Finance Committee on Oct. 10th, 2023

[Donald Killorn]

My pleasure. Thank you.

[The Chair, Liberal, Peter Fonseca]

You'll have an opportunity to expand on that when we get into questions from members.

Now we will go to the Town of Stratford. We have Mayor Steve Ogden with us.

[Steve Ogden, Mayor, Town of Stratford]

Thank you very much.

I want to thank this committee for giving me the opportunity to bring municipal concerns to your attention. There are lots of them. I'll try to hit the biggest ones first.

I represent Stratford, a town of about 12,000 people. We've experienced incredible growth over the past 20 years or so. In the 2011 census we grew 23%. In 2016 we grew 13%. In the last census we grew 12.5%. We're projected to double in size in the next 10 to 15 years. There's a lot of activity in Stratford, with a need for new infrastructure.

We have been very successful, I guess, in obtaining some infrastructure funding, but we do have some issues with the infrastructure funding. One of the main issues is the way in which the process works. We get approved for the funding and then we go out and do the work. We keep the invoices and we send those in after the fact, when we get the work done.

I heard one of your witnesses earlier from the construction association talk about the difficulty in getting work done. It takes a long time, sometimes up to two years, and as you know, during that time frame inflation takes hold. We need to have credible estimates done before the funding is approved. It always results, especially as it has over the last couple of years, in the funding not being adequate to cover the actual costs. We're suggesting an indexation rate of about 3.5% or, failing that, some percentage, or even the rate of inflation, for the infrastructure funding to cover that time lag between the time the funding is approved, the work is done, the invoices are submitted and the bill is paid. We have to do bridge financing and borrow money as municipalities. It's very difficult.

It's not only our municipality. I'm the vice-chair of the finance committee of the Federation of Canadian Municipalities and on the executive of the Federation of P.E.I. Municipalities, and it's a common problem with all municipalities. We really need to see that addressed, especially in these periods of high inflation.

During a period of growth like this, we have incredible needs for infrastructure. Some of the models that work really well use what we call the “gas tax” model, where the federal money is provided directly to the municipality. That works really well, because we're able to allocate it to our priorities. It works very well. The difficulty with things like the investing in Canada program is that it goes through a couple of filters. It goes through a provincial filter, and it goes through some other bureaucratic filters at the federal public servant level. That sometimes leads to their priorities not being our priorities, or to us not getting the funding we need in order to do the work that's really required.

If future funding programs could follow the gas tax model, as we call it, that would be great. It would be better for the federal government, because we like to work in partnership with the provincial government and the federal government. It would give an opportunity to actually put your money in and see your results. We don't mind tying any funding to results.

One of the issues with that approach, of course, is giving recognition to the federal government for providing that funding. We're prepared to do that. Maybe there could be some way of doing that so that residents know that this is funding that's being provided by the federal government. We'd be happy to do that. It just needs to be looked at really closely.

One of the other issues that we're dealing with, as was noted by my colleague, is the voyage to net zero. We've set a target. We've done a lot of activity with regard to environmental sustainability and climate resilience, but we really need to be able to get the funding we need in order to do the work that's required. Sometimes the program is delivered in such a way that the requirements are met but the funding is not provided. I'm not sure what the reason is.

For example, on one of our latest applications, the application was for some funding to support an environmental sustainability initiative. We're considering building a net-zero, multi-purpose recreational facility, and we followed the rules that were set in the application process. However, the funding was not approved on the basis of the fact that a study is needed to indicate exactly how it is to be done. We don't mind doing that. It's just not clear up front. There is a bit of bureaucratic confusion, I guess, not only in our municipality but in a lot of municipalities.

One of the biggest issues we're dealing with—and I know you are dealing with this as a whole, and we're dealing with it as a country—is the housing challenge, especially in the area of affordable housing. We've taken a couple of initiatives. We have gotten some federal funding for an initiative we call “Shape Stratford”, which is basically designing a template that could be used by all municipalities in Canada to look at how we can remove the barriers to changing rules around housing developments.

Part of the beauty and the attraction of what we're doing is the fact that we're trying to look at things through the eyes of residents who are now against housing initiatives and trying to address their concerns, because that's really at the crux of it.

I'm sorry. I'm—

[The Chair, Liberal, Peter Fonseca]

No. I'll just say thank you, Mayor Ogden. I want to hear more, but that's the time for your opening statement and your testimony.

For all witnesses, you'll be able to expand on that at this time, because we're going to get into questions from the members. Each party will have up to six minutes to ask questions of the witnesses.

We're starting with MP Duncan for six minutes.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you, Mr. Chair.

Thank you to our witnesses.

I will do the introduction again. I'm Eric Duncan, member of Parliament from eastern Ontario. I'm from the Conservative Party.

I'm a former mayor, so Mr. Mayor, I'm going to have a bonding moment with you and ask a few questions going back to my municipal days.

You spoke at the end about housing and the challenges there in terms of its being national in nature, but one of the things I've been speaking about is the lack of responsiveness and timeliness to actually getting shovels in the ground and, more importantly, keys in doors and families living in homes. You elaborated that you got some housing funding to look at a study of ways to make it easier, but I'm going to reference the housing accelerator fund that was announced two years ago.

Are there any new doors with keys turned and families from Stratford in this housing accelerator fund to build more homes in Stratford?

[Steve Ogden]

We've put in an application for that funding, and we've had quite an ambitious plan to meet the requirements of that. We're leveraging our Shape Stratford initiative, which is, as I said, the template for how we can address some of the concerns or some of the obstacles to putting housing in. We've come up with a number of building up rather than out.... We're trying to reduce urban sprawl and trying to leverage some of the environmental sustainability funding for that.

