Earlier this week, Minister of Finance, Peter Bethlenfalvy, delivered the Fall Economic Statement (FES), Building Ontario for You. The latest iteration of the Province’s financial update and plans focus on building critical infrastructure, reducing gridlock and affordability. While the Government recognized the need to work with and provide funding to municipalities as critical partners in achieving its infrastructure and service delivery goals, there were relatively few new municipal-specific items.
Items of note for AMCTO members include:
- Proposed extension to the gas tax cut until June 30, 2025. This means the rate of tax on gasoline and fuel (diesel) remain at 9 cents per litre which will impact the funding municipalities receive for infrastructure through Ontario’s Gas Tax Program.
- Extending tax relief measures for municipal electricity utilities until December 31, 2028, with the transfer tax relief rate set to 0% from January 1, 2025 to December 31, 2028. These measures are intended to support consolidation of utilities, greater capital investment in infrastructure, and improved service delivery.
- Increasing the Ontario Municipal Partnership Fund by $100 million over the next two years starting with $50 million in 2025, up from the current $500 million. Starting in Winter 2025, the Province plans to engage respective small, rural and Northern municipalities to discuss their priorities and a new reporting framework. AMCTO has advocated that the fund keep pace with inflationary and other consequential costs to municipalities. Additionally, we have long recommended the Province consult with municipalities when considering new reporting requirements. We look forward to learning more about the proposed framework and opportunities to raise solutions and considerations that ensure the value of reporting and reduce potential administrative burdens.
The Province reiterated progress and previous announcements including proposed requirements for municipalities to seek provincial approval before installing bike lanes, competitive energy procurement in municipalities that provide support resolutions, and the application-based annual Ontario Transit Investment Fund which is set to open in 2025.
On a high level, the Government projects a deficit of $6.6 billion in 2024–25, a deficit of $1.5 billion in 2025–26, followed by a surplus of $0.9 billion in 2026–27. As the Province continues to review the financial future of Ontario, we will continue to monitor impacts to our members and bring forward your needs as part of the conversation through the Province’s upcoming annual pre-budget consultations this winter.