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HomeMy WebLinkAboutTR-76-97 CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE & ADMINISTRATION COMMITTEE File# .1 p � , G- t Date: October 6, 1997 Res' #Uffl - By-Law# Report#: TEI-7 6_91-1 File#: Subject: RESOLUTION IN RESPONSE TO CITY OF TORONTO RECOMMENDATION RE: SOCIAL ASSISTANCE AND HOUSING COSTS Recommendations: It is respectfully recommended to Council that the General Purpose and Administration Committee recommend to Council the following: 1. THAT the following Resolution be endorsed by Council: THAT the Province be requested to confirm its funding commitment to . provincially mandated programs such as Social Assistance and Social Housing; THAT the Province be notified that the Municipality of Clarington is concerned that the dominant representation on the GTSB of the City of Toronto will not provide the opportunity for issues such as cost apportionment to be considered impartially; THAT the Municipality of Clarington objects to the City of Toronto responding to Provincial downloading by recommending a transfer of the funding responsibility for Social Assistance and Social Housing to the GTSB for financial contributions from Municipalities which have no influence on the GTSB; 2. THAT a copy of the report and recommendations be circulated to the area Municipalities of the Region of Durham requesting their endorsement; and 3. THAT a copy of the Resolution be forwarded to the Minister of Municipal Affairs and Housing, to the Minister's special advisor on the Greater Toronto Area Services Board. i BACKGROUND: 1.0 At the Council meeting of July 7, 1997, by Resolution #C-524-97,(Attachment #1) Item I-22, was referred to the Treasurer for preparation of a Resolution of Opposition. RECYCLED PAPER 8u ] PAPER RECYCLE iHiS IS PREMED ON RECYCLED PAPER TR-76-97 Page - 2 - 1.2 Item I-22 was a report prepared by the City of Toronto (refer to Attachment #2) which recommended that the City endorse financing income redistribution programs such as social assistance and social housing through the GTSB. The Toronto City staff were requested to examine the option of pooling social assistance costs across the GTA in response to the May 1, 1997 provincial downloading proposals. 2.0 The above Resolution was drafted in order that the Council of the Municipality of Clarington could voice opposition to the further downloading of the provincial impact by the City of Toronto to the GTA Municipalities and to request the Province of Ontario to follow through with its obligations in respect of the costs and administration of all income redistribution programs and other provincially mandated programs. 2.1 The provincial downloading and subsidy erosion has significantly impacted all Municipalities and each has adjusted service levels, etc. to accommodate the impact. These Municipalities are not in a position to transfer the costs or impacts of downloading to other levels of government or relieve themselves of the responsibility of providing the services they normally perform, which is what the City of Toronto appears to have done by its recommendation. 2.2 The Municipalities with little or no direct representation on the GTSB, will not have sufficient influence on the decisions related to these matters at the GTSB level. 2.3 The report acknowledges that the best option would be for the Province to take over 100 percent of social assistance costs and that pooling across the GTA is the second best solution. The Municipality of Clarington does not recognize the "second best" solution as an option that is in the best interest of the Municipality. Respec ly submitted, Reviewed by, 'Marie A. Marano, H.BSc., A.M.C.T., W.H. Stockwell, Treasurer. Chief Administrative Officer. MM/pp/hjl Attachments U I� L x, ATTACHMENT #1 }, C - 6 - July 7, 1997 Council Minutes COMMUNICATIONS I - 15 Resolution #C-521-97 Ontario Hydro Moved by Councillor Scott, seconded by Councillor Pingle ' International Media Monitor THAT the correspondence dated June 24, 1997 from John Coubrough, Ontario M06.GE Hydro - Distribution Operations forwarding"International Media Monitor - June 9 - 13",be received for information. 