October 1, Mr. Gary McNamara President Association of Municipalities of Ontario University Avenue Toronto, Ontario M5H 3C6

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1 October 1, 2011 Mr. Gary McNamara President Association of Municipalities of Ontario University Avenue Toronto, Ontario M5H 3C6 Dear Mr. McNamara: Thank you very much for your letter on behalf of the Association of Municipalities of Ontario (AMO). I am pleased to provide you with the attached response, which outlines the Ontario Liberal Party s position on these issues of key importance. Ontario Liberals are the only party with a positive plan to move Ontario forward. Together, we got through the recession the Ontario way: we protected education and health care, stood by workers in the hardest hit industries, and worked together to find new opportunities for our province and our families. Our strong leadership, experienced team and thoughtful long-term plan are getting results for Ontario families. Eight years ago, during the dark days of Conservative cuts and conflict, Ontario was moving backwards. Today, our schools are rated among the world s best, our health care ranks first in Canada, and old jobs are coming back while new jobs are being created in emerging industries like advanced manufacturing and clean energy. Our plan is working and Ontario is solidly on track. The Hudak PCs would take us off track and put our fragile recovery at risk with their reckless schemes. We need to keep moving forward, together. 2/ Ontario Liberal Party, 10 St. Mary St., Suite 210, Toronto, ON M4Y 1P9 Phone: (416) , Fax: (416) info@ontarioliberal.com Web:

2 -2- Mr. McNamara, thank you again for the opportunity to address these important issues and please accept my best wishes. Yours truly, Dalton McGuinty Leader of the Ontario Liberal Party Premier Enclosure

3 Response to Association of Municipalities of Ontario 1. One element of the upload agreement is the annual reconciliation of municipal costs against the fiscal year s estimated expenditures. Would you confirm that this reconciliation feature of the agreement would likewise continue to be honoured for 2010 and beyond? Municipal governments need the ability through the reconciliation to access provincial funding for actual policing and social services costs, rather than relying solely on the previously estimated costs. Ontario Liberals have honoured reconciliation every year since we took office in 2003, and we can confirm that reconciliation will be honoured for It occurs near the end of the year when final information from municipalities is available. 2. We would like to clarify with you that municipal employers wholeheartedly agree with your statement that the arbitration table should be absolutely balanced and should not tip in favour to either party. Several arbitrators in previous reports also opinioned that labour s me too approach is not always reflective of local needs or circumstances. If elected, we would like to work with you, and your government, to do a recalibration to put a clearer onus on arbitrators to demonstrate the affordability analysis and for the related decision making to be transparent. We would also like the opportunity to explore your comments on making the negotiations more earnest at the front end, prior to entering into arbitration. We would welcome the chance to work together to create a negotiation environment at the front end that serves all parties fairly. Settlements reached at the bargaining table provide the best outcome for labour relations. Currently, only about 20 per cent of negotiations fail to reach a settlement and must rely on arbitration. Our goal should be to lower that number by encouraging more agreements to be reached at the bargaining table. We would welcome your suggestions on how to encourage more negotiated settlements while maintaining a balanced and fair labour relations system. 3. On the matter of establishing a permanent and predictable roads and bridges fund, you did not make a commitment to an amount or how a fund would be structured and it is not readily evident in the platform s fiscal plan. Several questions arise: 2/

4 -2- a) What details can be shared at this time in terms of scale and scope of the funding? Ontario Liberals recognize the importance of supporting municipalities in maintaining their municipal road and bridge infrastructure, which is critical to the safety and economic vitality of our communities. That is why since 2003 we have invested $14 billion to keep Ontario s roads in good repair, reduce congestion, improve safety and promote our economy. Ontario Liberals are moving forward together with municipalities to undo the damage done to municipalities by the Harris-Hudak PC government. When the PCs downloaded infrastructure onto our cities and towns, they knew that municipalities could not possibly afford the costs of rehabilitating bridges. We have taken action to fix that reckless record. That is why we are finalizing the Roads and Bridges Review to examine responsibilities and funding programs for roads and bridges. That is also why we are partnering with municipalities on the Municipal Dataworks Program to help them collect valuable information to track their infrastructure. Ontario Liberals agree that there needs to be more predictability and accountability in our relationship with municipalities and we are going to create a predictable and permanent fund specifically for municipal roads and bridges. We look forward to continuing our discussion with the Association of Municipalities of Ontario (AMO) and finalizing the details of the Roads and Bridges Review. b) As you know, for rural and northern municipalities, the typical grant application process tends to serve a provincial management approval process. AMO s experience with the federal gas tax formula approach which sets out for each municipality a multi-year fund better leverages local investment and we believe it can also leverage asset management planning. Would a multi-year formula based allocation methodology be embraced? We are committed to addressing the downloading done by the Harris-Hudak PCs by listening to municipalities about the best way to implement a new predictable and permanent fund specifically for municipal roads and bridges. As we move forward together, Ontario Liberals will work with municipalities to ensure that the program is structured in an effective, reasonable and fiscally responsible way. 3/

