The Challenges of Governing Rural Ontario

Art Sinclair, VP of Advocacy, Greater KW Chamber of Commerce

Art Sinclair, VP of Advocacy, Greater KW Chamber of Commerce

For over a century, the province of Ontario has generally maintained a strong balance across the economies of rural and urban regions.

Rural southwestern Ontario has prospered from stable manufacturing and agri-food sectors which are still considered the province’s two leading and dominant industries. However, global restructuring leveled a significant economic impact that is now affecting business, employment and municipal government.

In February of this year major media outlets across the province were reporting that residents of Howick Township, a rural area of Huron County between Harriston and Wingham, could be paying close to 30 percent more in property taxes. The municipality experienced an 11 percent tax increase in 2014 however their deficit for the current year is estimated at close to $460,000. Almost half of this shortfall is the result of provincial funding cuts and accompanying OPP service increases.

In Norwich Township, south of Woodstock, provincial funding was decreased by $280,000 which alone translated into a 4.58 percent tax increase. Township officials indicated in a news release that the province has systematically cut funding to their municipality over the last six years which cannot be absorbed within its budget structure.

The major provincial municipal support program is the Ontario Municipal Partnership Fund (OMPF). In August of last year, the Association of Municipalities of Ontario (AMO) asked the province to defer any further cuts to the OMPF and maintain the current level of $550 million. The 2014 Ontario Budget delivered by Finance Minister Charles Sousa accelerated cuts to the fund by $35 million – $10 million more than anticipated.

Furthermore, AMO recommended last August that the Ministry should complete a review of the overall fiscal impact of the 2014 budget and other impending decisions on rural municipalities. The major concern was the cumulative impact of initiatives such as OMPF cuts and changes to the OPP billing model.

In late March of this year, serious financial issues were reported at North Dumfries Township which according to media reports originated from ineffective internal accounting practices and controls and not provincial funding cuts. Overall, the rural areas of Waterloo Region have been adequately served by the current governance model where revenue generated from urban areas subsequently supports service delivery in rural areas. In other areas of southwestern Ontario, such as Huron County, there is no urban centre to provide this level of support.

On the private sector side of the equation, the 2015 Regional Economic Outlook compiled by the Credit Unions of Ontario and the Ontario Chamber of Commerce noted that across the province, economic trends in rural Ontario are considerably less positive than in larger and industry diversified urban centres. The 2014 report compiled by these two organizations provided a similar analysis which infers conditions are not improving and should be a concern to Queen’s Park.

The new prevailing attitude of rural Ontario may have been best described in a January 16, 2015 Windsor Star opinion column from Kevin Marriott, the mayor of Enniskillen Township in Lambton County. He asserts that OMPF cuts have resulted in the largest property tax increases in provincial history. Referencing the election night speech delivered by Premier Kathleen Wynne noting that in Ontario no one should be left behind, Marriott essentially asserts that rural Ontario is being ignored by Queen’s Park.

Former mayor Rob Deutschmann has indicated that there is no financial crisis in North Dumfries Township. The issues for the province of Ontario are more difficult and require far more complex solutions to relieve municipalities of elevating financial pressures. Time and resources cannot be wasted.

Article originally