11CARRIED'f i # 1 1 - 20 Resolution#C-522-97 Town of Whitby Moved by Councillor Scott,seconded by Councillor Pingle I 1 Resolution re: Telephone THAT the correspondence dated June 25, 1997 from Donald G. McKay,Clerk, Gross Receipts Town of Whitby advising of Whitby's resolution pertaining to Telephone Gross Receipts Receipts Tax,be received for information. C10.AD "CARRIED AS AMENDED LATER IN THE MEETING" (SEE FOLLOWING AMENDING MOTION) Resolution#C-523-97 Moved by Councillor Novak, seconded by Councillor Dreslinski THAT the foregoing Resolution #C-522-97 be amended by adding the following thereto: "and that the resolution be endorsed by the Council of the Municipality of Clarington." Resolution#C-522-97 was then put to a vote and CARRIED AS AMEND 1 - 22 Resolution#C-524-97 j Greater Toronto Moved by Councillor Dreslinski,seconded by Councillor Novak Services Board D02.GT THAT the correspondence dated June 23, 1997 from Frances Pritchard, Administrator,City of Toronto regarding the financing of social assistance and social housing costs,be received and referred to the in Se temberr 1 97 preparation of a resolution of opposition to be presented to Coun p 'x "CARRIED„ 1� I i i 803 COUNCIL INFORMATION I-22 1r, 1 ATTACHMENT #2 Toronto JUN 2 6 1997 Corporate Services MUNICIPALITY OF CLARINGTON Margaret Rodrigues City Hall Commissioner 100 Queen Street West City Clerk's Division MAYOR'S OFFICE Sydney K. Baxter Toronto, Ontario M5H 2N2 Secretariat Section City Clerk Phone: (416)392-7031 TDD:(416)392-7354 June 23, 1997 Fax: (416)392-1879 ECONOMIC DEVELOPMENT COMMITTEE The Economic Development Committee will be considering Item: 1 Clause 5 of Economic Development Committee Report No.6,titled"Greater Toronto Services Board Financing of Social Assistance and Social Housing Costs,which was referred back to the Economic Development Committee by City Council at its meeting held on June 23 and 24,1997,for deputations This item will be discussed at the Committee's Meeting on: Friday,July 4, 1997 at 10:00 a.m. Committee Room 4,Second Floor,New City Hall For your information,a copy of the report/communication: X is attached may be picked up from the address below If you wish to address the Committee with respect to this matter on the above date,please notify,this Department by telephoning 392-7033 by-1 2:00 noon on the day be-fore the meeting. For your information, the Committee's Rule of Procedure for heariiigdeputations is as follows: "To more effectively deal with the numerous,items of business coming before the Committee,each delegate will limit his/her remarks to a maximum of 5 minutes except with the concurrence of the Committee." Please note that if you are interested in being present for this item,you should attend at the time indicated. However, the Committee may be delayed in its consideration of items preceding this item,and the delay could ex-tend to an hour or more. Mail or Fax Your comments to: Economic Development Committee, Secretariat Division, Department of the Cite Clerk. Second Floor, City Hall. 100 Queen Street West.Toronto, M5H 2N2. FAX No.-­322-1879. For more information, or if you have any questions,please call 392-7033. If y q you require a ©( ��1 assistance,phase call (392-7033)TTY 392-7354. J tJRIGINAL Frances Pritchard r i 1 �COP I ESJO. Administrator _ a I 814 > -�� CLAUSE EMBODIED IN REPORT No.6 OF THE CITY OF TORONTO ECONOMIC DEVELOPMENT COMMITTEE WHICH WAS CORPORATE SERVICES REFERRED BACK TO THE ECONOMIC DEVELOPMENT CITY CLERK'S DIVISION COMMITTEE FOR DEPUTATIONS BY CITY COUNCIL AT ITS REGULAR MEETING ON JUNE 22 AND 23, 1997. 5 Greater Toronto Services Board Financing of Social Assistance and Social Housing Costs The Committee recommends: 1. That City Council endorse financing income redistribution programs,such as social assistance and social housing,through the Greater Toronto Services Board(GTSB). 