New Report Says it Will Cost Billions for Mississauga to Leave the Region of Peel

 

The so-called "battle" between Mississauga and the Region of Peel appears to be still chugging along with the city's calls for separating from the region growing louder.

In fact, Mississauga city council recently passed (in principle) Mayor Bonnie Crombie’s motion requesting the province pass legislation that Mississauga become independent from Peel. While Mississauga is able to govern most of its affairs, the Region of Peel controls and manages the local police service, waste management, public health and school boards.

Mississauga released a report, which was first written in 2003 and updated this year, that suggests the city sends some $85 million to Brampton and Caledon a year. Another argument that has been made is that while Mississauga contributes 60 per cent financially to the region and has 59 per cent of the population, they only get 50 per cent of voting power at regional council.

However, the Region of Peel has their own report disputing some of Mississauga's financial arguments. The report was done by the accounting firm Deloitte, but was not requested or commissioned by regional council. Brampton Mayor Patrick Brown's office, who had publicly disputed Mississauga's report, confirmed that he moved a motion on the March 28 regional council meeting to make it public.

"At the time, Bonnie Crombie left or was not in the chamber when the motion came forward, but it is our belief that based on Deloitte's findings, the numbers used by Crombie were incorrect, which is why I wanted the report released," Brown's spokesperson confirmed in a call to Quickbite News.

So what are the Deloitte report's findings? The report focused on what would happen if things stayed the same (what efficiencies could be found in the existing framework), if Peel Region was dissolved, or if amalgamation occurred with the three municipalities (Mississauga, Brampton and Caledon) becoming one city .

One main area concerns taxes, specifically how they would go up. From the report Deloitte finds that:

  • Amalgamation would mean additional taxes of up to $676 million over the next 10 years, resulting from the estimated impact of harmonizing wages amongst the regional and local municipal staff.

  • On the other hand, dissolving the region (which Mississauga leaving the Region would do) would require an additional $1 billion in taxes over the next 10 years. As the report states when comparing separating the municipalities is more expensive than amalgamation because:

  • The third option is to "find efficiencies" within the existing structure which would generate savings of up to $261 million over the next 10 years.

As far as property taxes go, they're expected to rise over the next decade regardless (although Brampton council decided to freeze the city's portion of the property tax bill in its most recent budget) due to inflation and "the need to address the existing infrastructure deficit across all governments."

The report says that, by the tenth year, it's expected that dissolution and amalgamation will require more taxes to be raised than if the region continues to function as-is.

That said, the report says that dissolution will put less of a strain on homeowners than amalgamation.

"While dissolution does require a more significant upfront investment, the cumulative change in tax levies over time under amalgamation demonstrates that amalgamation has the potential to be more costly over time as the impacts of harmonization are more significant and are not expected to be reversed," the report reads.

Here's a chart in Deloitte's report showing the changes in tax levies when compared to said changes versus the status quo with efficiencies:

So, how would dissolution impact the three municipalities?

The report does point out that Mississauga would benefit the most from dissolution, especially as it sees positive trends in financial metrics. The report says that significant changes for the city would include an increase of operating balance to operating revenue by 6.7 per cent, an increase of total balance to total revenue by 10.1 per cent and an increase of $2.4 million for net assets.

Dissolution, the report says, would hurt Caledon the most, as it doesn't have the tax base to support the additional expenditures it would be forced to take on.

The report says that Brampton's debt-related metrics would be most impacted in the event of a separation. The report says the city would be "required to recognize a proportion of the board's long-term debt as part of the municipality's financial statements to comply with accounting regulations. As a result, the municipality is predicted to proportionately consolidate long-term debt related to water and wastewater assets."

If the region dissolves, Brampton's debt to operating ratio would increase by 27.9 per cent.

The report says that amalgamation wouldn't hurt the municipalities debt-wise.

Ultimately, the decision of whether or not to dissolve the region lies with the province—and we've pointed out that Mississauga might have an edge over Brampton (and Caledon) when it comes to appealing to the province's fiscally prudent side.

In 2018, the Doug Ford government announced that it would review how regional government across Ontario is working. Municipal Affairs Minister Steve Clark said that former Waterloo Regional Chair Ken Seiling and former Ontario deputy minister Michael Fenn will serve as advisors to conduct a broad examination and provide recommendations to improve governance, decision-making and service delivery in regional governments.

More recently, the provincial government announced that it is seeking online feedback from the public for its review, specifically examining the regions of Peel, Durham, York, Halton, Niagara and Waterloo. It’s also looking at the Muskoka District and Simcoe County.

But while the decision does lie with the province, the Deloitte report says it's not a decision that anyone should take lightly. The report says that the dissolution of a regional government is not common in Canada or anywhere else in the world.

According to the report, regions are not typically broke up or dissolved to say one municipality money, and that dissolutions typically occur in instances where either a previous amalgamation became ineffective or when a smaller community showed it didn't have the same needs as larger ones.

The report also says that dissolution will lead to potentially lengthy negotiations between municipalities on how to divvy up regional assets.

But even though no decision has been announced yet, it's possible that the province already knows what it wants to do. And honestly, the Ford government wouldn’t have publicly announced a review of regional government if it didn’t want to make some changes.

So while the three Peel municipalities can present different reports and plead their case to constituents (and each other), Ford might already have a plan in place.

And there won't be much anyone can do about it.

With files from Ashley Newport

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