Financial 'fair share' — Ottawa and other cities deserve a better provincial funding model
Mayor Mark Sutcliffe worked out a 'new deal' for Ottawa with the province back in March. Heralded as a 'big win' at the time, it now looks more like a baby step.
Joanne Chianello • Ottawa Citizen
Published Aug 29, 2024 • Last updated 2 hours ago • 4 minute read
For the last three weeks, we have been hearing about how the City of Ottawa is on the precipice of a dire financial crisis. Get ready for plenty more of the same.
As council gears up for its fall session, at the top of its to-do list will be putting parameters around how staff draft the 2025 budget. But before they do that, council is expected to be briefed on a wide number of complex fiscal issues: from the long-term financial outlook for transit, to the city’s contention that the federal government is shortchanging us regarding payment-in-lieu-of-taxes for their buildings. All this may happen as early as next Wednesday’s council meeting.
These updates will undoubtedly show that we are in trouble. And expect many calls for the province and feds to step up and “pay their fair share.”
As indeed they should. For years, municipally minded organizations, leaders and advocates have been arguing for an updated blueprint that spells out which level of government does what — and who pays for what.
Consider how, for the last quarter-century, Ontario is the only Canadian jurisdiction where local government is responsible for managing social services. Our cities are also on tap to deliver and co-fund a host of health services, despite “health” being a definitive — constitutional, in fact — provincial responsibility.
And while the province does provide funding for these services, it’s never enough. In Ottawa’s 2024 budget, for example, this city’s property taxpayers will be paying for local childcare costs to the tune of more than $19 million. That’s after accounting for all provincial transfers, user fees and other revenue.
To deliver long-term care, the property tax roll is providing $30 million. And for housing, more than $130 million.
These are only a few of the services that are essential in helping make a city a bit more inclusive, compassionate and livable for all. But they are being funded by a property tax system created two centuries ago to pay for roads and pipes (and schools, on behalf of the province).
And so, mayors fight for more funding, with varying degrees of success. Mayor Mark Sutcliffe worked out a “new deal” for Ottawa with the province back in March. Heralded as a “big win” at the time, it now looks more like a baby step.
Which seems to be the way of these one-off deals. No one faults any mayor for accepting whatever funds may come their way, or for fighting for more for their own city. Should the province pay for more of Ottawa’s LRT, the way it has for Toronto, Mississauga and Hamilton? Of course! But asking for our “fair share” from issue to issue, project to project, crisis to crisis, is not a sustainable way to finance a modern city.
As the nation’s capital, and the province’s second-largest city, Ottawa should be leading the charge in advocating for a new fiscal deal for all of Canada’s cities. (To that end, it might have been a better look for the mayor not to have held his city-in-financial-freefall news conference on the same day his colleagues from the Ontario Big City Mayors group made their public plea to the province for a more strategic approach to the homelessness crisis.)
At the same time as they make the case for a modernized funding model, municipalities need to show that they are doing their part to run their own shops responsibly. For Ottawa, that might mean updating our seven-year-old long-term financial plan for capital projects, especially as staff recently revealed that we are $3 billion short for what we are planning to build in the next decade. Or better managing the light-rail file, with far more transparency. Or even coming up with a responsible succession plan for senior staff: in the middle of a housing crisis, we are now two years without a permanent head city planner.
Sutcliffe didn’t create Ottawa’s fiscal crisis, but he and his council colleagues didn’t help. Nor did many previous councils. For years, politicians approved budget increases that were more about meeting campaign promises than matching the real needs of this city.
That’s about to change. Grappling seriously with urgent challenges — fiscal, societal, structural — can no longer be kicked down the road. But Ottawa shouldn’t be facing these problems alone. It’s time to forge a real partnership among cities that are fed up with the status quo that’s long been inadequate and has now become indefensible.
Joanne Chianello, a senior adviser with StrategyCorp, is an award-winning former journalist who covered Ottawa City Hall from 2010 to 2023 for the Ottawa Citizen and CBC Ottawa.
https://ottawacitizen.com/opinion/chiane...eserve-a-better-provincial-funding-model