Potential impacts unclear for London despite Ontario cancelling retroactive budget cuts to municipalities

While the cancellation of retroactive funding cuts to municipalities will offer breathing room for London’s current budget year, the city will still have to address potential budget impacts in the near future.

On Monday, Ontario Premier Doug Ford announced his government would walk back plans to slash funding to municipalities.

The move leaves London off the hook for an estimated $4 million that city staff had reported as the municipal budgetary impact from previous provincial funding cuts.

The decision to cancel retroactive cuts also means the provincial rollback is only good for 2019, leaving potential impacts unclear for London’s upcoming 2020-2023 multi-year budget.

WATCH: Ford government bows to public pressure, hits ‘pause’ on municipal funding cuts

1:50 Ford government bows to public pressure, hits ‘pause’ on municipal funding cuts

Previously, the cuts targeted public health, child care and ambulance services as the province sought to tackle an $11.7-billion deficit.

The initial cuts drew ire from a number of local government leaders, who warned they’d have to consider raising taxes or cutting services to make up the difference.

The reversal garnered praise from London Mayor Ed Holder, who, in a statement, applauded Ford and Minister of Municipal Affairs and Housing Steve Clark for “demonstrating much-needed flexibility.”

A report, which was published prior to Monday’s reversal announcement, pegs the annual cost for the next four years of the multi-year budget at $6.6 million.

On top of a potential budgetary impact, the province has been issuing a penny-pinching plea to municipalities and district school boards, asking them to save four cents on every dollar spent.

Ontario has also introduced an Audit and Accountability Fund, which would provide $7.35 million to help local governments conduct line-by-line reviews.

Ward 11 Coun. Stephen Turner told 980 CFPL that the savings burden should be carried by the province rather than municipalities.

“They had a lot of rhetoric about where money could be found and they’re now finding that rhetoric doesn’t really balance budgets,” Turner said.

“They walked away from billions in the cap-and-trade revenue, which would’ve balanced the balance on its own, but then, on top of that, they’re looking at paying penalties of about $1 billion for putting beer in corner stores.”

Turner added that cities like London have already gone to lengths successfully finding millions in savings, thanks in part to a London audit committee that Turner sits on. The city has also maintained a AAA credit score rating and has been engaged in an ongoing service review since 2015.

According to Turner, putting the financial blame on cities breathes an air of hypocrisy when coming from a provincial government who had its credit score rating downgraded within months of taking office.

“That’s not as a result of the debt that was left to them by the previous government. It was the result of their ineptitude,” Turner said.

 “They need to get their act in order and they’ve got to stop doing it on the backs of municipalities.”

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London’s corporate services committee will be looking at the city’s budget during their meeting on Tuesday.

— With files from Devon Peacock