TORONTO - Ontario's Liberal government will recast its surplus spending rules in the same way federal cousin Stephane Dion has vowed to do, putting extra dollars into municipal infrastructure by ending the practice of committing all surplus funds to debt repayment.
Proposed legislation, which will be introduced when the Ontario legislature resumes sitting next week, would allow the province to spend a portion of any annual surplus on projects such as roads, bridges and public transit, Finance Minister Dwight Duncan said Wednesday.
Current accounting rules stipulate that all surplus funds be applied to the province's debt at the end of each fiscal year.
Generally well received by cash-strapped municipalities eager for any government assistance, Ontario's opposition parties assailed the legislation as a woefully inadequate way to fund towns and cities.
Municipalities would have to wait until the summer _ when all revenues finally come in, months after the fiscal year-end _ to see exactly how much, if any, surplus cash the province will have each year to share with them, Duncan added.
"It's very difficult to predict these things. Last year it was $2.3 billion,'' Duncan said as he announced the proposed legislation.
"If you look at that figure relative to total provincial revenues, it's a relatively small percentage, but that small percentage can translate into a lot of dollars that could be used either for debt repayment or investments in municipal infrastructure, and we've chosen to do that.''
Duncan said his "prudent, responsible approach'' would strike a balance by ensuring that surpluses go to both debt reduction and to government priorities.
The first $600 million of any surplus would go to the debt repayment. Any anything above that amount would be divided among municipalities based on population, as long as the surplus is at least $800 million, he said.
The province's plan closely mirrors a proposal put forward last month by federal Liberal Leader Stephane Dion, who said a Liberal government would invest any unanticipated surplus into a contingency fund for roads, bridges, sewers and other municipal projects.
Ontario's legislation amounts to little more than "crap shoot'' funding, said Progressive Conservative Leader John Tory.
The municipalities need regular, fixed funding from the province, not some unknown amount that may or may not materialize each year depending on Ontario's economic performance, Tory said.
"I think what we've had for the last number of years is an annual begging exercise by municipalities, and now we're going to add to that an annual crap shoot,'' he said.
"It's the way you can put aside some extra money for a vacation or for a flat screen TV, but it's no way to fund municipalities.''
The New Democrats said it was time the province resumed paying for many services the previous Conservative government downloaded to municipalities in the 1990s.
"This is a very timid approach. They're missing the boat,'' said NDP finance critic Michael Prue.
"They should be uploading the downloads. The municipalities would have much bigger smiles on their faces if the government did that.''
Mississauga Mayor Hazel McCallion said she'd prefer to have fixed provincial funding so her city knows how much it would get each year, but added she was very pleased the province had agreed to share its surpluses with local governments.
"We've been saying to the federal government: share your surpluses. In bad times we know you may not be able share the money with us, but now is the time to do it,'' McCallion, who has made the same demand of the province, said at a news conference with Duncan.
"The province has done exactly what we've asked them to do.''
The Association of Municipalities of Ontario welcomed the extra cash from the province, estimating local governments in the province face a $40-billion "infrastructure deficit'' that they cannot pay for without help from both the province and Ottawa.
"The announcement signals to us the importance that the provincial government attaches to the municipal government infrastructure deficit,'' said AMO President Doug Reycraft.
"That deficit is significant, and eliminating it has a lot to do with the future prosperity of our municipalities, and with the future prosperity of the province and the country.''
Last year's provincial budget predicted Ontario's total debt would grow to $162.9 billion by the end of this month.
