Benefit Compared to Prior Years
  2004 2015 2016
CRF/OMPF $618 million $515 million $505 million
Provincial Uploads   $1.7 billion $1.8 billion
Combined Benefit (A + B) $618 million $2.2 billion $2.3 billion
Year-over-Year Increase
$100 million
Increase Since 2004 $1.7 billion

ONGOING SUPPORT TO MUNICIPALITIES

The Province will provide municipalities with ongoing support of over $3.8 billion in 2016 — an increase of $2.7 billion from the level provided in 2003.

For 2016, the total ongoing provincial support, in addition to the combined benefit of OMPF and uploads, includes:

  • $520 million in funding to support 50:50 cost sharing of land ambulance costs;
  • $582 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;
  • $332 million in provincial gas tax funding for the 2015–16 program year; and
  • $100 million in annual funding to small, northern and rural municipalities through the permanent Ontario Community Infrastructure Fund (OCIF).
Chart: Ongoing Support to Municipalities Continues to Increase $1.1 billion in 2003 - $3.8 billion by 2016

Source: Provincial-Municipal Fiscal and Service Delivery Review: “Facing the Future Together” (October 2008); adjusted to reflect the OW administration funding model announced in 2011, the phase-out of Toronto Pooling Compensation, the phase-down of the OMPF confirmed in the 2015 Ontario Budget, the additional $5 million for the 2016 OMPF announced in the 2015 Budget and the $100 million permanent annual Ontario Community Infrastructure Fund announced in 2014, and updated projections.

MUNICIPAL INFRASTRUCTURE INVESTMENTS

Ontario is making the largest infrastructure investment in Ontario’s history with more than $130 billion over ten years. These investments will benefit municipalities across the province.

Included in this plan is Moving Ontario Forward – the Province’s plan to invest $31.5 billion in transit, transportation and other priority infrastructure across Ontario over ten years. The plan includes about $16 billion for projects in the Greater Toronto and Hamilton Area (GTHA) and about $15 billion for projects outside the GTHA.

As part of Moving Ontario Forward, the permanent $100 million per year Ontario Community Infrastructure Fund (OCIF) is supporting the revitalization and repair of roads, bridges and other critical infrastructure in small, rural and northern communities.

Also included as part of this plan is the $15 million annual investment for the new Connecting Links program, beginning in 2016.

2016 ONTARIO MUNICIPAL PARTNERSHIP FUND

The 2016 OMPF will provide $505 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 – $84 million

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

III. Rural Communities Grant – $143 million

Provides funding to rural municipalities, in particular to rural farming communities, in recognition of their unique challenges.

IV. Northern and Rural Fiscal Circumstances Grant – $67 million

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

V. Transitional Assistance – $61 million

Ensures a guaranteed level of support to municipalities based on their 2015 OMPF allocation.

Note: The above numbers have been rounded.

2016 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 $263,000) 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 $36.70 in funding.

Example 1.1

Municipality A:

  • Total assessment per-household: $200,000
  • Assessment per-household below the $263,000 threshold: $263,000 - $200,000 = $63,000
  • Number of households: 2,000
  • Total assessment differential: $63,000 x 2,000 = $126,000,000

Grant Amount: $126,000,000 / $10,000 x $36.70 = $462,420

II. NORTHERN COMMUNITIES GRANT

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

As announced in the 2015 Ontario Budget, an additional $5 million in funding is being provided through the Northern Communities Grant in 2016 to further support northern municipalities. As a result, per-household support provided through this grant component will increase from the level provided in 2015.

The grant is based on the number of households and the per-household amount is $228.

Example 2.1

Municipality A (Northern)

  • Number of households: 1,300

Grant Amount: 1,300 x $228.00 = $296,400

III. RURAL COMMUNITIES GRANT

The Rural Communities Grant recognizes the unique challenges of rural municipalities, and particularly those of rural farming communities.

The Rural Communities Grant provides funding to single- and lower-tier municipalities based on the proportion of their population residing in rural areas and/or small communities, as measured by the Rural and Small Community Measure (RSCM).