2. That the report (June 6, 1997) from the Commissioner of Urban Development Services be forwarded to the Minister of Municipal Affairs and Housing and to the Minister's special advisor on the Greater Toronto Area Services Board. The Committee submits the report(June 6,1997)from the*Commissioner of Urban Development Services: Subject:GTSB Financing of Social Assistance and Social Housing Costs Origin: City Council, May 12, 1997(p:1997\ug\uds\ed971195.p1n)-pv Recommendations: 1. That City Council endorse financing income redistribution programs, such as social assistance and social housing, through the Greater Toronto Services Board(GTSB). 2. That this report be forwarded to the Minister of Municipal Affairs and Housing and to the Minister's special advisor on the Greater Toronto Area Services Board. Background: At its meeting on May 12, 1997, City Council-adopted my preliminary report, dated May 5, 1997, on the Provincial May 1, 1997 downloading proposal. Recommendation 2 in the May 5, 1997 report directs City staff to explore the option of pooling social assistance costs across the Greater Toronto Area (GTA) and to examine the fiscal impact of such a model. j Council directed me to report on regional pooling of social assistance expenditure, which is,currently, the largest municipal income redistribution program in Ontario. However,as part of the proposed re-alignment of Provincial and municipal responsibilities, social housing, another large income redistribution program, is also to be . downloaded onto municipalities. Therefore, I have modeled the impact of financing both social assistaitce and social housing at the GTA level. Equity: I There are two broad approaches to fairness in detennining how to pay for public services: Ability to pay and benefits received. Income redistribution programs, by definition,cannot be operated on a benefits received basis, 8U5 Fv 2 { 1997 City of Toronto Economic Development Committee Report No. 6,Clause 5 '• I because the recipients of social assistance cannot pay for the social assistance benefits that they reeair#, `` i Therefore, the"benefits received" or"user-pay" principle, which could be used to argue that local services should be funded locally, does not apply to income redistribution programs, the very intent of which is to redistribute income. Since the benefits received principle does not apply to income redistribution programs, we are left with the ability to pay approach. Does a household in Metro have greater ability to pay than a household with the same income anywhere else in the GTA, or for that matter anywhere else in the province? Clearly, the answer is: No. There is m equity rationale why a household in Metro or Durham should pay more for social assistance or social housing than a household with the same income in York or Halton. ' Similarly, there is no equity rational why a business in downtown Toronto should pay more for social assistance or social housing than a similar business in Mississauga or, for that matter, in Windsor or Kingston. Society,at the provincial level, has determined that everyone should have a minimum level of income and housing, but clearly nobody suggests that the costs for these services should be levied exclusively from the communities in which the recipients happen to live. Most municipalities in Ontario, as well as the Association of Municipalities of Ontario (AMO), have passed resolutions asking the Province to take over 100 percent of social assistance costs, recognizing that these costs should be shared province-wide. However,if this is not possible,clearly the second-best solution is pooling across the widest possible area-at least,across the regional labour market/commuter shed. Financing through the Greater Toronto Services.Board: On December 17, 1996, the Minister of Municipal Affairs and Housing, acknowledging the interdependence of the communities in the GTA, announced his intention to create the GTSB, whose mandate is region-wide service and policy co-ordination. It is proposed that the responsibilities of the GTSB include the financing of the municipal share of income redistribution programs. This measure would help"tacit municipalities in the regions to the Toronto core in much the same way that the 1953 govenfance arrangements did with downtown Toronto and the Metro suburbs,"as David Crombie recommended and the bovernment of Ontario agreed. Like education, municipal income redistribution