The nation’s capital is facing a financial crisis, Ottawa’s Mayor Mark Sutcliffe said in a statement issued on Thursday.
The mayor highlighted several areas where the upper tiered governments had not supported the city adequately compared to other municipalities of its size. This has caused the city to face an uncertain future and rely on its residents heavily to keep services going.
“Our city is facing unprecedented financial challenges that are not of our making,” Sutcliffe said. “As the nation’s capital, we are uniquely impacted by the decisions of other levels of government. This can’t continue or we will face historic challenges in our next budget. We deserve our fair share.”
According to the mayor the city is “burdened” by federal payments in lieu of taxes (PILTs) and transit funding. Sutcliffe and city council have been extremely vocal about the lack of funding for transit, going as far as reducing service on Line 1 of the O-Train.
PILTs are payments from the federal government that compensate for its portion of property taxes if the tenant won’t pay.
Sutcliffe said that over the last several years the federal government has been reducing how much PILTs are paid to the city. It has lowered from $194 million to $164 million per year over the past eight years.
“Imagine if you, as a property owner, could decide how much you pay in property taxes every year,” he said. “That’s exactly what the federal government gets to do.”
To make up the difference the burden is place on residents. City staff estimate that the federal government plans to leave 50 per cent of the properties owned in the capital, which could result in a lost tax revenue of $445 million over the next decade if it happens.
The city has unique challenges, officials say, due to the large area it spans. One of the issues impacting Ottawa is the lack of funding to build up its transit services, including the highly anticipated Line 2 of the light rail transit (LRT) system.
According to the mayor, the city does not receive funding for transit projects like Toronto.
“While major transit infrastructure in the GTA is fully funded by the provincial and/or federal governments, Ottawa residents are expected to pay 33 per cent,” he said.
To date, Sutcliffe said, Ottawa residents are covering 56 per cent of Phase 2 of the LRT, when “Toronto residents pay nothing.”
Ottawa’s mayor is asking the governments to:
- Reimburse unpaid payments in lieu of taxes (PILTs)
- Ensure fair PILTs
- Maintain PILT payments at the appropriate amount while exiting up to 50 per cent of its Ottawa properties
- Restore fair transit funding
- Support sustainable transit
This comes as the Ontario Big City Mayors launched a new campaign demanding the levels of government help in solving the increasingly growing homelessness crisis. It includes asks for funding to mental health and addiction supports and crisis centres.