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Windsor-Essex Regional Chamber of Commerce and Ontario Chamber of Commerce Report: Province & Municipalities Must Improve Local Resilience to Budget Pressures

While COVID-19 has created a uniquely difficult situation for Ontario’s municipalities, it has also exposed areas to improve municipal fiscal governance. Local governments do not have the fiscal autonomy they need to make them competitive and maintaining the status quo could be devastating for communities in a post-COVID economic recovery. The impact of the virus and the resultant public health measures have meant that most municipalities are seeing a decline in revenue and increase in expenditures.

Today, as all levels of government look to balance debt and deficits while protecting the well-being of our communities, the Windsor-Essex Regional Chamber of Commerce and the Ontario Chamber of Commerce (OCC) released its latest report, Better Budgets: Bolstering the Fiscal Resilience of Ontario’s Municipalities. This policy brief identifies 14 recommendations for both the Province and municipalities which can bring immediate and long-term relief to communities across Ontario.

“Municipalities in Ontario, such as Windsor and Essex County are facing a triple threat this year: an ongoing pandemic that has been devastating to local economies, reduced revenue from closed or limited services, and increased spending on public health and human services. The Financial Accountability Office estimates the pandemic will collectively cost municipalities $2.7 billion in 2021, on top of the expected $4.1 billion impact of 2020,[i]” said Rakesh Naidu, President & CEO of the Windsor-Essex Chamber of Commerce. “In Budget 2021, the Government of Ontario committed to a long‐term economic growth plan. It is imperative public policymakers do everything they can do to ensure communities like Windsor-Essex do not get left behind in recovery.”

“Ontario’s post-pandemic recovery and long-term success will depend heavily on unleashing the economic potential of our municipalities,” said Claudia Dessanti, Senior Manager, Policy of the OCC. “Given that local governments in Ontario cannot run budget deficits, their current options for fiscal sustainability are limited to tax increases, service cuts, and the use of reserves. Now is the time for municipalities and the Province to explore alternative means of achieving fiscal sustainability.”

Key recommendations outlined in the report put out by the Windsor-Essex Regional Chamber of Commerce andOntario Chamber of Commerce include:

  • Undertake a comprehensive and forward-looking review of Ontario’s property tax system to ensure the system is more equitable, efficient, and predictable for businesses.
  • Adhere to the ‘pay-for-say principle’ to ensure that all responsibilities are accompanied by adequate funding.
  • Enhance and incentivize regional collaboration across municipalities.  

Enormous thanks to our partner KPMG Canada and the report’s authors for their collaboration on this important report. Read the report.

[i] FAO, 2020.