Funding provided through the Rural Communities Grant has been enhanced in 2016 to provide additional targeted support to municipalities with the highest levels of farm land (i.e., where more than 70 per cent of land area is comprised of farm land. See the next section for details).

Municipalities with an RSCM of 75 per cent or more will receive $134 per household. Municipalities with an RSCM between 25 per cent and 75 per cent will receive a portion of this funding on a sliding scale. For additional information on the RSCM, see Appendix A.

Every five percentage point increase in the RSCM between 25 per cent and 75 per cent results in an additional $13.40 per-household:

Rural Communities Grant*
RSCM (%) 25 30 35 40 45 50 55 60 65 70 75+
Per-household amount ($) 0.0 13.4 26.8 40.2 53.6 67.0 80.4 93.8 107.2 120.6 134.0
*Note: The per-household amounts above are for municipalities where 70 per cent or less of municipal land area is comprised of farms.
Example 3.1

Municipality A:

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

Grant Amount: 1,300 x $134.00 = $174,200

Municipality B:

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

Grant Amount: 3,000 x $80.40 = $241,200

Rural municipalities where farm land represents more than 70 per cent of their land area

Beginning in 2016, per-household funding provided through the Rural Communities Grant will be enhanced for municipalities with the highest levels of farm land (i.e., where farm land represents more than 70 per cent of municipal land area) in recognition of their particular challenges.

The Ministry of Finance has worked with municipalities to develop a Farm Area Measure (FAM), which calculates the percentage of a municipality’s land area comprised of farm land. Municipalities with a FAM of more than 70 per cent will receive up to an additional $30 per household (See Appendix B for further information on the FAM).

Single- and lower-tier rural municipalities with a FAM of more than 70 per cent and an RSCM of 75 per cent or greater, receive funding according to the table outlined below.

Every 2 percentage point increase in the FAM between 70 per cent and 90 per cent results in an additional $3 per-household:

Rural Communities Grant for Municipalities with a FAM of
more than 70 per cent
Farm Area Measure (FAM) (%) 70 72 74 76 78 80 82 84 86 88 90+
Per-household  amount ($) 134.0 137.0 140.0 143.0 146.0 149.0 152.0 155.0 158.0 161.0 164.0
Example 3.2

Municipality A:

  • Number of households: 3,000
  • RSCM: 100%
  • FAM: 50%

Grant Amount: 3,000 x $134.00 = $402,000

Municipality B:

  • Number of households: 1,300
  • RSCM: 100%
  • FAM: 80%

Grant Amount: 1,300 x $149.00 = $193,700

Municipality C:

  • Number of households: 3,000
  • RSCM: 100%
  • FAM: 93%

Grant Amount: 3,000 x $164.00 = $492,000

Rural municipalities with an RSCM between 25 and 75 per cent

Single- and lower-tier rural municipalities with a FAM of more than 70 per cent and an RSCM between 25 per cent and 75 per cent, will receive a portion of the funding according to their RSCM.

The following table provides the per-household funding for a municipality with an RSCM of 50 per cent. (See Appendix C for a summary of Rural Communities Grant parameters based on the RSCM).

Rural Communities Grant for Municipalities with an RSCM of 50 per cent and a FAM of
more than 70 per cent
Farm Area Measure (FAM) (%) 70 72 74 76 78 80 82 84 86 88 90+
Per-household amount ($) 67.0 68.5 70.0 71.5 73.0 74.5 76.0 77.5 79.0 80.5 82.0
Example 3.3

Municipality A:

  • Number of households: 1,300
  • RSCM: 50%
  • FAM: 80%

Grant Amount: 1,300 x $74.50 = $96,850

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 Northern and Rural Fiscal Circumstances 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 D.

