Provincial-Municipal Financial Support in a Post-Pandemic World
Exploring the nature of provincial-municipal relations in Canada is a never-ending effort, as evidenced by my apparent obsession with the topic in this blog series. However, its importance in Canada’s federation cannot be understated. This week, we discussed the provincial side of this relationship in Ontario — which was a stark reminder to this municipal aficionado of the important role the province plays.
Speaking with various members of the Ontario Public Service reminded me that, despite the oft-reported frictions in their relationship, provinces do provide foundational support for municipalities. From aiding municipal infrastructure projects with capacity and funding, to providing disaster recovery programming and financial assistance, to supporting the modernization and digitization of municipal governments across the province, many people may not realize just how much the province does for municipalities. Specifically, it was eye-opening for me to hear about the Ministry of Municipal Affairs and Housing’s efforts to have other Ministries operate with a municipal lens — ensuring they engage in discussion with municipal stakeholders and try to address municipal concerns in their policy making processes.
Despite this, I still believe the province needs to play a larger role in supporting municipalities, specifically in the financial realm. Historically, the Province of Ontario has been notorious for giving municipalities unfunded mandates, where they are told to provide a service without being given a transfer or revenue tool to fund that service. This is a persistent issue that must be addressed, especially as municipalities continue to grow, forcing them to provide mandated services to a rising population with the same, insufficient financing options.
Interestingly, I think COVID-19 may have provided the breakthrough needed to help the Province of Ontario become more comfortable with expanding the fiscal support they extend to municipalities. Through the Safe Restart Program, Ontario has been working with the federal government to provide unprecedented levels of financial support to municipalities in order to supplement the revenues they have lost due to the prolonged economic shutdowns caused by the pandemic. I recently attended a budget consultation meeting with the City of Toronto (you can explore the full budget presentation here, and I highly recommend you do!) where I learned that Toronto alone received nearly $1.2B in budget support from this program. Further, the City has secured $740M of support for their 2021 budget and expects to receive an additional $856M from expanded federal-provincial programs in order to balance their budget.
While this level of provincial support for municipalities certainly will not last beyond the end of the COVID-19 pandemic, I do hope it has helped to shift the paradigm on provincial-municipal transfers. Currently, provincial transfers are propping up municipal budgets, but this may spark the innovation and intergovernmental collaboration needed to force the province to re-evaluate the financial support and revenue tools they provide municipalities with in non-pandemic times. The importance of effective, financially empowered municipal governments has only been further highlighted by the pandemic, as it is municipal governments who deliver many of the key health, housing, and economic services the province deems necessary. I am eager to see how this provincial-municipal fiscal relationship in Ontario will continue to evolve in the post-pandemic world, and I am hopeful that the province will expand their fiscal support for municipalities — in order to better facilitate the important delivery of provincial and municipal programs at the urban level.
