In January of this year, Mayor Andrew Hallikas, Interim CAO Travis Rob and Coun. John McTaggart attended the Rural Ontario Municipal Association Conference 2024, during the conference they had the opportunity to make delegations to four different provincial government departments.
Their first delegation was with the Solicitor General they met with Michael Kerzner regarding the cost of OPP services in the Town of Fort Frances.
“Our issue with OPP pricing was that we pay the second highest per household cost in the province of Ontario, second only to Kenora,” Hallikas said. “If you look at the Rainy River District we are the highest cost per household, per district by far. In fact the provincial average for per household cost of OPP in 2023 was about $350 per household, and for 2024 we’re forecasting that our bill for the OPP will be $657 per household, so almost double the provincial average.”
It was announced in February that Kenora will be given an approximately 15 per cent discount on its OPP bill from the office of the Solicitor General, a savings over $1 million.
In preparation for the conversation with Kerzner, town officials made a comparison with comparable municipalities, Hallikas says.
“We looked at 21 municipalities that were around the same size as us and we were, again, the second highest in terms of cost per household, second only to Kenora,” Hallikas said. “In that grouping we were about the 10th largest (population) so it’s not (proportional).”
Hallikas says Kerzner assigned one of his staffers to get in touch with Town staff and discuss why local costs are so high.
“We did have a good meeting with the Solicitor General and he had done his homework,” Hallikas said. “He was familiar with our case. One of the things he did was assign one of his employees to contact our CAO and explain to him why our costs were so high…The Solicitor General was well-briefed and we felt pretty good about that.”
There is also new legislation coming through known as the Community Safety and Policing Act which may also affect the cost of policing in town as well.
The second delegation was with the Minister of Economic Development, Job Creation and Trade, Vic Fideli. Their goal in meeting with the minister, Hallikas says, was to discuss setting up what’s known as a tax incentive zone.
“We wanted to talk to him about the possibility of developing something called a tax incentive zone. The point we were making was we lost our industry, we lost the mill, but there’s still a lot here that attracts industry,” Hallikas said. In the presentation, I went into that in depth and we said, in spite of (losing the mill), it’s not just us, it’s other small rural northern communities. We’re still having trouble attracting businesses and industries. So we need to think outside the box and need to be innovative. So we were proposing the development of a tax incentive zone in partnership with the municipal financial incentive program that the province puts out, so this would be a pilot tax incentive for setting up an industrial and commercial zone project in Fort Frances. It would be like a municipal provincial partnership. It could, if it worked here, it could set the tone for economic growth, not just in Fort Frances, but for northwestern Ontario.”
In an effort to attract industry, the town would need legislative permission to offer tax relief to industrial businesses. They would like to offer relief in the form of eliminating employee health tax for 10 years, or phasing in education taxes for new industrial buildings for the same time frame. They also suggested a reduction in the Ontario corporate tax of a certain amount for a certain term. Hallikas says they suggested a 50 per cent reduction for 10 years. He said the idea was intriguing to Fideli who had similar ambitions during his time as a mayor in the north.
“It was interesting because Minister Fideli had wanted to set up a similar tax incentive zone in North Bay when he was mayor there,” Hallikas said. “ So he was quite interested but he did suggest that we’d be better off doing this presentation with the Minister of Finance.”
Hallikas says they have done similar presentations to the Minister of Finance in the past regarding the tax incentive zone.
Their other two delegations were with employees from the finance ministry but not regarding the tax incentive zone. Hallikas says they have written to the Finance Ministry about the tax incentive zone and are hoping to hear more soon.
Rather than meeting directly with Minister of Finance Peter Bethlenfalvy they met with his Parliamentary Assistant Rick Byers. One of the topics of discussion with the finance ministry was regarding railway taxation.
Hallikas says this was not the first time that town representatives have met with government officials regarding this topic, Hallikas feels the municipality is getting the short end of the stick when it comes to the business CN rail pulls through town.
“We just keep hammering away,” Hallikas said. “It’s not really a form of taxation, they’re paying in lieu of taxation, so much per acre and it’s a pittance. The point we made with them is we’re getting more and more rail traffic. The Ranier Bridge is the busiest railway crossing in North America and they’re looking to replace that and potentially expand it so we’re getting more traffic and longer trains going through.”
Hallikas says the higher the traffic gets the more dangerous it could become for the municipality and the Town views the payments it things CN should pay like insurance premiums.
“We look at it from a risk point of view,” Hallikas said. “It’s just like car insurance, if you have an accident your insurance premiums go up. We’ve had rail accidents, we’ve had a significant one in Emo, we’ve had minor ones right in Fort Frances, and as risk increases your premium should increase. So we’ve been advocating for years now for a tonnage [rate]. The more trains go by and the more cargo they carry the more they should be paying.”
Hallikas says they feel the town is owed more because being prepared for the potential disaster that could happen if a train were to derail costs the town a lot of money as well.
“They should pay for increased risk because it’s costing us more money,” he said. “With our Emergency Management Group our emergency people practice for railway accidents more than anything else and that costs us money. So the risk is being borne by the municipality, is costing the municipality money and CN needs to pay their fair share. We’re not going to give up on that one.”
Hallikas says this wouldn’t be the first place to have a tonnage model for rail access through communities, it’s the model in use in the prairie provinces, according to Hallikas and he believes it is what Ontario needs to adopt as well.
In their final delegation with the Ministry of Finance the Fort Frances group addressed the Ontario Municipal Partnership Fund (OMPF), which is a grant paid to many communities in the province to relieve some operating costs. Hallikas says the province has not kept up with the rate of inflation to support services which the government downloaded onto the municipality.
“Years ago, the province downloaded a number of services, that they provided and funded 100 per cent, to the municipalities with the promise that they were going to provide this funding to cover those costs,” Hallikas said. “And that the funding would keep pace with inflation and there’d be no net costs to the municipality. Well, that hasn’t happened. In fact, our funding has decreased over the years. We’re in a terrible budget situation because of it. Cost of living has increased. Everything is going up. It’s becoming very difficult now to make a balanced budget and we have to have a balanced budget by law.”
The case the group wanted to make to the province was that they needed the government to uphold its end of the bargain and increase the OMPF grant to fit with inflation.
“They need to make sure that the OMPF actually does what it was intended to do, which was fund the full cost of the services,” Hallikas said. “Because what’s happening now in our case is because over the years, with a great increase in cost of living we’re having to make up that cost with taxpayer dollars.”
Hallikas says that he believes the Fort Frances delegation was well received and they are looking forward to seeing results, with plans of persisting if they don’t.
“I do have to say that all of them we felt went quite well,” he said. “We were graciously received, we were listened to, we had time for a good discussion. Now we see if anything comes out of it. And if it doesn’t of course, we’ll just keep going back.”
