The Public Information Campaign (PIC) Ad Hoc Committee met on May 24, 2007, at 1:26 p.m. in the Chairman's Boardroom, Regional Administrative Headquarters, 10 Peel Centre Dr., Brampton.

Chaired by Councillor C. Parrish

1. DECLARATIONS OF CONFLICTS OF INTEREST - Nil

2. APPROVAL OF AGENDA

RECOMMENDATION PIC-5-2007:

That the agenda for the May 24, 2007 Public Information Campaign Ad hoc Committee, be approved.

3. DELEGATIONS/PRESENTATIONS

a) Andrea Warren, Strategic Policy Project Manager, Executive Office and Ed Zamparo, Manager, Financial Policy and Strategic Analysis, Presenting Follow Up Information

Received

Andrea Warren, Strategic Policy Project Manager, outlined the approach used to present the information requested at the April 19, 2007 Public Information Campaign Ad hoc Committee meeting. She noted that staff have prepared factual information based on the four platform areas identified by the Committee for discussion.

Ed Zamparo, Manager, Financial Policy and Strategic Analysis, reviewed Platform 1 which provides information related to Human Services downloaded by the Province of Ontario compared to other provincial governments. Research conducted by staff indicated that:

• Compared to the rest of Canada, the Province of Ontario spends less, per person, on human services;
• Ontario is the only province where municipalities must fund a portion of social services;
• Over $3 billion of Ontario provincial human services responsibilities are funded by municipalities from property taxes;
• Municipalities in Ontario pay $282 per person more than the rest of Canada to support human services;
• Ontario property taxes are the highest in Canada, $235 per person or 29 per cent higher than the rest of the country;
• In Peel, 44 cents out of every Regional property tax dollar is used to fund human services.

It can be surmised by the research findings that in Ontario, provincial downloading moved service delivery responsibility to municipalities which is the most effective level of service delivery and management, however, municipalities have not been given fair and adequate funding from the Province to pay for human services. Consequently, the Regional property tax has come under pressure to play a greater funding role.

Many in the municipal finance community have argued that property tax is an inappropriate revenue source to fund human services in that it is inherently unfair and its revenue growth does not reflect the pace of economic growth.

David Szwarc, Chief Administrative Officer, noted that the downloading of services to the municipal level began with the Local Services Realignment (LSR) provincial initiative in the mid 1990's. The initiative shifted some services to the local level and removed the education component of the property tax to result in a revenue neutral realignment. However, revenue neutrality has not been the case as more and more services have been downloaded.

Chair Parrish requested that the CAO provide her with all previous reports to Regional Council which illustrate the growth in social services costs versus the savings that were realized by removing the education component from the property tax bill.

In response to a question posed by Councillor Mullin, Ed Zamparo advised that, historically, Ontario has always been different from other provinces with respect to provincial funding, and that the issue existed prior to the Local Services Realignment.

Regional Chair Kolb stated that, in his opinion, the current system of funding human services is not accountable to anybody; is not sustainable and could eventually lead to the Region losing its debt-free status.

Councillor Carlson expressed the need for partners in government, working together to deliver sustainable funding for human services.

Chair Parrish stressed the importance of clearly explaining, in a positive manner, the burden that the shifting of human services to the property tax base places on Peel's taxpayers.

Andrea Warren presented Platform 2, which illustrates that the current provincial funding formula for human services does not effectively address the needs of high growth municipalities, such as Peel.

Examples of growth-related provincial funding inequities in Peel include:

• All Public Health Units receive the same level of annual funding increase from the provincial government. Peel, being a high growth area, with residents that have changing and complex human service needs, is placed at an acute funding disadvantage. The Region of Peel has targeted $5.1million in capital funding for three new public health clinics to increase access to service, but has no provincial funding to operate them.
• The current allocation of provincial funding for Peel Public Health does not reflect health needs in the community. Service levels remain among the lowest in Ontario due, in large part, to rapid population growth of approximately 30,000 new residents per year. Provincial funding for Peel Public Health services is $7 below the per capita average provincially (2006).
• The provincial funding gap for child care in the GTA/905 in 2005/06, as identified by the Strong Communities Coalition, was $352 per child under 9 years of age. In Peel the funding gap in 2005/06 was $376 per child (0-9), for a total of $61.5 million below what would be allocated to Peel if the provincial average was applied.
• The current provincial government has considerably increased the requirements for planning policy development and review of development applications, through the Oak Ridges Moraine Plan, the Greenbelt Plan, the Provincial Policy Statement, the Places to Grow Growth Plan and the recent changes to the Planning Act. The cost of implementing these provincial plans is borne in large part by municipalities.

