To reach affordability targets using 2004 prices as a goal, the Canada Mortgage and Housing Corporation says 5.8 million homes have to be built by 2030 and estimates the cost of municipal infrastructure is approximately $107,000 per unit.

This works out to some $600 billion. 

For Mississauga, which has been asked by the PC government to create 120,000 new homes in seven years, the infrastructure bill would work out to about $12.8 billion.

Mississauga currently owns about $14 billion in assets, much of which needs repair or replacement the City does not have the money for.

These are the types of staggering figures the city’s next mayor will have to wake up to every morning.

In 2022, the budget document that year stated, “The City’s current funding sources do not allow for fully funding of the City’s SGR (state of good repair) needs.”

According to figures two years ago City Hall was short $40 to $45 million annually with approximately $400 million to $450 million in needed infrastructure investments over a decade that did not have a funding source.

According to data from the City, the cost of projects just related to pavement that will be left unfunded to 2031 is $30 to $43 million. The City reported the infrastructure gap for stormwater alone is about $3 million each year over the next decade.

Many of these calculations were made before the impacts of the developer friendly Bill 23 were known.

Under the Doug Ford PC government’s housing legislation, which will significantly limit the City’s ability to provide important housing-related infrastructure, Mississauga estimates it will lose $815 million to $885 million in development charges over a decade. These fees typically paid by builders are needed by municipalities to ensure the construction of all the features required for new homes, and their residents, including sub-surface infrastructure, roads, community centres, policing, paramedic and fire services. The financial hit caused by the developer-driven move was described by Mississauga’s former city manager and CAO Paul Mitcham as “devastating” and the “most significant legislation” the municipality has ever seen. 

Tack on the need for hundreds of millions to create a green transit system, and the current expectation that roughly one billion dollars has to be found to operate the Hurontario LRT over 30 years. Added to all the other day-to-day costs of running the seventh largest city in the country, one gets an idea of the challenge facing Mississauga’s next mayor.

The big question is this: do property taxpayers want a leader who will keep costs down for them, denying Mississauga many of the features expected in a dynamic, growing city while the bills for infrastructure pile up for the future; or do they want to avoid crippling tax increases down the road, by swallowing hikes now that will create the type of city residents want to live in? 

For decades, Mississauga’s council members, under the late Hazel McCallion approved next to no tax increases while relying on accumulating development fees rolling in as subdivisions sprouted up like mushrooms where farm fields made way for the suburban future. 

Eventually, when the city was built out and the building fees dried up, staff and council members wondered how the cost of future infrastructure repairs and replacement would be covered. Hazel stepped down, and Bonnie Crombie began a period of responsible fiscal management with tax increases that came in around the rate of inflation. While the growth of the infrastructure deficit slowed, it still continued.  

Minimal funds were left for Mississauga to attract investment from higher levels of government, through partnerships that often require City Hall to commit its share for major projects.

No longer constrained under McCallion’s authoritarian style, and under the leadership of a new City Manager, Janice Baker, departments began to sound the alarm. The city’s fire service, for example, under the decision making of its new chief, Deryn Rizzi, pointed to a system with stations under disrepair, some with asbestos still inside, and the utter lack of attention by council members that saw response times in life or death situations balloon to double the national standard for safety. Mississauga only has half the number of fire stations it is supposed to operate to keep residents safe.

It was a similar story for stormwater infrastructure, many of the City’s buildings, the neglected maintenance of Mississauga streets and bridges, and almost every other municipal area that impacts the lives of residents every day.  

So how will the next mayor handle this daunting financial challenge after stepping into the role following the June 10th election?  

To provide voters with a better understanding of the policies that candidates are proposing for Mississauga’s financial future, The Pointer reached out to Stephen Dasko, Alvin Tedjo, Dipika Damerla, Carolyn Parrish and George Tavares to find out how they plan to manage the City’s budget through the remainder of the council term, and beyond.  

One issue candidates have debated ahead of election day — advanced polling is now open — is a possible tax freeze to help those homeowners who cannot afford the current cost of living.  The ongoing affordability crisis, fueled by lingering inflation across sectors, has put candidates in one of two camps — cut spending to help taxpayers who then suffer from a lack of services; or increase taxes to provide what is needed, while residents are forced to struggle with even higher costs. 

