Good news: The Ontario government, along with the Association of Municipalities of Ontario and the City of Toronto, jointly announced earlier today a plan to upload the costs of several provincial income assistance programs back to the provincial level over the next decade. This will give municipalities some significant fiscal breathing room – as it takes the cost of this income-distributive program off the municipal tax base and returns it to the provincial tax base, where it belongs. The timing is good as the demand for income assistance programs may well increase with the current economic crisis.
Bad news: The cost of the provincial social housing program – which was downloaded to municipalities under the former Harris government starting in 1998 – remains at the local level. Municipal taxpayers are responsible not only for the ongoing operating costs of much of the province’s affordable housing, but they are also liable for a long-term capital repair bill that has been estimated at $1 billion-plus.
In the 2007 provincial budget, the Ontario government started to upload social housing costs by taking the costs from the “915” municipalities back to the provincial level. Housing costs for the City of Toronto and the rest of Ontario remain with local taxpayers. Those costs are significant. In Toronto, for instance, the total amount for affordable housing in the city in 2008 was $537 million, with local taxpayers picking up $192 million. The rest of the costs were covered by rents from the residents and transfers from the federal government.
A significant portion of social housing downloaded by the province to municipalities was originally administered by the federal government, which started its own download in the 1996 federal budget. Unlike the province, however, the feds decided to pass along a significant portion of the costs of the housing that they downloaded to the province. In 2008, the federal government passed along $508 million to Ontario for downloaded social housing, plus another $85 million under the federal-provincial affordable housing program. The Ontario government passes along a significant portion of these funds to municipalities, but expects local taxpayers and lower-income tenants to pay most of the costs of the downloaded provincial housing programs.
Earlier this year, the Ontario government created a one-time-only $100 million social housing repair fund, and set up a $500 million loan fund, to help deal with the aging and deteriorating provincial housing stock (mainly the former Ontario Housing Corporation public housing). However, some estimates put the actual repair bill at $1billion-plus.