2015 Federal Pre-Budget Submission. The Honourable Joe Oliver Minister of Finance

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1 2015 Federal Pre-Budget Submission The Honourable Joe Oliver Minister of Finance 2015

2 Introduction As one of Canada s largest and most diverse communities, the Region of Peel is an important hub of economic activity. Peel is home to 1.4 million residents and over 106,000 businesses, which is approximately 10% of all businesses in Ontario. In addition, $1.5 billion worth of goods are moved daily through Peel, which also has the densest network of 400 series highways, Toronto Pearson International Airport and Canada s two major railroads. Despite having shown some resilience, the effects of the economic downturn in 2008 continue to be felt, particularly in the manufacturing sector where employment levels are diminishing. Peel s unemployment rate remains high at 8.2% and it s youth unemployment rate even more so at 17.6%. To meet Peel s challenges and reach its full potential, all three levels of government must continue to work together to develop solutions that will lead to greater prosperity and an improved quality of life for all residents. The Region s pre-budget submission focuses on three key areas: 1) Long-Term Infrastructure Investments a. Transportation Infrastructure b. Water and Wastewater Infrastructure c. Goods Movement 2) Affordable Housing 3) Immigration The Region of Peel looks forward to supporting the federal government s efforts to build on the progress that has been already been achieved. 2

3 Transportation Infrastructure Long-Term Infrastructure Investments Many municipalities, including the Region of Peel, face significant infrastructure challenges as a result of a high population growth rate and aging infrastructure. Peel s infrastructure deficit continues to grow at a rate which is higher than the Region s ability to afford through property taxes, the utility rate and development charges. As of 2015, Peel Region s shortfall in addressing infrastructure needs is approximately $55 million. This includes funding for infrastructure such as roads and bridges required to address gridlock facing our communities. A Toronto Dominion Economics report (2013) identified gridlock in the Greater Toronto and Hamilton Area (GTHA) as a key barrier to sustained economic growth. Gridlock is estimated to cost the GTHA $6 billion in lost productivity annually and projected to rise to $15 billion by To help address gridlock, Peel has shifted its planning strategies to focus on the long term sustainability of critical infrastructure. For example, Peel s Transportation Asset Management Strategy (TAMS) was developed in 2013 and is being used to support capital budget process and maintenance programs to help ensure transportation assets are cost effectively maintained in a state of good repair. However, in order to truly address the infrastructure challenges, it is essential for all orders of government to commit to making strategic long-term contributions in building and rebuilding a solid infrastructure foundation. The Region of Peel appreciates the efforts made by the federal government to support municipalities infrastructure needs, including making the Gas Tax Fund (GTF), a permanent annual investment of $2 billion beyond The Region also welcomes the New Building Canada Plan, which includes $53-billion for provincial, territorial and municipal infrastructure over the next 10 years. While encouraged with the release and implementation of the New Building Canada Plan, the Region would like to see greater predictability in the allocation of funds. A predictable, longterm funding stream would be beneficial to large urban municipalities as they develop long-term infrastructure and asset management plans spanning over the next 20 to 30 years. Examine and explore dedicated funding streams for transportation infrastructure when developing the Long-Term Infrastructure Plan 3

4 Water & Wastewater Infrastructure The Region relies heavily on water and wastewater infrastructure as these systems are critical for the economic viability and efficiency of residents and businesses. While the Region s water and wastewater infrastructure is currently well maintained, the cost of building, upgrading or repairing water treatment facilities is quickly moving beyond the Region s ability to pay with limited revenue tools. For example, the 2015 Region of Peel Budget indicates that a 3.5 per cent rate increase or $9.9 million is needed to close the unfunded gap based on the current ten year water and wastewater capital plan. The federal government can begin to address this concern by creating a long-term, predictable and sustainable infrastructure fund that targets small urban communities with a need to improve their water treatment facilities. As has been the history with the municipal sector, Peel would expect to cost share this fund up to 50 per cent. There is a significant need for greater cooperation amongst the three orders of government to bring solutions forward to address long-term issues in the areas of water, wastewater and waste infrastructure. Create a specific infrastructure fund that targets small urban communities with a need to improve their water treatment facilities Take a leading role in increasing the level of coordination and financial commitment, from both the federal and provincial orders of government to fund water, wastewater and waste infrastructure projects Goods Movement The Region of Peel is one of Canada s primary freight hubs: Approximately $1.5 billion worth of goods move through Peel every day Manufacturing, wholesale trade, and transportation and warehousing account for nearly 30 per cent of Peel's employment Peel accounts for 15 per cent of Ontario's exports There are approximately 2,000 trucking companies in Peel Truck activity in Peel represents about 25 percent of all truck activity in Ontario Toronto Pearson International Airport processes over 45% of Canada s air cargo The CN Brampton and CP Vaughan intermodal terminals are two of the largest in Canada Traffic congestion and travel delays have been identified as major challenges by the goods movement industry o The cost of congestion in Peel Region is $845 million per year 4

