Daily BrewOntario cuts back on payouts to Toronto, green energy plan
Big news out of Ontario's Queen's Park. It seems the Liberal government has decided money doesn't grow on trees.
Premier Kathleen Wynne's team made two moves to cut costs this week and, in the process, pulled Toronto's hand fractionally out the cookie jar amid tension between the two governments.
In a letter to the city, the province announced that it would cut almost $150 million in annual funding by phasing "pooling compensation" out over the next three years.
The compensation program was established in 1998, when the cost of social programs was shifted to municipalities. Finance Minister Charles Sousa reiterated that financial support from the province offsets the loss of the fund, which was intended to wrap up last year.
"As a result of increased support from the province, as well as other initiatives, such as the City of Toronto Act, the city has the tools it requires to operate as an accountable government," reads the letter, obtained by the Toronto Star.
"The strong partnership between our governments has helped the city put itself on a financially sustainable footing – as is evidenced by the fact that the city has reported operating surpluses in recent years."
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Other key funding programs will continue, including gas tax revenue, an ambulance cost-sharing plan, money to cover public health costs, $10 billion in infrastructure funding, Ontario Works benefits, drug benefits, and the list goes on.
Sousa wrote that, "Eliminating the deficit is a very important step so the province can grow the economy."
If anyone can understand that, it is Toronto Mayor Rob Ford. Ford has continually underlined the need to find ways to cut the bottom line and boasts success at doing it on a municipal level.
"It's a discussion, it's a negotiation. They have realities to deal with and so do we," Earl Provost, Ford's chief of staff, told the Toronto Sun.
The letter was sent on Thursday, the same day the province announced it would hack $3.7 billion off of a green energy project. The savings come from a massive deal to buy electricity from wind and solar projects being developed by Samsung Renewable Energy in Ontario.
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The original 2010 plan was worth $9.7 billion, but Energy Minister Bob Chiarelli says the deal has been renegotiated after Samsung missed deadlines.
“One of my top priorities has been to look for ways to bend the cost curve [down] for ratepayers,” Chiarelli said, via the Globe and Mail.
“This was the single most significant step our province could take to do just that.”
The National Post's Kelly McParland calls the green-energy clawback just another mess that Wynne inherited from the former premier.
Dalton McGuinty loved windmills. He signed on wholesale to the idea that wind provides free energy, and that by harnessing it Ontario could save big bucks, save the planet and generate a prime place for itself among global do-gooders. It’s been a disaster.
The timing of these two reductions may be coincidental, but they do come following the passage of the provincial budget and as their Conservative opposition hammers them over misspending and government waste.
Perhaps it is part of a plan to clean up simmer messes, and clear the province’s books at the same time. Still plenty of work to do, though.