With added pressures from the PC government’s Bill 23, the billions of dollars in infrastructure spending that will be required, along with the looming transfer of certain departments from the Region of Peel, there is a lot weighing on the City’s budget.

Mississauga’s 2024 financial blueprint laid out a 2.34 percent tax increase on the City’s share of the overall bill for residential property owners to help fund $679.5 million in operating costs — a $45 million (6.3 percent) increase over 2023. The overall gross capital budget for 2024 came in at $531.3 million and included “substantial investments in maintaining the City’s infrastructure in a state of good repair.” 

In an effort to curb the affordability crisis, some candidates have proposed a tax freeze for Mississauga residents. It’s a strategy some candidates have labelled fiscally irresponsible given the future growth anticipated in Mississauga, the current state of the City’s infrastructure and the grave need to keep up with service delivery in anticipation of the growth expected to surge into the city. 

With Mississauga at a point of such high growth in housing and infrastructure, on top of increasing social services need and the downloading of Regional services to the City, Dasko made clear his position on freezing taxes, stating “it would be totally irresponsible to support tax freezes for Mississauga for the next two years.” The mayoral candidate said he will keep taxes at or below the rate of inflation to allow the City to continue sufficient service delivery for residents. Damerla also said that over the next two year, she intends to keep taxes affordable and will only increase them at or below the rate of inflation — something she said will fund through “pausing the $27 million Bloor Street project and pausing bike lanes on streets that do not connect to a network.” Damerla also pledged to support low-income seniors by deferring their property taxes.

In her response to The Pointer, Parrish said keeping taxes at or below inflation would be ideal, but cautioned that emergencies can arise that could cause a tax hike. Parrish has proposed looking at the budget from day one after approving the previous budget through to when it comes to council at the end of the year to keep track of motions approved with financial attachments. She suggested Ward councillors hold quarterly budget meetings to review what has been passed and its impact on the budget, as well as other priorities they would like council to review or projects that can be revisited on the list at a later date. 

“It shouldn’t be done at the end of the year in one fell swoop. It’s too much to absorb, both for the councillors and for the public,” she explained. “You’ve got to work with people for the whole year, not hit them with it at the end. And you have to build them so that if you are going to put an increase in people understand why.”

“You can’t do zero but it increases because even with the proviso that we’re going to build more houses and collect more property tax, you’ve seen how long it takes to actually build a house or get approval for anything in Mississauga, it takes forever. So it’s not going to happen in the next two years. You’re not going to get suddenly piles of houses built and apartments until your income goes up. So you can’t promise zero because you can’t deliver zero.”

Tavares said he would not support a tax freeze, and that “while freezing taxes may seem appealing in the short term, it can lead to significant financial challenges in the future.” Freezing taxes, he said, is “short-sighted and can lead to serious consequences down the line.”  Instead, Tavares’ financial approach would prioritize responsible fiscal management, while ensuring that annual tax increases are kept closer to or slightly above the rate of inflation. If the City wants to lower taxes and improve residents’ standard of living, Tavares said City Council and staff will need to focus on promoting sustainable development and growth.  

Tedjo has been the lone candidate among those vying for the mayor’s chair that has proposed freezing property taxes for the next two years (the remainder of the current council term) given the current affordability crisis plaguing many of Mississauga’s residents who have been pushed into poverty or are barely making ends meet. The mayoral candidate has released an affordability plan that includes freezing taxes until 2026, providing residents 65 and older with a property tax rebate of $420 on annual household incomes lower than $60,000, and introducing a new property tax classification for local small businesses that will reduce their property tax burden by 15 percent, among other actions.

However, the move is on par with previous voting decisions from the candidate. During 2024 budget deliberations in December, Tedjo voted in favour of a motion crafted by Councillor Brad Butt requesting “that the proposed 2024 Capital Infrastructure and Debt Repayment Levy be reduced from three percent to two percent.” Mississauga CAO and City Manager Shari Lichterman cautioned that staff increased the infrastructure levy and debt repayment levy to three percent in response to significant inflation impacting capital programs. A breakdown from City staff showed adjusting the infrastructure levy from three to two percent would result in cost savings of roughly $24 for residents, while $6.4 million for critical infrastructure would be lost.