Yes, we have put an application in. We haven't yet received the funding—

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

There's been no response. The point I try to raise is that here we are, two years after an announcement, and there is an application process from which you still haven't even heard back and a shovel that has not gone in the ground. Here we are in the fall, and it likely wouldn't even be until next year at this point, after the funding has been announced.... I'd say the turnaround time to actually get projects would probably be a huge concern.

The witnesses before talked about inflation, but construction inflation. Can you talk about the impact of that on your municipal budget?

We have the national inflation number that takes in a wide variety of costs, but costs for municipalities, public works projects and so forth, would you talk about the impact of...? You probably weren't at the presentation before, but it was about a 30% increase.

What numbers are you seeing in terms of having to stretch dollars even further? Are you cutting projects you're supposed to do or raising municipal taxes? What kind of situation are you in?

[Steve Ogden]

We have an operating budget of less than $10 million for a population, as I said, of about 12,000 people, and incredible infrastructure needs. We look at getting the applications in and getting the funding approved. Then once the construction is under way, the contracts are let and everything like that, the bids often come in much higher. Either we don't proceed with the project, or we have to borrow money.

Our tax rate's already.... People move here from other centres. They move to Stratford and they expect the same programs, services and infrastructure that they received in places like Mississauga, and the tax rates aren't that different. They're pretty close to the taxes they paid back where they came from. It ends up not being possible.

Go ahead. I'm sorry.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

No, I'm just trying get in as much as I can in a round.

Canada Mortgage and Housing Corporation, or CMHC, is a favourite punching bag these days, I think, on their customer service standard and their ability to get applications out the door. You mentioned before about putting in an application, and then the goalposts change or you have to do a study and so forth.

Do you have any feedback on CMHC as a federal organization in terms of what they can do better and how they can be more accountable to the requests that you're making to get more affordable housing in Stratford?

[Steve Ogden]

I'd love to have CMHC, the provincial government and the municipalities around the table to discuss exactly that.

We have a really successful model with regard to affordable seniors housing with CMHC. Twenty-five years ago, they put a facility, with capital funding from CMHC, in Stratford. The rent is based on 30% of a senior's income. It's very successful. The operating costs are not that great. It ends up being quite affordable. I sign the cheques every month. It's not really a lot of money, relatively speaking, but it's a very successful model. I would suggest that if we could get the right people around the table, we could come up with....

For example, the affordable housing approach they put in place doesn't work. At the end of the day, it doesn't provide enough funding for developers so that they can make money, but then if they do go through it, you or I could rent those apartments. It's not based on any screening process for need or whatever.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

I think this will probably be my last one for the time that we have.

You mentioned that the project would be about 25 years old through CMHC. Are there more recent examples? As the demand has been booming in the last couple of years and we're in a housing crisis, have any applications been approved, or are you still sitting and waiting for responses when it comes to that through any other CMHC program? Are there any in the ground that have been funded by CMHC more recently ?

[Steve Ogden]

We met with the provincial government. We suggested that we get around the table with CMHC to discuss exactly that and come back with an agreement on a process that would work based on the successful model that we have. I believe if you invest in success, you end up with a good product.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Duncan.

Now we'll go to MP Morrissey for six minutes.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you, Mr. Chair.

My first question is for Ms. Muzika on the Canadian mental health initiative, which only recently has had a growing spotlight on it.

In the past, it was an issue that was really swept under the rug, if I can use that term. Am I correct on that?

[Shelley Muzika]

Yes.

[Bobby Morrissey, Liberal, Egmont, PE]

People did not want to address it.

I'm curious. Could you could give the committee a bit of an overview on this? A couple of years ago, the Government of Canada signed an agreement with the Government of P.E.I. targeted towards expanding services in mental health. It's probably a couple of years old. Are you familiar with that initiative of $35 million to P.E.I.'s government?

[Shelley Muzika]

Yes, I'm familiar with it. In terms of the direct impact here for us, I can say that in the budget for 2021-22, we actually received some additional funding for expanding our core services. We were able to add peer support in our core funding. We were able to expand the existing supports that we provide for housing for our clients and also to expand our reach into Kings County. We did receive some additional dollars there.

We also received some additional funding to provide some wage gap dollars. Labour shortages have been an issue. I think—

[Bobby Morrissey, Liberal, Egmont, PE]

Is that in providing services to your clientele?

[Shelley Muzika]

No, it's for our own staff in terms of recruitment and retention. Our staff was significantly under-resourced in comparison with the staff providing some similar services in the province.

[Bobby Morrissey, Liberal, Egmont, PE]

Recently, a few months ago, the Government of Canada signed an agreement with the Government of P.E.I. on additional health care funding. The Government of P.E.I. outlined to the Government of Canada, or put forward their priorities and the price tag, and said, “Okay, based on this funding, if we have it stable over 10 years, then we will address these issues in health care.”

Do you know if there was specific reference to expanding mental health services in P.E.I. as part of that request, going forward?

[Shelley Muzika]

I can't speak to that exactly. I know that our current contract takes us to the end of March 2025, so if there were additional....

That was from—

[Bobby Morrissey, Liberal, Egmont, PE]

It was from the $35 million.

[Shelley Muzika]

Yes, exactly. Thank you.

[Bobby Morrissey, Liberal, Egmont, PE]

Okay. I'm curious, because we hear more about it—and rightly so—now that we recognize it more and more as a health issue. It should be dealt with within the health envelope. It's no different from any other illness that affects individuals.

[Shelley Muzika]

I can speak to the fact that the Department of Health now has a dedicated mental health and addictions deputy minister and area. That's another area—