programs are Provincially-mandated and are available to all i citizens of Ontario. Take the case of a family living in one of the new auto-oriented suburbs surrounding Toronto, where both wage earners lose their jobs, and they cannot meet their mortgage payments. This family may end up on social assistance and may have to look for an inexpensive place to live that is well served by transit because they can no longer afford a car. It would not be surprising if they ended up in one of the older rent-controlled apartments in Toronto or in a social housing unit,of which Toronto also has a disproportionate share. I Another cost that has been proposed for GTSB finance is GO Transit service. Clearly in the case of transit services a better argument can be made to finance these based on use of services. For example, the residents of York region do not use GO Transit to nearly the same extent as the residents of those communities along the Lakeshore GO Train line. Therefore,it is not unreasonable to ask residents of southern Peel or Halton to pay more for GO service than, say, the residents of Markham. Even if a resident of Oakville never rides the GO Train,that resident benefits from the GO Train, because the availability of an attractive alternative to the QEW reduces congestion on the QEW. Also the availability of convenient GO Train service increases the value of property that is well ser%iced by GO Transit. Social assistance and social housing do not have the same impact on the well- j being of neighbouring residents as access to superior transit services. The residents of neighbourhoods adjacent to the Jane and Finch housing development in North York do not benefit more from th-lit project than the residents of the neighbourhoods north of Steeles Ave. i Two Models of GTSB Financing: i Table 1 summari zes the impact of the Provincial downloads announced on May 1, 1997,with and without GTSB financing of social assistance and social housing costs. We have now received estimates of the impact of the May 806 i 3 1997 City of Toronto Economic Development Committee Report No. 6,Clause 5 1, 1997 downloads from each regional municipality in the GTA, and have used these in the attached analysis. In some cases these vary from our initial estimates. Two models of allocating GTA social assistance and social housing costs are presented: Model A allocates these costs to each regional municipality based on its share of 1992 market value without distinguishing among classes of property(eg. houses,apartments, commercial and industrial). That is, if the total market value of property in a municipality is 20 percent of the GTA total, then that municipality is allocated 20 percent of GTA social assistance and social housing costs. Model B weights the market value of each class of property by its 1992 GTA-wide average effective tax rate. For example, houses are currently taxed, on average, at 60% of the average effective tax rate for all classes, and are therefore weighted at 60%in Model B. 1 Table 2 and table 3 show the details of the calculations for Model A and Model B,which are summarized in Table 1. 1992 market values were used throughout the analysis, because these are the most recent data that are available. Of course, market value of any vintage is only one possible basis for pooling region-wide costs. Other measures of ability-to-pay, such as median household income by municipality, may be more appropriate for allocating the residential share of the cost of regional income redistribution programs. Another example is provided by British Columbia's residential property tax for education. In this case each municipality is required to contribute to a province-wide pool, based on a formula comprising one half market value and one half the number of households .7 in the municipality. Conclusion: GTSB financing of social assistance and social housing costs, based on 1992 market values, reduces the adverse impact of the downloads announced May 1 on Metro Toronto and Durham,and equitably shifts part of the burden of these costs onto Peel, Halton and York Region. GTSB finant fig of social assistance and social housing costs will also help to ensure that Toronto remains,as the Minister for Municipal Affairs and Housing stated,"A strong centre to an area that is Ontario's economic engine." " l i i 4 . 