Province sitting on surplus, while municipalities struggle to pay expenses

Municipalities in the province are struggling to raise enough money to cover their expenses while Ontario is sitting on significant surpluses, according to the executive director of the Association of Municipalities of Ontario.

“Municipalities each year at council need to set a tax rate that is sufficient to generate the revenue they need,” said Brian Rosborough. “So when the economy is good, the province and the federal government get to float on a lot of extra money and it doesn’t actually have any impact on municipal revenue.”

Rosborough pointed out in 2021, the Provincial Land Transfer Tax revenue, which is generated when someone buys and sells a house, was $5.8 billion for the provincial treasury. That was $2 billion more than planned.

He noted none of that money goes to the municipalities or to supporting house supply or growth. It just goes into the Provincial Treasury and doesn’t do anything to help municipalities meet their needs. Rosborough suggested they consider allocating some of the money to municipalities.

“Land Transfer Tax revenues, for example, or HST revenue,” he said. “That way when the economy is booming, there would be additional resources available to invest in the kind of infrastructure that municipalities need in order to support growth in a buoyant economy.

Rosborough said the revenue situation is quite different for the Province and the municipalities and there are several ways the Province could help the municipalities.

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