The City’s Director of Finance Marisa Chiu told councillors if staff were to bring it down one percent it would mean either a depletion of the City’s tax capital balance by 2033 or staff would have to cut its capital projects by roughly $50 million. She added the three percent levy was “determined to be necessary in order for the city to maintain our healthy tax capital reserve and also to fund our infrastructure needs moving forward. Councillor Butt’s motion failed in an 8-4 vote with Tedjo among those in favour and Dasko, Damerla and Parrish voting against.

“Everyone is feeling the pinch of inflation and rising interest rates — now is not the time for a tax increase,” Tedjo said in a response to The Pointer. This, he explained, can be done while maintaining the city service levels through his plan, which proposes using other funding sources such as revenue from vacant homes tax, drawing down from the “rainy day” reserve fund, securing federal and provincial housing dollars, and growing the tax base to allow the City to provide a tax freeze until 2026.  

But a tax freeze could be a hard sell for council when taking into consideration Mississauga’s infrastructure gap. Previous projections from staff have determined that over the next ten years, on average, the City would be required to spend $206.6 million annually to maintain and replace existing assets. Additional funding of approximately $40 to $45 million per year would be needed — the City invested $40 million in its 2024 budget — to keep infrastructure in decent condition. Now, 2024 estimates show that over the 10-year period the City must spend, on average, $240.2 million annually to maintain existing assets in good condition and replace those that are too old. Mississauga reported a $44 million infrastructure shortfall for 2024 in its latest budget document. 

This is on top of funding and maintaining the infrastructure needed to support the PCs Bill 23, which mandates 120,000 new units in Mississauga by 2031. One major challenge facing the City, however, is Premier Doug Ford’s failure to explain how municipalities will shoulder the weight of this Bill, or whether the Province will provide the desperately needed funding, for the billions of dollars that will be required to fund roads, subsurface infrastructure, community centres, libraries, schools, fire stations, police divisions, paramedics, transit and other features needed to support hundreds of thousands of new residents.  

The City’s 2023 pre-budget submission previously warned that “Without compensation, and limited revenue tools at our disposal, the City and our taxpayers could be facing an even more difficult year ahead.” 

In total, Mississauga owns about $14 billion in assets. It takes a massive investment to ensure this web of interconnecting infrastructure is maintained in good working condition and operational. The ultimate objective is to keep infrastructure in a “state of good repair,” meaning ensuring public road, bridge or building are safe and usable without major issues, or the water main is functioning properly with minimal risk of a bursting. But as Mississauga works to keep its infrastructure above water after decades of financial neglect, these assets require widespread improvements.

The 2024 budget highlighted “state-of-good-repair projects, for the maintenance and replacement of existing infrastructure, are the City’s first priority.” However, it also cautioned that “The City’s current funding does not fully fund all capital requirements, but balances the need to maintain City infrastructure, fund new projects as required, and minimize debt.” With 65 percent of City buildings being about 30-years-old, only two-thirds are identified as being in fair-to-good condition. The document also highlighted that the funding from federal and provincial infrastructure programs “does not keep up with the increasing challenges the City faces to keep Mississauga’s infrastructure in a state of good repair.” 

The City has added $5 billion to the 10-year capital forecast as part of the 2024 budget to meet projected infrastructure needs. Although the purpose of the PCs Bill 23 is to accelerate housing supply, changes under the legislation to the way municipalities have traditionally collected fees from developers to help municipalities offset the cost of the infrastructure required to support the construction of new homes have left cities scrambling to plan for the surge in growth. While the approved tax increase on the City’s share of the property tax bill remains around the historic rate of inflation, The Pointer previously reported that the $5 billion added as a result of Bill 23 over the next 10 years will place significant pressure on the tax base if funding assistance is not offered by the PCs to pay for Ford’s aggressive housing plan. 

To put it simply, the property tax base cannot support the billions of dollars needed for infrastructure, the billions more on top of that to accommodate explosive growth mandated by the Province and ongoing pressures created by inflation and past budget freezes. 

As Mississauga’s massive infrastructure bill looms over council and whoever will sit at the head of the table, candidates are looking to recent federal and provincial funding announcements — the federal government’s $6 billion Canada Housing Infrastructure Fund and the Province’s $1 billion Municipal Housing Infrastructure Program — as a positive sign to tackle the City of Mississauga’s infrastructure gap. But The Pointer previously reported on how cash-starved Mississauga has been when it comes to attaining infrastructure funding from upper levels of government over the last several years. 

