ANALYSIS: What are the implications of 'Mississ-exit' for Peel Region?

Mississauga seeks independence from Region of Peel, leaving Brampton and Caledon with uncertainty

Yorkregion.com
April 8, 2019
Ali Raza

The Ontario government announced Jan. 15 that it would conduct a review of regional governments across the province, and that has landed Peel Region - among others - in the cross hairs of some political forces that would like to see this level of government erased.

Since that announcement, Peel Region’s cities of Brampton and Mississauga, and the Town of Caledon, have considered the possibilities of what a regional governance review might bring. Mississauga has welcomed the review as an open door to finally exit the Region of Peel alliance.

Mississauga city council made it clear at a general committee meeting on March 20 that it wanted to leave and become a single-tier municipality, wholly responsible for all of its operations and services. It passed a motion in principle formally requesting the provincial government grant independence to Mississauga.

Indeed, when the province made the initial announcement in January, Mississauga Mayor Bonnie Crombie made the city’s intentions crystal clear.

“It’s time to re-evaluate Mississauga’s relationship with the Region of Peel and whether or not it makes financial sense for our city,” the mayor said.

Does it make financial sense? What happens if Mississauga leaves the Region of Peel?

“The long-standing submission that for most of the life of the regional government it [Mississauga] has paid a disproportionate share of the costs, and had a disproportionate low share of the representation is largely true,” Cape Breton University’s Associate Professor of Political Science and Mississauga historian Tom Urbaniak said.

The City of Mississauga represents 52 per cent of the population and contributes 60 per cent of the funding. Representation on the regional council is skewed, giving councillors from Caledon “four times as much of the vote of a Mississauga councillor,” the executive summary of a report on independence prepared by Crombie’s office has noted.

A “Mississ-exit” would imply significant changes to the shared web of taxes, services, and governance that currently exists between the Region of Peel and its lower-tier municipalities. The decision ultimately lies with the provincial government, and the review being conducted by the Ministry of Municipal Affairs and Housing under Steve Clark. Former Metrolinx CEO Michael Fenn and former Waterloo Region chair Ken Seiling were appointed to conduct the review.

“The special advisors, appointed by the government, are gathering input from numerous elected and appointed municipal officials and municipal stakeholders,” Ministry spokesperson Praveen Senthinathan said.

In-person consultations are scheduled across the province, including May 8 from 9 a.m. to 4 p.m. at Peel Regional Council Chambers, 10 Peel Centre Dr., in Brampton. Anyone interested in making a deputation must register by April 9.

Fenn and Seiling will present their findings and provide advice to Clark in the summer, according to the Ministry.

In an attempt to understand the numbers, the City of Mississauga prepared a staff report on March 20 on regional government review assessing three possibilities: amalgamation, regional reform, or independence. It was clear in the report that staff strongly suggested council endorse Mississauga independence.

Of more significance is the Day & Day Report, a financial report commissioned by the city in 2003 exploring property tax implications under single-tier status. City staff updated that report from 16 years ago and concluded that “Mississauga residents cross subsidize Brampton and Caledon up to an estimated $85 million a year.”

A separate report, commissioned earlier this year by the Region of Peel shows the financial implications of the three possibilities: amalgamation of Peel's three municipalities into one large city, dissolution (Mississ-exit), or efficiencies (regional reform).

“The Deloitte report was not commissioned at the request of Council, and is not a Regional position,” the Region’s website reads where the report is linked.

The findings in the Deloitte report showed that if the Region of Peel were to dissolve, it would cost $1.081 billion in additional tax levies over the next 10 years. If the three municipalities of Brampton, Mississauga, and Caledon amalgamate to form the City of Peel, it would cost $676 million in additional tax levies over the next 10 years. If the Region of Peel remained the same but underwent identified efficiencies, the report said it would generate tax savings of $261 million over the next 10 years.

But the details of that report don’t specify who among the three municipalities would pay the $1-billion bill if the Region dissolved. The report did indicate that “Mississauga benefits the most from dissolution, especially as it sees positive trends in financial metrics.”

So it would seem Mississauga could afford to leave the Region, but its exit would leave Brampton and Caledon in debt.

The report explained that dissolution for Mississauga would result in an increase of operating balance to operating revenue by 6.7 per cent, an increase of total balance to total revenue by 10.1 per cent, and an increase of $2.4 million for the city’s net assets.

In contrast, Brampton would be “most impacted upon dissolution” with its debt to operating revenue increasing by 27.9 per cent. Caledon’s debt to operating revenue would increase by 23.9 per cent.

While dissolution may be more costly than the status quo, it appears that Brampton and Caledon will bear the brunt of those costs, according to the Deloitte report.

“This is incredibly complex,” Urbaniak said. “There is no report that is going to give us absolutely definitive authoritative numbers of the financial implications of any reconfiguration.”

Despite the differing assumptions and numbers, Urbaniak, the Deloitte report, and Mississauga city council are in agreement that amalgamation - creating the City of Peel - would be costly.

“Creating the city of Peel would be a very, very ill-advised move, and extremely unpopular with residents,” Urbaniak said.

“Our biggest threat is the amalgamation of Mississauga, Brampton, and Caledon,” Coun. Pat Saito said at a council meeting on April 3.

From initial reports looking at the prospect of Mississauga leaving Peel Region, an independent Mississauga could be financially detrimental to longtime municipal partners Brampton and Caledon.