News Release: April 10, 2019
Region of Peel Partners with the Mowat Centre to Study the Changing Nature of Employment
Brampton, ON. (Apr. 10, 2019) – The Region of Peel has partnered with The Mowat Centre to conduct a socio-economic research study to better understand how the changing nature of employment is impacting municipalities, and risks to financial sustainability.
The study, titled Rethinking Municipal Finance for the New Economy (PDF), suggests that sweeping modernization to revenue generation is needed in order for municipalities to meet future spending obligations.
“Peel continues to be one of Canada’s fastest growing municipalities. As the economy and labour market evolve, we are proactively thinking on how municipal governments maintain fiscal capacity and flexibility by modernizing approaches to revenue generation,” said Stephen VanOfwegen, Chief Financial Officer and Commissioner of Finance. “Our goal is to ensure fiscal sustainability and property tax affordability of the services delivered to our residents. To that end, municipalities require a fair share of Canada’s economic growth and prosperity.”
Like the rest of Ontario and Canada, Peel Region’s economy is in transition:
- There has been a shift from goods production to goods movement, and many manufacturing plants have been replaced by warehouses and distribution centres.
- E-commerce has reduced demand for retail spaces.
- The service sector continues to expand, with emphasis on knowledge-based jobs.
- Workplaces are shrinking, and the average square footage per employee has declined significantly.
- At the same time, mobile work options such as telecommuting and hot-desking are becoming increasingly popular.
These trends are likely to further strain municipal revenues due to several factors:
- Municipal revenue tools are inordinately reliant on land-based approaches to value that are becoming less relevant in the digital era.
- In Peel, the share of revenue from industrial property is on a downward trend, in large part due to the decline of the manufacturing sector. Growth in employment land consumption has also slowed.
- Further, provincial growth forecasts have not been reflective of the actual pace of development, which has led to a shortfall in expected development charge revenue.
- Reliance on the residential property-tax base has been increasing, as non-residential property-tax revenue as a proportion of total tax-revenues declines.
If these trends continue, property taxes will become increasingly unaffordable for residents in the years ahead.
The report was presented to Regional Council on March 28 and was adopted in resolution. Findings of the report will also be shared with the Association of Municipalities of Ontario (AMO) and the Federation of Canadian Municipalities (FCM) as they are relevant for all Canadian municipalities in the broader context. This will inform a long-term education and advocacy strategy with both the federal and provincial governments.
Region of Peel
905-791-7800, ext. 4672
The Region of Peel works with residents and partners to create a healthy, safe and connected Community for Life for approximately 1.5 million people and over 175,000 businesses in the cities of Brampton and Mississauga and the Town of Caledon. Peel's services touch the lives of residents every day. For more information about the Region of Peel, explore peelregion.ca and follow us on Twitter @regionofpeel and Instagram @peelregion.ca.