Janette Smith, Acting Commissioner of Health noted that funding for public health had in the past been provided by the Province by way of grants. Regional Council would determine the required service levels and the Province would transfer their share of the funding to the Region. Currently, the Province sets out the maximum increase in funding that will be provided at 5 per cent, which reduces service levels in areas such as Peel that are experiencing growth. It is expected that this approach will continue to be used by the Province for another three years.

Chair Parrish emphasized the need to educate Peel area MPPs on the impacts to growth municipalities as a result of provincial under funding, so that they can discuss the issues with their caucus.

Councillor Groves indicated Peel area MPPs may not be aware of the inequity in funding for the Local Health Integration Network (LHIN) that includes the Peel area. The LHIN covers 5.8 per cent of Ontario's population but receives only 3.1 per cent of the total provincial funding.

Councillor Carlson suggested that the Premier of Ontario, the Ontario Minister of Finance and Peel area MPPs be invited to discuss issues related to the funding of human services in an effort to initiate dialogue toward resolution.

Andrea Warren outlined Platform 3 which provides a snapshot of who suffers the most as a result of provincial under-funding of human services.

All Peel residents and businesses are impacted by the following:

• All taxpayers have to make-up the funding shortfall or have service levels reduced.
• Other municipal priorities, such as infrastructure, policing and transportation are not being fully serviced to cover the gaps in provincial funding for social and health programs.
• The current Public Health provincial funding formula does not account for growth-related issues, consequently in Peel, service levels are reduced and have resulted in:
  • 1,100 personal service settings (tattoo parlours, body piercing establishments, etc.) being inspected on a complaints only basis.
  • 200 new food premises are added annually and resources are lacking to provide the required food premise inspections.
  • Difficulty managing the sexually transmitted disease caseload, which is increasing by over 220 per year.

Low income families are affected by property taxes which generally consume a larger share of the family's earnings, thereby hurting those who can afford to pay the least.

Children are impacted by the following:

• Children receive fewer services such as dental screening and treatment and immunization, which costs government more later on to address unattended problems.
• Only 47 per cent of schools are screened in the dental program, with 79 per cent rated as high-risk.
• There are 430 fewer subsidized child care spaces (2006-2008) and the waiting list will rise from the current level of 2500 to 4,000 by 2010. The wait time for fee subsidy has increased from 6 months to 18 months.
• 200 families are presently waiting for support through Peel's Healthy Babies Healthy Children program. Below is a profile of the waiting families:
  • 35 per cent have/had a history of suffering from mental health issues;
  • 31 per cent lack social supports and are isolated from the community;
  • 25 per cent report family violence (physical, sexual, emotional, financial);
  • 17 per cent are teen mothers;
  • 23 per cent have less than high school education;
  • 37 per cent report financial concerns and struggle to provide the necessities of life; and
  • 14 per cent experience a language barrier.

Seniors are impacted by the provincial under-funding of human services in the following ways:

• The average wait time for new senior applicants for social housing is 3-7 years.
• The current provincial government committed to increasing funding to $6,000 per long-term care resident or $4.2 million. By 2006, Peel Region has received an increase of $2,887 per resident per year, or 48 per cent of the promised increase.

People in need of affordable housing are impacted as follows:

• Peel only has 37.6 social housing units per 1,000 households (compared to the OMBI* median of 48.9 units per 1,000 households).
• Only 6.7 per cent of Peel's social housing waiting list, which is currently 12,400 households, is placed annually (compared to the OMBI median of 22.6 per cent).
• The average wait time for new applicants for subsidized housing (non-senior) is up to 21 years and for current applicants it is 10-15 years.
• To keep up with the 2005 service level of 43.4 affordable housing units per 1,000 households the Region needs to build 356 units annually - given a constant annual growth rate of 8,200 households.
• In 2007, the Housing Development Program ten year capital plan provides for an average construction rate of 138 units per year. This leaves a gap of 218 units per year from the 2005 service level, which does not satisfy the overall needs of the community and just keeps up with the 2005 service level.
  
