The history of government in Ontario has been an ongoing back and forth between municipalities and the province about who takes responsibility for which services. You’ve probably heard municipalities groan about “downloading”, when the provincial government passes responsibility down to municipalities – sometimes with the funding to match, sometimes not. You’ve probably also heard about “jurisdictional football”, where each level of government passes the buck to the other. Jurisdictional matters are about as boring and contentious as politics can get, but the question of who pays for what often determines whether something can happen quickly or efficiently, or sometimes, whether it can happen at all.
Creatures of the Province
Municipalities are only mentioned once in the Canadian constitution, and only as something that falls under the jurisdiction of the provinces. Even though municipalities in Ontario existed before the province, and Canada itself, the constitution gives provinces the power to regulate municipal affairs. Originally, municipalities only had powers that the province explicitly gave them by statute: the province would write a law that gave the right to a municipality to do a particular thing, and if such a law didn’t exist, a municipality couldn’t do it. Now, thankfully, municipalities are recognized as having “natural person powers” – which is to say, municipalities can make decisions about anything unless the province explicitly says that they can’t. This flipping of the approach to municipal rights means that municipalities can be a lot more self-directed. At least in theory.
In practice, it’s a little different. While a municipality can in theory decide their own affairs unless the province determines otherwise, the province spends a lot of time and energy anticipating the things that municipalities might choose to do and writing laws that limit or restrict those actions. They remain responsible for the policy framework within which municipalities get to make decisions: a municipality can write their own Official Plan, determining which types of development can occur where within their boundaries, but the province writes the Planning Act which determines what decisions municipalities can make within their Official Plan. As a recent example, Bill 23 made significant changes to the Planning Act which effectively wrote a zoning amendment for every municipality in Ontario.
The province also controls a LOT of municipal funding. Municipalities are limited (by provincial laws) in how they can tax their residents. There was a time when municipalities charged income tax AND corporate taxes; now they’re limited to property taxes and service fees, and any funding they need on top of that comes in the form of provincial grants. If a municipality wants to do something that goes beyond the province’s goals, they need to find the money for it somewhere else.
When the province decides that a particular service is better implemented or administered at the municipal level (i.e., when they “download” responsibility), there’s no guarantee that there will be funding to match. The costs of a big central authority administering a program or regulation is not the same as a smaller, more local authority doing the same: sometimes it’s more efficient for a municipality to do something for itself, but in other cases it could cost significantly more, just spreading those costs out over the 444 municipalities.
When the province downloads responsibility, it’s often because doing so can deliver the services more efficiently – i.e., to save money. But it isn’t always clear how those changes will roll out, and there can be many unintended consequences, not the least of which is that municipalities can end up responsible for a service they can’t actually afford. Often the province will make a change without even consulting municipalities, which leads to a lot of pushback and hard feelings from the municipal level, which then prompts the province to issue a new grant to help municipalities pay for their new responsibility. Other times we lose service quality until municipalities find ways to make it work, often through amalgamated services: several small municipalities team up to pay collectively for services that none of them could afford on their own. This is why we have “upper-tier municipalities”, which are called Counties for rural areas and Regions for urban areas. Sharing those services can save us all money, giving us more resources for more or higher quality services.
But cost isn’t the only factor. While we can afford to do more when we do it together, the benefit of having services at the lower-tier municipal level is that your local town council is the place where you have the most political access. Every resident has the ability to access their municipal council, especially in a small town; but not many even know where to go to access their county government, much less the provincial or federal governments. When we amalgamate our municipalities or municipal responsibilities in order to make services more affordable, we lose some of our democracy. How we balance services with democracy is a values question we don’t always realize is in play, and one that we should take seriously.
Because the province sets the legal framework for everything that municipalities do, a change in any legislation related to municipalities can often have major impacts, even if those impacts are indirect. So while some “downloading” of services is explicit and obvious, there are many other ways that the province can increase costs and services at the municipal level without explicitly requiring municipalities to perform a service.
A great example is recent changes to Conservation Authorities. In Bill 23, the province changed the Conservation Authority Act in several important ways, including a) freezing Conservation Authority fees, and b) prohibiting Conservation Authorities from performing a bunch of planning services that they traditionally performed. Nothing about that change explicitly requires anything of municipalities, but it does considerably change municipal planning processes. It used to be that a municipality would contract with their Conservation Authority to perform a “peer review” of planning applications: when a developer wants to build on a property, they needed to get the CA to sign off on their documents to ensure that they were done properly. Now the CA isn’t allowed to do that, so municipalities need to either hire more staff to do those peer reviews internally, or else contract with consultants to do that work; but since CA fees were frozen, we’re still paying the CA for services they can no longer provide. Combined, those two changes to Conservation Authorities add up to a very different municipal process, and a lot of added expense.
Another fantastic example, which inspired this entire post, is the fact that the province doesn’t actually pay for healthcare and education. They are explicitly the responsibility of the provincial government, and we all believe that the province pays for them, but the reality is that the province only pays for part of those services. In healthcare, the province pays for operational costs (salaries of doctors and nurses, etc), and gives some grants for capital costs (like buildings), but most capital costs for buildings and equipment has to be fundraised; Brighton gave municipal grants to three medical organizations this year, adding up to tens of thousands of municipal dollars going toward healthcare. And the Ministry of Education will pay for teachers and school buildings, but not for playgrounds: Brighton just dedicated $85,000 to the playground fundraising efforts for Smithfield Public School, and the volunteers there still have hundreds of thousands to fundraise to make their playground plan happen. Also, part of our property taxes are devoted to education; I knew that, I just didn’t realize how much other funding comes from charity and municipalities to cover this “provincial” service.
The division of labour between the province and municipalities isn’t just a matter of who pays for a given service, but also who’s responsible for making sure that service is provided. Neither level of government is willing to do something that the other is technically supposed to do. The trouble is, it isn’t always easy to draw a clear line between one service or issue and another, and many issues have impacts that are felt across all levels of government.
A great example is Social Services. It’s technically the county’s responsibility to provide social services such as subsidized and supportive housing, emergency shelters, and addiction services; but the impacts of homelessness are felt at every level. At the lower-tier municipal level, homelessness increases costs related to bylaw enforcement (municipal bylaw officers), law enforcement (police services are paid by the municipality), and emergency services (fire departments are municipal), all of which have more calls when there’s a rise in homelessness. Meanwhile, a rise in homelessness beyond the capacity of the existing county social services budgets not only demands more social services, but also requires more ambulance services, which are provided by the county, because homeless people are more likely to need emergency medical care. And homelessness costs the province through higher healthcare costs (because people without a permanent address can’t get a family doctor, so their care often comes from the ER), courts (sentencing people for the minor crimes associated with homelessness), and of course grants to the other levels of government to address the issue. If any one level of government were to take on the issue of homelessness in a systematic way, or if all levels were able to collaborate, it would save all levels of government enormous amounts of money AND provide better outcomes for people experiencing homelessness. But so long as the costs are spread out across different jurisdictions, and no jurisdiction wants to step outside of their own zone, we will continue with the status quo that doesn’t work for anyone.
Collaboration is hard, but not impossible. But our difficulty in collaborating across jurisdictional divides is largely a matter of the way we’ve designed our government: the way we draw these lines of responsibility sets us up for trouble.
Ultimately, no matter which jurisdiction is responsible for our services, WE are the ones who pay for it. That’s why government spending is always contentious, and why collaboration is so critically important.