5 -3- c) As well, you made the statement at the conference that you would like to invite the federal government into this endeavor. Would you make the creation of a new road and bridges fund conditional to involvement of the federal government or would you invite them with the understanding that the provincial and municipal governments could work productively on this initiative with or without their participation? In our recently released plan, Building Together, Ontario Liberals commit to working with the federal government and the municipal sector to develop a new municipal infrastructure investment strategy. We will continue to provide municipalities with ongoing stable funding for transit infrastructure through our dedicated gas tax and we committed at the AMO conference in August to create a separate long-term fund for municipal roads and bridges. We invite the federal government to participate in this fund also. 4. In terms of the property tax increase deferral for seniors, how quickly would legislation be introduced and take effect? Clearly there will be operational matters that municipalities and seniors will need to know and for which care in development and implementation is foremost. For municipalities, they will need to be assured that their yearly budgets are not compromised by process. The Ontario Liberal Plan commits to working with Ontario s municipalities to develop a property tax deferral program for seniors that would allow seniors to defer any increase in property taxes for as long as they choose to stay in their home. Our plan also commits to covering any lost revenue to municipalities as a result of this change. If re-elected, Ontario Liberals will immediately engage AMO and municipal governments to develop the implementation details of this commitment. Our intention would be to have this program in place as soon as possible, while also recognizing that the province and municipalities need time to get the program developed, and the appropriate administration in place. Ultimately, we believe that Ontario s municipalities share in our desire to keep seniors healthy and at home as long as possible. This commitment helps keep costs down for seniors, while preserving the revenues that Ontario s municipalities rely on to provide important services. We look forward to working closely with AMO on the details of this initiative. 4/

6 -4-5. What are the funding envelopes for the proposed permanent Northern Ontario Heritage fund and Eastern Ontario Development fund permanent and the proposed new Southwestern Ontario Economic Development Fund? Ontario Liberals recognize the value and unique nature of the regional economies across Ontario. Through the Northern Ontario Heritage Fund and Eastern Ontario Development Fund (EODF), we have helped create and retain over 27,000 jobs in those parts of the province. For southern Ontario, we will make the EODF permanent and create a new Southwestern Ontario Economic Development Fund to help those communities attract the jobs of tomorrow. The EODF and Southwestern Ontario Economic Development Fund will each provide their regions with $80 million over four years ($20 million per year). Our plan to create jobs and growth is about creating the best, most highly educated workforce so that companies will want to come to Ontario. Ontario Liberals, through the Northern Ontario Heritage Fund Corporation, invest in projects across Northern Ontario that stimulate growth, attract investment and create jobs. We will increase the Northern Ontario Heritage Fund Corporation s annual allocation to $110 million to further grow the North s economy. Ontario Liberals are the first to provide this unprecedented level of funding to Northerners. In addition we will make the fund permanent, and increase the number of jobs created through the fund to 4,000 per year. To date, through the Northern Ontario Heritage Fund Corporation, Ontario Liberals have approved over $723 million for 4,384 projects, leveraging over $2.4 billion which is helping to create or sustain more than 17,800 jobs and co-op placements across the North. 6. Unlike the rest of Canada, social housing is a municipal responsibility in Ontario and Ontario municipalities contribute more than $1.2 billion annually to social housing. As the currently valued $40 billion worth of social housing stock ages, municipalities face increased costs to maintain this housing. What would be the anticipated scope and scale of the proposed new housing benefit in light of the fiscal plan? Ontario Liberals are working hard on behalf of low-income Ontarians and will continue to make poverty reduction a priority going forward. In 2008, we released the province s first-ever Poverty Reduction Strategy, with a target of reducing poverty by 25 per cent by To enshrine this commitment into law, we passed the Poverty Reduction Act, 2009 to ensure that successive governments remain focused on the fight against poverty. 5/

7 -5- As part of the strategy, Ontario Liberals are delivering programs and services that are making a real difference in the lives of low-income Ontario families. The Ontario Child Benefit is providing up to $1,100 a year to over one million children and helping families to move from social assistance to employment more easily. This will increase to $1,310 in Full-day kindergarten is saving families thousands of dollars per year on child care costs. We have increased the minimum wage to $10.25, increased social assistance rates seven times and launched the largest review of social assistance in 20 years. Because of these investments, we are seeing results. Despite the worst global economic downturn in recent memory, child poverty levels decreased in Ontario from 2008 to 2009 meaning that 19,000 fewer Ontario children were living in poverty. Ontario Liberals will continue to make poverty reduction a priority and are committed to building on our success. We have heard from many advocacy groups and respected partners, and many feel that the next major investment we need to make to combat poverty in Ontario is to create an Ontario Housing Benefit. We are listening and, if re-elected, we will consider delivering a new housing benefit for Ontarians who are struggling. The commissioners at the Social Assistance Review the largest in 20 years are looking at this idea within the context of the larger income security system, and we will ask them to develop options on how to approach helping social assistance clients and low-income Ontarians with the cost of housing.