  

Dan Labrecque, Treasurer and Commissioner of Finance, noted that earlier in the day, General Committee approved a recommendation endorsing the Children's Charter of Rights; one of which is "the right to basic needs" including clean water, good food, proper clothing, a home and happiness. The burden placed on property taxpayers affects the ability of parents to provide housing for their families.

Janet Menard, Acting Commissioner of Social Services, requested that Platform 3 be amended to include information on the impact the under funding of human services has on newcomers to Peel.

Kent Gillespie, Commissioner of Corporate Services and Regional Solicitor, suggested that since being a funding partner enables the service levels to be determined at the local level, the Region should be prepared to discuss what the Regional share of the human services costs should be.

Regional Chair Kolb stated that participating in the funding of the services assists in maintaining accountability for the programs that are delivered and he suggested that this topic be discussed at the next meeting of the Regional Chairs group.

David Szwarc inquired if the desire of the Committee is to fight for appropriate funding under the existing formulas, or if a fundamental change to the way municipalities receive funding is preferred.

Chair Parrish suggested that both options should be discussed with the Province as Peel Region should be partners for change.

Ed Zamparo reviewed Platform 4 which illustrates the unfairness of the current property taxation between multiple income households and single or fixed income households.

Issues of unfairness were identified as follows:

• At the heart of an effective and fair taxation system is a rational division of responsibilities between the levels of government. The cost of social services, for example, represents income redistribution and would be better funded from income taxes, not property taxes. Finance experts have been very clear and consistent on this point.
• Fairness to all Ontarians will be achieved by using existing income taxes to fund social services, as is done elsewhere in Canada. In doing so, no one municipality's property tax base will be disadvantaged as a result of experiencing high social service needs in its community.
• The provincial government recently announced the phasing-out of the Toronto Tax (also known as GTA Pooling), which requires 905 municipalities to help pay for Toronto's social services and housing costs. The phase-out is a step in the right direction as this arrangement was clearly unfair and demonstrates the inappropriateness of funding human services such as social services and housing from property taxes.
• Downloading has contributed to Ontario municipalities having the highest property taxes. This has resulted from human services responsibilities being funded from property taxes and is compounded further each year by provincial funding not keeping pace for these services in high growth areas like Peel and the GTA. Property taxes are currently utilized to close this funding gap in human services. For example, Peel taxpayers pay above the 25 per cent municipal share for public health services to offset the provincial funding shortfall.
• However, the property tax is a regressive tax which results in low-income earners paying more taxes relative to their income than higher-income individuals and as such has been criticized as being unfair. Also the property tax is not a very elastic revenue source as it does not grow, without increasing tax rates, as quickly as the economy unlike other taxes (e.g. income and sales taxes).
• Continuing to utilize property taxes to fund human services and to offset any provincial funding limitations diverts municipal funds from investment in local economic infrastructure which is vital for our economies to grow and remain vibrant. Without such investment, Ontario municipalities will be placed at a competitive disadvantage and will find it more difficult to attract business and new residents.
• For these reasons the current situation between two households (e.g. seniors versus multiple income earners) is unfair, and more reliance on the property tax base will only exacerbate the unfairness.
  

Chair Parrish advised that she would work with her staff to prepare a draft brochure based on the information presented in the four platforms. Chair Parrish undertook to then provide the draft brochure to Marilyn Hood, Director, Communications Services for her assistance in ensuring the brochure is presented in a comprehensive, easy to read format. The brochure could serve as a discussion document with the Provincial government and if they are not amenable to discussing the issue of funding, they would be advised that the brochure would be distributed to all households in the Region of Peel in September, 2007.

Councillor Groves suggested that any discussion on change to current funding formulas should include representatives of the Federal government.

4. REPORTS - Nil


5. COMMUNICATIONS - Nil


6. OTHER BUSINESS - Nil

Additional Item - 6a:

a) Update on Pooling (Oral)

Received

Chair Parrish inquired if any updated information was available regarding the pooling funds being held back by the Region. Regional Chair Kolb responded that an answer is not anticipated until after the election in October, 2007.

7. SCHEDULE OF FUTURE MEETINGS

RECOMMENDATION PIC-6-2007:

That the next meeting of the Public Information Campaign Ad Hoc Committee be held on July 5, 2007 immediately following Regional Council.

8. ADJOURNMENT

The meeting adjourned at 2:46 p.m.