Efficiency Grant Program

On March 20, 2019, the Province of Ontario announced $200 million in one-time Service Modernization funding for small and rural communities ahead of the provincial budget. The provincial budget then called for budget cuts affecting those same municipalities which was later reversed in May 2019.
budget cuts during efficiency grant program
While the new funding is earmarked for activities that modernize and improve efficiency, the removal of funding in other areas once again puts local governments in a tight squeeze.
So, what does this mean to the people that oversee small and rural Ontario communities? What can Ontarians from smaller communities (small municipalities) expect to see?
We spoke to a handful of CAOs in Ontario:
about the modernization and efficiency grant process, including the types of projects that are on the horizon and the thoughts about the changes that could be coming to a small/rural municipality near you.

What's the Catch?

Municipalities have accepted the funding, but are wondering, “what’s the catch?” Don’t municipalities already operate efficiently?
Ontario Municipalities Receiving Funding
pie graph
This will enable important modernization efforts, such as information technology solutions, service delivery reviews and the development of shared services agreements, all of which would help reduce future municipal costs and achieve value for money.
The province’s focus on spurring efficiency in smaller municipalities implies that there is room for local governments to find new ways to do things better.
According to Don MacLeod, CAO for the Township of Zorra:
“We were stunned. It was completely unannounced and unexpected. We’ve had 6 straight years of cuts and our Council has had to increase municipal taxes by 7-8% per year each year just to keep our level of service.”​
So, new funding is good news, right?
It’s not exactly clear whether this provincial funding is being used to push municipalities toward limiting the services that they offer, but it could be an inevitable conclusion.
Inevitably, CAOs and their staff work to find the best places to cut, then prepare a list of options to the elected officials. Things can stay the same if Council wants to raise taxes, but under a Provincial directive to find efficiency, the only choices may be to find new ways to cut services.
The only problem with that approach is that municipalities have seen major cuts to their provincial transfer payments in the past. Adjusting to funding shifts is particularly difficult when municipalities are dealing with the added demands that come with population growth.
You’ve probably heard of the following:
  • Better service
  • Faster service
  • Better quality
The Ford government would like municipalities to accomplish all 3 of these. Is that realistic?
increased population people

Service Delivery Reviews (SDRs)

The Township of Zorra has decided to contribute $20,000 toward the cost of partnering with 8 other municipalities in the County of Oxford region. The communities in this region are working together by collectively using $180,000 from their Efficiencies Grants to complete a joint Service Delivery Review (SDR).
This is a common response to uncovering future efficiencies. This process begins by engaging consultants to:
  1. Identify Project Scope: The basic terms of reference for the review are selected, including the objectives, deliverables, process and schedule.
  2. Complete an Environmental Scan: An overview of municipal operations, current staffing levels, financial resources, and municipal services are completed.
  3. Compare with Municipal Peers: A review of key performance indicators (KPIs) and those from closely matched peers makes it possible to see whether municipal operations are either in or out of sync. There should be close parity amongst peer municipalities at this stage, unless there are truly unique factors (like geography, economics, population density) that explain the differences. If you are comparing apples to apples, there should be more similarities than differences.
  4. Review Options: An itemized list of recommendations is made up, outlining possibilities to consider before making decisions.
  5. Make Decisions and Implement Changes: Recommendations are presented to Council. Council may decide to adopt any or all of the recommendations after weighing the political impact. Feedback from the public consultation process should inform how ratepayers will react to the final decision.
We would love to hear about your plans, impressions, and feedback!