Ontario announces break up of Peel Region, cities to become independent by 2025

The Doug Ford government is breaking up the Region of Peel, paving the way for Mississauga, Brampton and Caledon to become independent cities by 2025.

Minister of Municipal Affairs and Housing Steve Clark tabled the legislation—dubbed the Hazel McCallion Act in a nod to the late mayor of Mississauga who began fighting for a stand-alone city—at Queen’s Park Thursday afternoon.

The bill enables the government to create a transition board to help “ensure the process is fair and balanced.”

• What does it mean to dissolve Peel Region? Here’s what you need to know

This board will be established sometime this year and would consist of up to five members appointed by the minister of municipal affairs and housing. These members will have expertise in labour, governance and finance, officials said, and will make recommendations in summer or fall of 2024.

“You need to ensure the transition board is set up for success,” he said, noting that once the legislation passes he hopes to have the board established “very quickly.”

“This is not something that I want to have significant delay on. … I want to get the debate moving. I want to be able to provide some certainty to these three communities that there's a transition point in place and that we have active and fulsome discussions on the changes.”

Some areas of analysis include labour relations, disentangling of regional services, property tax arrangements and financial sustainability. The board will also oversee financial decisions of all three municipalities, although it is unclear how much power they will have to interfere in city decision-making.

Under the new legislation, if in the next two years municipalities make a decision contrary to what the transition board advises, the minister has the ability to override it.

Financing is one of the biggest points of contention for Brampton, whose mayor has said the city of Mississauga would owe them at least $1 billion in infrastructure.

“Economic development will grind to a half, housing will grind to a halt, if we're not made whole,” Patrick Brown told reporters at a news conference Thursday afternoon.

“We're going to be watching this process very closely.”

All three municipalities in Peel contribute a large portion of their tax revenue towards the region as a whole.

Caledon Mayor Annette Groves, (left to right) Brampton Mayor Patrick Brown, Steve Clark, Ontario Minister of Municipal Affairs and Housing and Mississauga Mayor Bonnie Crombie attend a news conference at the Ontario legislature in Toronto on Thursday, May 18, 2023. THE CANADIAN PRESS/Chris Young

Brampton provides nearly 40 per cent of its tax revenue to the region while Mississauga contributes 45 per cent. This money is used to help pay for joint core services such as police, water treatment, roads, garbage collection and housing supports.

Once the three cities are independent, these services will most likely rest solely on the municipalities. Officials stressed Thursday that they expect local services to continue uninterrupted during the transition.

It is possible that some services such as police and utility rates for water services could remain regional.Nando Iannicca, the Regional Chair of Peel and chair of the Peel Police Services Board, says he is concerned about first responders as well as the thousands of employees who still need to provide reliable service to all three municipalities.

“It is a tight timeline,” Iannicca said after the provincial news conference. “Ninety-seven per cent of the services we provide at the Region of Peel are only done by us .Nobody else has a paramedic service. Nobody else has a law enforcement agency.”

“We have so many operating divisions, if you will, so I hope they understand all of the moving parts in a $41 billion corporation with 10,000 employees and how every role we play is vital.”\

Officials say that further legislation could be proposed in the fall of 2024 to “address any outstanding restructuring matters.”

By Jan. 1 2025, one year before the next municipal election, Peel Region will officially dissolve.

WHO BENEFITS FROM THIS?

Mississauga Mayor Bonnie Crombie has long called for separation from Peel Region, suggesting the city has outgrown its counterparts and would save much-needed revenue by standing on its own two feet.

She has suggested the move could save taxpayers in her city about $1 billion over the next decade and, in an interview with Newstalk 1010’s Moore in the Morning, said she” can’t imagine” that Mississauga owes Brampton money for this transition.

According to a 2019 report by Deloitte on the financial impact of services in Peel Region, Mississauga would benefit the most from dissolution while Caledon could struggle to maintain their finances. It found that if Peel Region were to dissolve, “significant effort will be required” to negotiate how assets and services will be divided.

“I've been waiting for this day for many years, as has Hazel McCallion,” Crombie said Thursday. I've only asked for fairness and equity in this process. I ask that our tax dollars continue to be invested our city, for our broken infrastructure, our programs and services.”

It's unclear how Caledon, who makes up about 56 per cent of the land area of Peel Region, will be impacted financially.

As Brown and Crombie spared at Queen’s Park over how much money each city owes the other in the separation , the mayor of Caledon claimed to be a “child” of “divorce.”

“I don't have any issues here in making sure that Caledon’s residents will be well served through this divorce,” Annette Groves told reporters, noting that while this is not something the city wanted, she is confident in the transition process.

“We are confident that this decision by the province did not lightly and that we are confident that we will be taken care of throughout this process.”

WHAT HAPPENS TO OTHER REGIONS?

The province says it will name regional facilities to the regions of Durham, Halton, York, Niagara, Simcoe and Waterloo to determine if the government is “relevant to the needs of its communities.”

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The government first created the position of “provincially-appointed facilitators” in November 2022. These facilitators were meant to review the roles and responsibilities of both the regional and municipal governments in the area.

Officials said these facilitators will make recommendations in terms of meeting municipal housing pledges “where regional governments are still required.” The Doug Ford government is using boosting housing supply as a primary justification for splitting up Peel, noting that housing starts in 2022 increased by nearly nine per cent.

It is possible the provincial government could dissolve further regional governments as part of this process. However, Clark stressed that if other mayors want change, they should speak out publicly.

“There’s no Hazel McCallion in any other municipality in Ontario (that) has campaigned on a certain structural model moving forward,” Clark says.

“I'm open to conversations with people but they're not going to be behind closed doors. If the mayor wants a different format, they're going to have to get in front of a podium and talk about it.”