Funding provided through this grant has been enhanced in 2016 to provide additional targeted support to municipalities with the most challenging fiscal circumstances. Compared to 2015, these municipalities will receive an increase of more than 30 per cent in per-household funding allocated through this grant. See Appendix E 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
   
arrow pointing from relatively positive circumstances on the left to relatively challenging circumstances on the right
MFCI 0 1 2 3 4 5 6 7 8 9 10
Per-household amount $0 $10 $20 $30 $40 $55 $70 $90 $110 $130 $160
Example 4.1

Municipality A (Northern):

  • MFCI: 7
  • Per-household amount: $90
  • Number of households: 1,200

Grant Amount: $90 x 1,200 = $108,000

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 2016 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 $8.00 $20.00 $32.00 $40.00
See Appendix E for more detailed information.
  • Adjusted per-household amount at RSCM of 65%: $32.00
  • Number of households: 2,500

Grant Amount: $32.00  x 2,500 = $80,000

V. TRANSITIONAL ASSISTANCE

Transitional Assistance is designed to assist municipalities in adjusting to the redesigned program. This funding ensures that municipalities receive a guaranteed level of support based on their 2015 OMPF allocation.

In 2016, the minimum funding guarantees for municipalities in southern Ontario will be increased to at least 85 per cent of their 2015 OMPF allocation. Northern municipalities will continue to receive at least 90 per cent of their 2015 OMPF allocation.

These minimum levels of support will continue to 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.

2016 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 85.0% 85.0% 85.0% 85.0% 86.5% 88.0% 91.0% 94.0% 97.0% 100% 100%
Example 5.1

Municipality A (Northern):

  • 2015 OMPF allocation: $250,000
  • 2016 minimum level of support for northern municipality: 90%
  • MFCI: 8
  • 2016 enhanced guaranteed level of support for MFCI 8: 98%
  • 2016 guaranteed funding amount: $250,000 x 98% = $245,000
  • Sum of 2016 OMPF grants prior to Transitional Assistance: $180,000

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

Example 5.2

Municipality B (Southern Rural):

  • 2015 OMPF allocation: $350,000
  • 2016 minimum level of support for southern municipality: 85%
  • MFCI: 7
  • 2016 enhanced guaranteed level of support for MFCI 7: 94%
  • 2016 guaranteed funding amount: $350,000 x 94% = $329,000
  • Sum of 2016 OMPF grants prior to Transitional Assistance: $205,000

Transitional Assistance: $329,000 – $205,000 = $124,000

Example 5.3

Municipality C (Southern Urban):

  • 2015 OMPF allocation: $250,000
  • 2016 minimum level of support for southern municipality: 85%
  • MFCI: n/a
  • 2016 guaranteed funding amount: $250,000 x 85% = $212,500
  • Sum of 2016 OMPF grants prior to Transitional Assistance: $125,000

Transitional Assistance: $212,500 – $125,000 = $87,500

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 F).

MUNICIPAL WORKBOOKS AND UPLOAD BENEFIT REPORT

In order to assist municipalities in better understanding the 2016 program, the Ministry of Finance has developed a customized set of municipal workbooks for each municipality. These include:

  1. 2016 Ontario Municipal Partnership Fund Workbook
  2. 2016 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 2016 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.

2016 REPORTING OBLIGATIONS

Municipalities are required to submit their 2015 Financial Information Returns (FIRs) to the Ministry of Municipal Affairs and Housing (MMAH) by May 31, 2016.

Municipalities are also required to submit their 2016 tax rates through the Online Property Tax Analysis (OPTA) System or to MMAH by September 30, 2016.

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

ADDITIONAL INFORMATION

This Technical Guide and other 2016 OMPF supporting materials are posted in English and French on the Ministry of Finance website at:

www.fin.gov.on.ca/en/budget/ompf/2016         

www.fin.gov.on.ca/fr/budget/ompf/2016

For additional information regarding 2016 OMPF allocations or for other general inquiries about the program, e-mail your query and contact information to: info.ompf@ontario.ca

Municipal Services Offices at the Ministry of Municipal Affairs and Housing

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, 13th 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

Municipalities with financial challenges should develop strategies that will help build financial resilience over time. The Ministry of Municipal Affairs and Housing (MMAH) and Municipal Services Offices (MSO) provide advice and assistance to municipalities in developing targeted action plans with the goal of achieving financial sustainability.

