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New tax not necessarily the answer, mayor says

AMO proposal for HST increase is immediately shot down by premier

By Joel Wittnebel/The Oshawa Express

Ontario’s municipal leaders have called for a one percent increase on HST to fund much needed infrastructure improvements and maintenance in the coming years. For Mayor John Henry, the dollars may already exist, it’s just a matter of finding them.

“I’m always concerned when you put another level of tax onto a resident,” Henry says. “I think there are ways to find money in this economy that already exists. So, I think the opportunities exist, I just think they have to look a little harder.”

Earlier this month, the Association of Municipalities of Ontario (AMO) called on Premier Kathleen Wynne to make the increase. AMO represents nearly all of Ontario’s 444 municipalities and according to their numbers, the province’s towns and cities could be staring down the barrel of a $4.9 billion shortfall in the next 10 years to keep funding critical services while addressing the infrastructure gap.

“We’ve done our homework, and it’s clear that property taxes can’t keep up with growing local needs,” said Lynn Dollin, AMO president. “Municipalities have been funded the same way for decades. Obviously, times have changed and if we want to build communities for the future, municipal governments need a greater local share of tax dollars.”

However, the idea was almost immediately shot down by the premier.

Nevertheless, municipalities will be left with finding a way to fund much needed infrastructure improvements.

In Oshawa, the 2017 budget pointed out a $212 million infrastructure gap of projects in the future that currently do not have a funding source and according to the city’s own financial strategy, the city’s infrastructure reserves are historically underfunded.

For Mayor Henry, he believes Oshawa is in better shape than others in Ontario.

“Some mayors in communities are worried about their ability to do their infrastructure. We’ve been lucky here in the city, we’ve been a little ahead of the game and we’ve done some really good managing of our assets,” he says.

The need for infrastructure dollars in the coming years forced council to apply a one-percent tax increase on the 2017 budget solely to gain infrastructure dollars. It was estimated to raise an additional $1.2 million.

The increase was originally proposed in 2014 during preparations for the 2015 capital budget and as part of the city’s financial strategy endorsed by council in 2015. However, the recommendation was not implemented.