Candidates offered few details on the financial decisions the would make to bring this gap down, but instead referred their plans to pleading to Mississauga’s political counterparts for the funds to mend the City’s financial uncertainty. 

“We are definitely the children of the province in that we’re going to need infrastructure money coming from higher levels of government,” Parrish told The Pointer. “The way to get that is obviously to try to meet our housing targets.” The Province introduced the $1.2 billion Building Faster Fund in 2023, but Mississauga has failed to secure housing to date after failing to meet its housing targets passed down by the PCs last year.

“We’re going to have to get money from other levels of government. I hate to say that because I always like to be rather independent,” she admitted. “But when you look at the enormous amounts to get pipes in the ground, and pave roads, and do all the things you have to do to get the area ready for housing to go in, it’s beyond what we can do.”

Dasko said he will call to upper levels of government for a new deal on infrastructure, “one that is equitable and fulfills the demands upon our city for growth.”  Tedjo also said Mississauga needs the federal and provincial governments to step up, stating “The simple reality is that there is a structural imbalance between the expenses municipalities have and revenue sources available to them.” He referenced how a majority of the City’s expenses are primarily funded through taxpayer dollars and through development-related charges, “while other levels of government have many more revenue sources to support them.” Tedjo added while the recent announcements from the upper levels of government will help to address the financial challenges in Mississauga, he will also continue to advocate for “a new partnership that fundamentally addresses the structural fiscal imbalance facing our municipal sector.”

Keeping on trend with previous statements made around the council table, Damerla said the City must continue to advocate and secure funding for its fair share of provincial support “for infrastructure crucial to housing,” which she said must be “central to [Mississauga’s] plan for growth.”

Tavares said implementing other measures in addition to relying on the infrastructure and debt repayment levy, such as securing funds through building more homes, increasing property homes, implementing user fees, and leveraging public-private partnerships, among other tools, could help to address the city’s underfunded infrastructure. 

But promising to lobby to upper levels of government is easier said than done for a municipality that’s historically been deprived of much-needed funding from its government counterparts. The Pointer previously reported that a total of $65.2 million in federal funding was sent to Mississauga over a four-year period to help with around 70 infrastructure projects, according to data from the Investing in Canada Infrastructure Plan website. The figure represents a mere fraction of the per capita infrastructure funding — about $1.5 billion over the four-year period from 2015 to 2019 — Mississauga should have received.

With several financial factors looming over the city and limited funding sources to pull from without pushing the bill onto property taxpayers, Mississauga candidates must engage and advocate to upper levels of government for assistance to pay for things such as housing and transit, along with climate/green investments and public safety. 

“To build complete communities within world-class cities, municipalities require new sources of revenue beyond the property tax. The demands of delivering services to properties, while maintaining existing infrastructure in a state of good repair, and building new amenities, is more than our budgets can bear,” the City’s 2023 pre-budget submission stated. “Cities need the support of federal and provincial partners to not only fund critical infrastructure, but also provide support for our operations.” 

Given each of these pressures facing the city, it will be critical for Mississauga’s next leader to establish a strong relationship and work with upper levels of government to secure the necessary funding for taxpayers.

While recognizing Mississauga has traditionally been under-funded by upper levels of government, Dasko said he will continue to work collaboratively with the provincial and federal government to achieve a new deal for Mississauga, stating that “As the third largest city in the province, Mississauga deserves better.”

Tedjo, who previously highlighted the imbalance between expenses municipalities have and revenue sources that are available to them, said the first aspect of addressing the core challenge of Mississauga’s historic underfunding for major projects, is working with organizations like the Association of Municipalities of Ontario and the Ontario Big City Mayors “to get a fix to this structural problem.”

“We also need to maximize Mississauga’s opportunities to benefit from all federal and provincial funding programs of the day. This requires a Mayor who understands government relations, and how to work effectively with different levels of government to get things done,” he explained. “Some other candidates in this race are known for being combative or making demands of other levels of government. This isn’t how to get things done and it’s not what our City needs.”

Also acknowledging Mississauga has faced challenges in securing critical funding from the Province specifically, Tavares said he will prioritize building strong relationships and improving communication with all levels of government to address the issue. He also promised to work to identify innovative funding solutions, such as public-private partnerships and grants, to supplement traditional government funding sources, adding that “by diversifying our funding streams, we can ensure that Mississauga has the resources it needs to thrive.” 