To find the MSO in your area, please see above or visit MMAH’s website at: www.mah.gov.on.ca.

APPENDICES

APPENDIX A: RURAL AND SMALL COMMUNITY MEASURE

The Rural and Small Community Measure (RSCM) represents the proportion of a municipality’s population residing in rural areas and/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%
  1. 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 2016 Ontario Municipal Partnership Fund Workbook.

APPENDIX B: FARM AREA MEASURE

The Farm Area Measure (FAM) represents the percentage of a municipality’s land area comprised of farm land. The measure was developed in response to feedback from some municipalities that the OMPF should recognize the variation in farm land across the province.

The FAM is calculated as follows:

  Farm Land Area = Farm Area Measure
  Municipal Land Area

A municipality’s FAM is determined using the following components:

  1. Farm Land Area, which is equal to acres of land for properties in the farm property tax class, as of December 31st, 2014.
    1. The Ministry of Agriculture, Food and Rural Affairs (OMAFRA) administers the application process for the farm property tax class, and is responsible for reviewing eligibility criteria before a property can be placed in the farm property tax class. These criteria include:
      • The property must be assessed and valued as farm land.
      • The farming business generates at least $7,000 in gross revenue per year.
      • The farming business has a valid Farm Business Registration number from Agricorp or a valid exemption.
      • The property is being used for a farming business by either the owner or tenant farmer or both.
    2. The acreage of properties in the farm property tax class is determined using the Ontario Parcel database. This database was developed in partnership between the Ministry of Natural Resources, MPAC and Teranet Enterprises Inc., and provides information on the land area for each individual property or parcel of land in the province.
  2. Municipal Land Area, which represents the number of acres of land in a municipality and reflects municipal boundaries, as of December 31st, 2014. This measure is based on the Spatial Data Infrastructure (SDI) from Statistics Canada, and excludes bodies of water.

APPENDIX C: SUMMARY OF RURAL COMMUNITIES GRANT PARAMETERS BASED ON RSCM

The following table supports the Rural Communities Grant calculation for single- and lower-tier rural municipalities with an RSCM between 25 and 75 per cent and a FAM of 70 per cent or more.

Rural Communities Grant Funding Levels Based on RSCM
FAM→
RSCM↓
FAM
70%
FAM
72%
FAM
74%
FAM
76%
FAM
78%
FAM
80%
FAM
82%
FAM
84%
FAM
86%
FAM
88%
FAM
90%+
RSCM 25% $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
RSCM 35% $26.8 $27.4 $28.0 $28.6 $29.2 $29.8 $30.4 $31.0 $31.6 $32.2 $32.8
RSCM 50 % $67.0 $68.5 $70.0 $71.5 $73.0 $74.5 $76.0 $77.5 $79.0 $80.5 $82.0
RSCM 65% $107.2 $109.6 $112.0 $114.4 $116.8 $119.2 $121.6 $124.0 $126.4 $128.8 $131.2
RSCM 75% $134.0 $137.0 $140.0 $143.0 $146.0 $149.0 $152.0 $155.0 $158.0 $161.0 $164.0

APPENDIX D: 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 2016 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 $41,000 $251,000 $662,000
Median Household Income $29,000 $61,000 $117,000
MFCI Indicator Parameters
Secondary Indicators
  Lowest Median Highest
Average Annual Change in Assessment (New Construction) -1.3% 1.1% 3.6%
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

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

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

  1. Difference between Median and Lowest Value: $61,000 – $29,000 = $32,000
  2. 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%

  1. 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.

  1. Difference between Median and Highest Value:  320.0% – 194.0% = 126.0%
  2. 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

  1. Weighted Assessment per-Household indicator score
  2. Median Household Income indicator score

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

  1. Average Annual Change in Assessment (New Construction) indicator score
  2. Employment Rate indicator score
  3. Ratio of Working Age to Dependent Population indicator score
  4. 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

  1. Weighted Assessment per Household indicator score: -9.0%
  2. Median Household Income indicator score: -25.0%

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

  1. Average Annual Change in Assessment (New Construction) indicator score: -85.0%
  2. Employment Rate indicator score: 5.0%
  3. Ratio of Working Age to Dependent Population indicator score: 50.0%
  4. 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

Chart with average indicator score

APPENDIX E: 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 2016 enhancements to the Northern and Rural Fiscal Circumstances Grant.