5 The movement of people, goods and services across the region and province, however, is severely impacted by gridlock on roads and highways making the Greater Toronto Hamilton Area (GTHA) one of the most congested metropolitan areas in North America. The escalating congestion is detrimental to the Region, Ontario and Canada s overall well-being since goods movement and manufacturing are critical elements to Peel s economy. The Region believes that all orders of government, in collaboration with private sectors, must actively participate and be engaged to improve the overall intermodal transportation system leading to the development of a provincial goods movement action plan. The Peel s Goods Movement Taskforce, established in 2009, involves both the public and private sectors to help address the issue of congestion and goods movement across one of North America s largest transportation hubs. Key participants on the Taskforce that have contributed significantly are staff from the Ministry of Transportation, Metrolinx and Transport Canada. The Taskforce is in the process of implementing 23 action items over the next five years in order to move goods more efficiently, manage congestion and mitigate the effects on health and the environment in Peel. Twenty-two of the action items are either complete or are actively underway. Continue to work with the provincial government to develop a long-term strategy to improve the movement of goods throughout the GTHA 5

6 Affordable Housing Affordable housing continues to be a major concern in Peel. Although there has been a slight decrease in the average wait time for housing subsidy, families can still be waiting, on average, between five to seven years for housing. A high number of applications for housing subsidy continue to be received and there are still over 12,000 households on the centralized waitlist. The elimination of federal subsidy for affordable housing units poses a threat to long-term financial sustainability. In 2013, 14 per cent ($21 million) of the Region s funding for housing programs came from the federal government. This amount will be reduced to zero in less than 20 years as operating agreements expire. Notwithstanding the loss of federal subsidy, the Region is required, by legislation, to meet service level standards and must fund subsidized units. In addition, Peel s social housing stock is aging and it is estimated that by 2024, the capital shortfall for housing will reach $104 million. The Region is pleased with the continued commitment from the federal and provincial governments to the Investing in Affordable Housing (IAH) program. The Region s 10-year capital plan includes $121.8 million to build 700 affordable housing units. While IAH funding provides certainty over the near term, municipalities remain concerned about funding sustainability over the long-term. Investing in affordable housing construction not only meets a social need, but stimulates economic growth and employment. The construction of each new housing unit is estimated to generate 2.5 full-time jobs. By this measure, the 769 new affordable housing units built in Peel between 2011 and 2013 are estimated to have created close to 2,000 jobs. Lead a national, long-term housing strategy including an immediate infusion of federal money into high-growth areas of the country that are in the most need of affordable housing Provide ongoing capital and operational funding the flexibility to apply it to the building of new affordable housing and repair of existing housing stock Continue to provide funding for social housing once the operating agreements expire to allow the municipalities to continue to achieve its service level standards Encourage private sector investment in rental housing through: o Changes in the tax system (accelerating capital cost allowance, reduction in capital gains tax, soft cost deductibility) o Tax incentives (e.g. HST rebate on new construction, a low income housing tax credit program) 6

7 Immigration Immigration is a critical component of Canada s economy. The Region, in particular, benefits from the knowledge, skills and resources that immigrants bring with them as many choose Peel as their place of residence. In 2011, Peel had the largest proportion of immigrants in the Greater Toronto Area (GTA) at over 50 per cent. At that time, Peel also had over 100 thousand recent immigrants and was home to almost a quarter of the GTA s total immigrant population. Most come hoping to find good paying jobs that match their qualifications. Unfortunately, many recent immigrants experience high rates of poverty, unemployment and underemployment despite high levels of education. The 2011 Poverty and Employment Precarity in Southern Ontario study found that almost 50 per cent of newcomers are likely to be precariously employed in their first year compared to 25 per cent of non-immigrants. In fact, it is only after 10 years in Canada that immigrants are as likely as workers born in Canada to be in permanent, full-time employment with benefits. Declining federal funding for immigration settlement services in Ontario could affect the ability of high immigrant regions like Peel to properly integrate newcomers. In Peel, federal settlement spending has dropped significantly from a high of $74.5 million in to $47.7 million in , a decrease of 36%. While we understand this reduced funding is tied to the decline in Ontario s share of direct immigration, Peel experiences proportionately higher immigration growth due to secondary migration. With the support of the federal government, the Region of Peel, in partnership with the community, has successfully implemented a number of initiatives to integrate newcomers. Through the Region s immigration website, ImmigrationPeel.ca, and the Peel Newcomer Strategy Group (PNSG), Peel s local immigration partnership, Peel has been able to better prepare and connect newcomers to the labour market. We are hopeful that the recent launch of the Express Entry program will help meet Canada s economic objectives and improve outcomes for skilled immigrants. While this program provides the advantage of allowing provinces and employers to play an active role in the recruitment of skilled immigrants, localities will need enhanced capacity to analyze labour markets. The federal government s support in this area would be much appreciated. Provide continued support for Local Immigration Partnerships, like PNSG, and the implementation of local immigration plans to ensure integrated community planning and delivery of services Provide adequate immigration settlement funding levels to meet current and future needs, including sustainable funding for the creation and enhancement of municipal immigration websites Continue to recognize municipalities as partners in immigration planning and policy and program development, including the capacity to identify needs and provide input into the allocation of funds for immigrant settlement and integration 7

8 Conclusion The Region of Peel continues to be an active and willing partner to help the federal government achieve its short-term goals of creating jobs, protecting and improving services and its long-term objectives of economic growth, prosperity and deficit reduction. As such, we encourage your government to consider and adopt the policy recommendations outlined in this pre-budget submission as they serve to strengthen municipalities and their communities across Canada. Thank you for the opportunity to provide input into the 2015 Budget. We look forward to working with you to create a strong, competitive and prosperous country. 8

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