“With my extensive experience working around the world on complex projects, I have developed the skills and knowledge to navigate government bureaucracy and negotiate successfully for the resources our city needs,” he told The Pointer. “I will leverage these skills to advocate for Mississauga’s interests and secure funding for critical infrastructure, services, and programs.”

Damerla did not detail how she plans to secure funding or a “new deal” for Mississauga, which she has repeatedly called on from the federal and provincial governments.

Parrish, on the other hand, has not been afraid to call out upper levels of government, especially the Province, for funding for Mississauga — something she told The Pointer she will continue to do if elected. Her plan to garner attention from upper levels of government is to gather the mayors of Peel’s three lower-tier municipalities — Brampton, Caledon and Mississauga — and “go marching down to Queen’s Park and jut out our jaws and say we need money.” 

“You just have to go down cap in hand and say ‘okay, this is the problem we’re having. We don’t have enough money to put in the infrastructure that we need to build houses.’”

Another financial challenge facing Mississauga is the recent restructuring of the provincially appointed Transition Board which has now been tasked with easing the transition of passing certain departments — land use planning, water and wastewater, regional roads and waste management — PC Housing Minister Paul Calandra has said are “key to building homes and housing-enabling infrastructure,” onto the backs of Peel’s three lower-tier municipalities. The move, the Premier explained, was made to uphold his vow to make the two-tier governance structure more equitable to regional taxpayers. 

The Province initially established the Board in July last year to facilitate the breakup of the Region but was later reconfigured in January to download only certain services to Peel’s lower-tier municipalities after Ford and Calandra axed dissolution in December, citing reports not made public that showed the Region’s separation would not be the most efficient play for Peel’s taxpayers.

The new mandate of the Transition Board is meant to focus on the building of homes in Peel’s lower-tiers to increase housing supply; reduce duplication and remove layers of bureaucracy from the administration of services; ensure the continuity of services for local residents; and ensure financial sustainability and high- quality services delivered in an efficient manner. 

The City of Mississauga will now be challenged with adapting future budgets and master plans to absorb the Region’s four departments (land use planning, water and wastewater, regional roads and waste management). It’s a daunting feat the City’s next mayor must be prepared to take on, however, it appears none of Mississauga’s mayoral candidates questioned by The Pointer have a clear plan to tackle this task head on.

The Board, now responsible for providing recommendations on the transfer of each of the services currently provided by the Region to the three lower-tier municipalities, was delegated in January to develop next steps and make proposed recommendations by the spring for the Minister to consider, although these recommendations have not been made public yet. 

Each of the candidates questioned by The Pointer pledged to continue to work with the region and Transition Board to determine the best outcome for Mississauga and advocate for fair services in the city, but, in the same breath, also failed to detail how they plan to adapt Mississauga’s budget or master plans to absorb the four departments that are anticipated to flow down to the city.

Until staff at City Hall know what they are dealing with, Dasko said the City is unable to commit taxpayer dollars, but he is a “firm believer that Mississauga deserves a fair and transparent deal.” Tedjo acknowledged that “from a fiscal perspective, it will result in long-term savings in our budget, which is a great success for our city,” but did not outline a strategy for how he would integrate the services into the city’s future planning. Damerla’s response also included no plan other than a promise to continue advocating for the city’s “taxpayers to make sure we are treated fairly.” 

Parrish said she will also have to wait and see what comes out of the Transition Board’s recommendations before laying out a game plan. “I just am very anxious to get the Transition Board out of our municipality [and] get them back down to wherever they came from because they’re sitting there pondering things that the solutions are easy for us to figure out for our people that are running the region and running the municipalities.” 

Tavares said his plan “focuses on thorough cost analysis and clarity.” He is proposing that City Council’s decisions under areas currently overseen by the Region of Peel, “undergo rigorous cost analysis,” an approach he says “ensures accountability and transparency.”

Email: paige.peacock@thepointer.com 

Twitter: @mcpaigepeacock 

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By Paige Peacock, Local Journalism Initiative Reporter

Original Published on Jun 03, 2024 at 13:53

This item reprinted with permission from   The Pointer   Mississauga, Ontario
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