Northern and Rural Fiscal Circumstances Grant
   
arrow pointing from relatively positive circumstances on the left to relatively challenging circumstances on the right
MFCI 0 1 2 3 4 5 6 7 8 9 10
2015 Per-household amount $0.0 $9.0 $18.0 $27.0 $36.0 $48.0 $60.0 $72.0 $85.0 $100.0 $120.0
2016 Per-household amount $0.0 $10.0 $20.0 $30.0 $40.0 $55.0 $70.0 $90.0 $110.0 $130.0 $160.0
Percentage Change - 11% 11% 11% 11% 15% 17% 25% 29% 30% 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 MCFI Funding Levels Based on RSCM
MFCI→
RSCM↓
MFCI
0
MFCI
1
MFCI
2
MFCI
3
MFCI
4
MFCI
5
MFCI
6
MFCI
7
MFCI
8
MFCI
9
MFCI
10
RCSM 25% $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
RCSM 35% $0.0 $2.0 $4.0 $6.0 $8.0 $11.0 $14.0 $18.0 $22.0 $26.0 $32.0
RCSM 50% $0.0 $5.0 $10.0 $15.0 $20.0 $27.5 $35.0 $45.0 $55.0 $65.0 $80.0
RCSM 65% $0.0 $8.0 $16.0 $24.0 $32.0 $44.0 $56.0 $72.0 $88.0 $104.0 $128.0
RCSM 75% $0.0 $10.0 $20.0 $30.0 $40.0 $55.0 $70.0 $90.0 $110.0 $130.0 $160.0

APPENDIX F: DATA SOURCES

Data Elements and Sources
Data Year Source(s)
Weighted Assessment 2015 Returned Roll and 2016 starting tax ratios Municipal Property Assessment Corporation (MPAC) and municipal tax rate bylaws
PIL Weighted Assessment 2014 or 2013 Municipal FIRs
Number of Households 2015 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) 2010–2015 Online Property Tax Analysis System (OPTA)
Municipal Land Area 2014 Statistics Canada
Farm Land Area 2014 MPAC and Ontario Parcel
Data Elements and Sources
Provincial Uploads
Data Year Source(s)
Social Assistance Benefit Programs 2016 estimates MCSS/MMAH
Court Security and Prisoner Transportation 2016 MCSCS/OPP

Note: For municipality specific details refer to customized 2016 workbooks developed by the Ministry of Finance.

APPENDIX G: DEFINITIONS

Average Annual Change in Assessment
(New Construction)

Measures the five-year (2010 – 2015) 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.

Farm Area Measure

Represents the percentage of a municipality’s land area comprised of farm land.

Farm Land Area

Equal to the acres of land for properties in the farm property tax class, as of December 31st, 2014. The acreage of properties in the farm property tax class is determined using the Ontario Parcel database.

Households

Municipal Property Assessment Corporation’s (MPAC) measure of households based on the 2015 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.

Municipal Land Area

Equal to the acres of land in a municipality and reflects municipal boundaries, as of December 31st, 2014. This measure is based on the Spatial Data Infrastructure (SDI) from Statistics Canada, and excludes bodies of water.

2016 OMPF Minimum Guarantee

The 2016 minimum guaranteed level of support based on 2015 OMPF allocations. In 2016, minimum funding guarantees for municipalities in southern Ontario will be increased to at least 85 per cent of their 2015 OMPF allocation. Northern municipalities will continue to receive at least 90 per cent of their 2015 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 northern and rural municipalities in the province, and ranges from 0 to 10. A lower 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 Community Measure (RSCM)

The Rural and Small Community Measure (RSCM) represents the proportion of a municipality’s population residing in rural areas and/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 2016. 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.