1997 City of Toronto Economic Development Committee Report No. 6.Clause 5 = ,. Table 1 Downloading and GTSB Financing of Social Assistance & Social Housing Costs Metro York Peel Halton Durham G.T.A. $ millions Download without GTSB Finance(1) 347.0 (4.6) (1.2) 18.8 27.0 387.0 Download&GTSB Finance(Model A) 205.5 78.9 27.8 55.1 19.7 387.0 Download&GTSB Finance(Model B) 240.4 58.5 36.5 45.1 6.5 387.0 as%of Total Tax(2) Download without GTSB Finance 7.4% -0.5% -0.1% 4.2% 5.2% 5.0% _ Download&GTSB Finance(Model A) 4.4% 9.1%` 2.3% 12.2% 3.8% 5.0% T, Download&GTSB Finance(Model B) 5.1% 6.7% 3.0% 10.0% 1.3% 5.0% Municipal share of GTA social assistance&social housing costs allocated by: Model A= Unweighted 1992 market value(calculated from equalized assessment) Model B= Weighted 1992 market value(weighted by GTA-wide average effective tax rates by class) i (1) Impact of May 1 announced downloading as calculated by staff of each regional municipality. Note: In some cases these estimates vary from those previously prepared by City of Toronto staff. Social housing costs as per provincial estimates; additional$220 m repair/capital reserve costs as estimated by Coop Housing Federation are excluded. (2)As a percentage of total 1995 property taxes (from Municipal Affairs, MARS Database) a d � � i k i UU 5 1997 City of Toronto Economic Development Committee Report No. 6, Clause 5 ARM Table 2 SIM Model A: Costs Allocated by 1992 Market Value (Unweighted) $millions Metro York Peel Halton Durham G.T.A. Social Assistance: Without GTSB Finance (1) 422.3 33.1 82.4 14.8 63.4 616.0 GTSB Finance by Unweighted Market 339.4 87.0 100.6 44.3 44.8 616.0 Change (83.0) 53.9 18.2 29.4 (18.6) 0.0 Social Housing: Without GTSB Finance (2) 365.0 49.0 80.0 33.1 29.1 556.2 GTSB Finance by Unweighted Market 306.4 78.6 90.8 40.0 40.4 556.2 Change (58.6) 29.0; 10.8 6.9 11.3 0.0 Combined Change (141.5) 83.5 29.0 36.3 (7.3) 0.0 *ttttRt ttttt ttttt tttt! ttttt Rt1rRf May1/97 Proposed Download 347.0 (4.6) (1.2) 18.8 27.0 387.0 Download &GTSB Finance(Model A) 205.5 78.9 27.8 55.1 19.7 387.0 I (1) 1995 municipal"own source"oper&capital expenditure on GWA(Municipal Affairs, MARS database) $853 million Prov download of FBA and social assist admin as determined by each regional municipality (2)$905 million Prov download of social housing expenditures as determined by each regional municipality 1992 market value calculated from 1992 equalized assessment by discounting for impact of business tax ie. market value=equalized assess X realty assess/(realty assess+business assess) U UY / r 6 1997 City of Toronto Economic Development Committee Report No. 6,Clause 5 Table 3 Model B: Costs Allocated by 1992 Market Value (Weighted by Effective Tax Rates) $ millions Metro York Peel Halton Durham G.T.A. Social Assistance: Without GTSB Finance(1) 422.3 33.1 82.4 14.8 63.4 616.0 GTSB Finance by Weighted Market 357.7 76.3 105.2 39.0 37.8 616.0 Change (64.6) 43.2 22.8 24.2 (25.5) 0.0 Social Housing: Without GTSB Finance(2) 365.0 49.0 80.0 33.1 29.1 556.2 GTSB Finance by Weighted Market 323.0 68.9 94.9 35.2 34.2 556.2 Change (42.0) 19.9 14.9 2.1 5.1 0.0 Combined Change (106.6) 63.1; 37.7 26.3 (20.5) 0.0 ARkRIi/.R tttltf; RRRN f}ft� tRR1eR f!t•Q May1/97 Proposed Download 347.0 (4.6) (1.2) 18.8 27.0 387.0 Download&GTSB Finance(Model B) 240.4 58.5 36.5 45.1. 6.5 387.0 (1) 1995 municipal"own source"oper&capital expenditure on GWA(Municipal Affairs, MARS database) $853 million Prov download of FBA and social assist admin as determined by each regional municipality (2) $905 million Prov download of social housing expenditures as determined by each regional municipality Market Value was weighted by the GTA-wide class average effective tax rate/GTA-wide all classes eff.tax rate (1992 market values& 1992 mill rates)as shown in table below: Residential (1&2 units) 0.579 Residential (3-6 units) 0.765 Residential (7+units) . 1.958 z Commercial 1.759 Industrial 2.127 Other Realty 1.211 Farms 0.875 Pipelines 5.380 i