Rural municipalities were facing some serious economic questions in 2020 due to the pandemic. What initially looked like a tidal wave of red ink for rural municipal budgets was reduced to a trickle thanks to support from the federal and provincial governments.
The question for 2021 is how much money is on the horizon for municipalities, from the upper levels to lead the economic recovery.
Rural Ontario and its municipal budgets were dealt a curveball in 2020. Lockdowns, stay at home orders and increased unemployment chipped away at the bottom line. The province’s financial accountability office estimates the pandemic will cost the 444 municipalities $6.8 billion in 2020 and 2021.
“There was a lot of uncertainty for municipalities on whether they would get some funding,” said Association of Municipalities Ontario executive director Brian Rosborough. By last summer, the federal and provincial governments came up with $4 billion in funding with the knowledge that not all losses would be covered. Factor in the $1 billion in found savings by municipalities in their operations, the losses were reduced even more.
Municipalities are closest to constituents and rural ones in particular. They are the most nimble, said Doug Struthers, mayor of Merrickville-Wolford, a small township west of Kemptville. “Council had voted for a 3 percent increase in taxes in February (2020). When the first lockdown occurred (March 2020) we revisited that decision and dropped it to 0.4%.”
Struthers also points out they reduced commercial water rates and converted the office staff to home based. “We saw no significant financial impact from the pandemic.”
It’s a sentiment echoed by the mayor of the Township of Alfred-Plantagenet, Stephane Sarrazin. “We were able to withstand the pandemic as we were able to save by having most municipal employees work from home. We also don’t have the many amenities of larger municipalities.”
While the financial impact was dramatically reduced in 2020 by the federal and provincial governments, what is on the horizon isn’t quite clear. $500 million has been allocated for the province’s 444 municipalities in the 2021 Ontario budget. “It’s recognition we’re not out of the woods yet,” says Rosborough. AMO has a request with the federal government to match those funds.
What has Rosborough optimistic for 2021 is that the upper levels of government show support and confidence in the recovery. “It’s great they realize municipalities will lead us out of the pandemic.”
Canada’s Infrastructure Minister, Catherine McKenna has been asking communities for shovel-ready projects that could be funded and provide immediate jobs. Sarrazin agrees that municipalities will have a prominent role in the recovery but he is looking for broad support. “We have many small businesses and restaurants that slipped through the cracks in the early support programs.”