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Bulletin No. 23, January 2002
LOCAL SELF-GOVERNMENT BULLETIN – No. 23, January 2002

The purpose of this bulletin is to focus debate on the need to increase local self-government in Canada and to help local communities achieve more autonomy. The local self-government web site is http://www.localselfgovt.org
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In this issue:
1. Ontario Provincial/Municipal Agreement
2. Another interpretation of the new Housing program
3. Big city focus and shifting ground
4. Correction
5. Subscribe to the bulletin
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1. Ontario Provincial/Municipal Agreement

With the passage of a new Municipal Act in December (to come into effect in January 2003), the government of Ontario has moved to smooth rocky relations with municipalities by consenting to a Memorandum of Understanding about future co-operation.

The Memorandum was signed on behalf of municipalities by the Association of Municipalities of Ontario. The seven-page agreement has the usual high falutin language of goodwill (“public policy issues are complex and thus require coordinated responses …”) but only one section contains any meat – Section 3.2. It reads: “In the spirit of fairness, openness and good faith, any proposed change in legislation or regulations that, in the province’s opinion, will have a significant financial impact in the current financial municipal budget year or on the current municipal planning cycle, will be accompanied by prior consultation.” There is no talk of the need for consensus, and the limitations on the instances where consultation will occur are significant. The change must involve `significant financial impact’ (other kinds of impact are not included), `in the current budget year’ (not next year or in three years) and it is all subject to the `province’s opinion’ of what is significant. One suspects that virtually all of the financial downloading the Ontario government inflicted in the last five years could have occurred without the consultations required b y this section, since almost without exception the downloading impacts occurred more than a year after they were announced.

But there is another big limitation on when the province must consult. Section 5.1 states that “matters in the provincial budget, budget papers and budget bills are excluded.” This means that any downloading that is part of a provincial budget need not be preceded with consultation.

A copy of the agreement can be found at http://www.mah.gov.on.ca/english.asp and follow the links.

2. Another interpretation of the new Housing program.

The December 2001 issue of this bulletin reported on the framework signed between the provincial and federal governments for a new housing program, and noted that several provinces were on the point of signing specific agreements about their own financial contributions. The framework envisages the new housing program as one of shared costs – the federal government is making $685 million available over the next five years, and the provincial governments are required to match that amount. Some provinces have expressed reluctance (at best) to pony up real money, and the last bulletin suggested they may to scupper the opportunity for municipalities to secure badly needed affordable housing.

As the individual agreements become available it is possible to offer a different interpretation of the framework agreement - the federal government might have found a way of flowing money directly to municipalities for housing purposes by signing an artificial agreement with provinces, one that keeps the province out of the way.

That interpretation seems to be the explanation of the agreement signed with British Columbia. There, the federal government is willing to recognise rent-geared-to-income payments as a provincial contribution, as well as contributions by third parties (such as municipalities which waive municipal fees and property taxes, or sell land at reduced prices). This agreement proceeds on the basis that the province is not required to put in new money – instead, any kind of payment, even those already being made as matching funds, is acceptable so that the federal housing money can flow.

This seems like an innovative way to allow the federal government to commence a housing program within the tight confines of the Social Contract signed several years ago, although it is hard to see how it will be effective in addressing the substantial housing problems in Canadian municipalities. Trying to stretch only the federal money into an effective housing response will be very difficult.

Once again municipalities require two willing senior governments to act co-operatively to solve municipal problems. Achieving this kind of co-operation is all too rare in Canada.

The odd one out on this – or any - weak interpretation of the framework agreement is Quebec. Quebec agreed on December 21 to match federal money with new money and, instead of spreading the money out over five years, it will spend it within two years to create 6,500 new housing units. The Quebec government is also talking about using its own money to create new units above and beyond those called for in the provincial-federal agreement.

For information regarding the Quebec and British Columbia agreements go to: http://www.housingagain.web.net. Click the “Alerts” button and scroll down to late December. Detailed agreements have yet to be made with the other provinces.

3. Big city focus and shifting ground

Getting cities under the thumb of different provincial governments to agree on a common agenda is easy in principle, but difficult in tangible substance and strategy. Alberta shares energy revenues with its municipalities, but the other provinces don’t, for example; British Columbia has foresworn downloading, but other provinces haven’t; and the difference frameworks each city exists in, goes on and on.
But the C-5 group, representing the mayors of Vancouver, Calgary, Winnipeg, Toronto, and Montreal, has weathered a few meetings, and seems likely to continue to help create an urban agenda. At their recently concluded meeting in Vancouver, they agreed to develop a legislative framework of broad powers within the current constitution that cities could see enacted by their provincial legislatures, which would be a very useful step. They also talked about finding the magic elixir, namely some device to share growth revenue without any overall additional taxes.

None of this is easy, and it’s tempting to sometimes get discouraged. But what’s remarkable is how much the precarious financial position of cities has become part and parcel of the political discourse in Canada within a period of just two years. While the answers still seem elusive, it’s clear than another year of sustained pressure is bound to create some breakthrough providing more power, finances and autonomy for local governments in Canada.
4. Correction

In the last bulletin it was stated that the capital funds being committed by the federal government for Municipal Green initiatives and for the Infrastructure program were both conditional on a federal surplus at year-end. That statement was in error. The increased federal commitment to the Municipal Green funds of $125 million is not so constrained, but is committed money. That makes a total of $250 million available to municipalities, through the FCM, for the next year. I apologize for this error.
5. Subscribe to this bulletin
The bulletin is sent, at no cost, to about 1200 individuals involved directly or indirectly in local government in Canada. The next bulletin will be available in February. We invite you to subscribe by going to the ‘Bulletin’ tab of the web site http://www.localselfgovt.org and following the instructions. More information about the sponsors of the bulletin, a library of relevant and useful documents, and an archives of past bulletins, can be found on our web site. We appreciate your comments, your feedback (to j.sewell@on.aibn.com ), and items of interest that you wish to share with us and others who visit the web site.

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