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Some certainty

Posted: September 30, 2016 at 8:44 am   /   by   /   comments (0)

It was a bad idea from the beginning. It was clear from the outset in 1997 and 1998, that rural Ontario municipalities lacked the means to manage and care for the thousands of miles of roads and bridges thrust upon them. Many were already struggling under the burden of the infrastructure they already had. Some viewed the move as a bald attempt to push provincial debt onto municipalities.

Complicating the issue, many municipalities also lacked the financial planning expertise or experience required to manage this new burden nor had the tools to plan for future replacement. Not that it would have done much good, since the tax base was already too small.

Prince Edward County, for example, had never kept track of the value of its infrastructure and the rate of decay. There was no method for calculating the timing and cost of its renewal and replacement. When a sewage plant reached the end of its life, Shire Hall simply turned to the federal and provincial governments for money—as it had always done.

Eventually, the province made it compulsory for municipalities to measure the value of their assets and begin making long-term plans for their replacement—like making children prepare budgets for their allowance.

Despite loud objections at the time, when Dalton McGuinty’s Liberals came to government in 2003, they refused to reverse the decision made by the previous PC government to download these assets onto municipalities.

The problem was clear in the numbers. In urban centres thousands of owners share the cost of the roads that run past their homes or businesses through their property taxes—in rural communities there are just too few to do so. It is grossly unfair and unreasonable to make the costs of roads and bridges the responsibility of property tax payers. The imbalance is absurd.

The upshot is that the province has been forced to remain a reluctant funder of roads, bridges and waterworks projects. But it does so in an uneven and unpredictable way.

Since amalgamation, Queen’s Park has concocted a parade of schemes to assist struggling municipalities pay for infrastructure upkeep—all the while hoping to wean municipalities off provincial dependency. None has been terribly satisfactory. While municipalities are happy to take the money, they complain that these mechanisms are confusing, warped by political favouritism and heavy on bureaucracy. Mostly, they complain about the random and unpredictable nature of provincial funding. This lack of funding certainty, they say, makes it difficult to prioritize and develop plans to tackle these growing infrastructure problems.

Last week,the Province attempted to answer this grievance. It announced firm funding through the Ontario Community Infrastructure Fund (OCIF) for each of the next three years. Since 2014, the municipality has received $324,448 each year from this fund—most of it directed to waterworks projects.

Next year Prince Edward County will receive $521,779 from this fund, followed by $740,273 in 2018 and nearly $1.2 million in 2019. While the money and timeline is welcome— it will disappear quickly into the County’s infrastructure hole and be gone in an instant.

According to a study conducted in 2014 by KPMG, a consultancy, the County has a list of immediate infrastructure needs totalling more than $200 million. The longer this work is put off, the greater the County roads, bridges and pipes decay, thereby pushing costs of its eventual replacement or repair even higher.

The OCIF total of $2.4 million over three years represents just one per cent of what the County needs right now—likely not enough to slow down the rate of decay.

The County’s spokesperson, Lisa McLennan, notes that the municipality is also eligible for “top-up funding”.

“This is a new component of the program which allows municipalities with critical infrastructure projects to submit proposals to bring their total OCIF funding up to $2 million over two years,” said McLennan. “The County is eligible for an additional $737,948 of funding for such projects.”

It is unseemly to criticize folks giving this community money, but neither can we forget the province put us in this mess. We need $200 million today. We are getting $2.4 over three years. It isn’t nearly enough. All we can do is patch the biggest holes and wait. But for what? Each day our roads get a bit more uneven. Potholes grow. Pumps fail. Pipes leak more than they convey.

Ontario’s debt is now $300 billion. That is the debt we can see. It doesn’t fully include massive pension liabilities lurking ahead. Nor does it include the massive infrastructure obligation that municipalities have deferred over and over again. That obligation will come due.

It is not at all clear how we will pay it.

 

rick@wellingtontimes.ca

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