Devastation for Wawa in 2014 Ontario Budget

0
wawa

Wawa-News.com – Yesterday afternoon, the Ontario government presented the 2014 Budget. As in any budget presentation – it was full of good news. However, for Wawa the news is dire indeed. On Page 169 (download budget) – Power Dam Special Payment Program – In 2001, the Province exempted hydro-electric generating stations or power dams from property taxation creating the “Power Dam Special Payment Program” which returned some funds to the communities.

In one fell swoop, Wawa lost $226,508; receiving $2,047,104 instead of 2,273,612 that was expected. Wawa was able to cope because the other largest taxpayer was the Algoma Ore Division. Over the years, the grant has remained relatively constant. In 2006, Wawa was successful in having the Consumer Price Index resulting in an annual payment of $2,092,740, and $2,130,227. In 2014, Wawa will receive 2,326,051, the same as in 2013.

The other factor to consider in the Province’s decision to remove power dams from Municipal taxation is that municipal tax rates increase with time, and increased value in the properties being assessed. Renovations and upgrading increase a property’s value, and corresponding municipal taxes. It was estimated that by 2007 Wawa had experienced an accumulated loss of $4 million in tax revenues.. Mayor Nowicki explained, “We continue to lose each year compared to taxing the dams versus receiving this grant. Lets project that $4,439,486 forward just adding one million dollars a year. For 2014, the accumulated loss would total $12,000,000. Imagine what we could have done with all that money over the past fourteen years.” As an aside, Wawa-news has been unable to determine what the Provincial government is receiving in taxation from Brookfield Power/Algoma Power.

This chart explains what the cuts that Ontario Government is doing to the Power Dam Special Payment Program in the 2014 Budget.

Total Provincial Payment

Wawa Portion of the Power Dam Special Payment Program

Year

Yearly Amount

Payment

Reductions

%

Yearly

Payment

Payment

Reductions

Cumulative

Loss

2013

$2,326,051

2014

18,700,000

$2,326,051

2015

18,100,000

-$   600,000

3.21%

$2,251,385

-$  74,666

-$  74,666

2016

16,800,000

-$1,300,000

7.74%

$2,077,128

-$174,257

-$248,923

2017

14,300,000

-$2,500,000

14.9%

$1,767,636

-$309,492

-$558,415

Wawa will see a loss of revenue beginning in 2015 with $74,666, then $248,923 in 2016, and by 2017, $558.415!

To merely recoup the $558,415 loss in revenue, Wawa would have to implement a 10% Tax Increase across the board!

Wawa will be the hardest hit in the reductions, simply because Wawa has 7 power dams.

Mayor Nowicki is crushed by the Ontario government’s decision, but still fighting. The budget has been presented, and the Premier expects a decision from the NDP party in a week. PC Leader Tim Hudak has already stated that he will not support the minority Liberal’s budget. If the answer from NDP Leader Andrea Horwath is “no”, an election is inevitable.

Last night Mayor Nowicki contacted Algoma-Manitoulin MPP Mike Mantha to discuss the impact these cuts would have on Wawa. She was also able to contact the Liberal Candidate for Algoma-Manitoulin, Craig Houghson as well. MPP Mike Mantha will be in Wawa, Saturday morning and will be meeting with Mayor Nowicki.

Wawa Municipal Council, may have thought that it has tough decisions in this year’s budget, combating a $163,000 deficit. It will be even worse for the next Municipal Council, as elections will be held later this year. In budgeting these projected losses of revenue from the Power Dam Special Payment Program, future Councils will also have to take into consideration any other expenses, such as raising electricity costs, fuel costs… If these cuts go ahead, Wawa will face those deficits at least.

Nonetheless, the current Council will have to evaluate any funding decisions that they make that will carry over into the future – because of the impending loss of revenue. This may mean that many projects may not be considered. Mayor Nowicki cautioned, “There is no room for extras at this time.”

“This news is most disturbing, it’s devastating for our community. There is no way we can afford to lose half a million dollars a year by 2017. In my opinion, money is being drained from the North with these reductions, in order to finance all the huge projects that they want to undertake in the bigger cities.” She continues, “This is a step that hurts small and rural and northern communities because that is were most of the power dams are. This is particularly  harmful to Wawa, because we have so many dams in our area.  And for us to lose this now, I just don’t know how we will be able to manage half a million on this alone, and they are reducing our Ontario Municipal Partnership Fund Grant as well. We are talking probably by 2017, close to $650,000 (in revenue loss). How do we manage that?”

She continued, “I have been in touch with Mike Mantha, he’s aware of the difficulties that we are facing. I have been in touch with Craig Hughson, Liberal hopeful for this area and gave him a brief history of this and the devastating effects it will have on us, and how the Liberal government will be destroying our community with this.”

Our incoming CAO, Chris Wray is aware of the changes in the Power Dam Special Payment Program. Mayor Nowicki explained, “He is already working on this for us, compiling documentation, and we will not settle until this is out of the budget. This budget must not pass with this in it!”.


to contact Michael Mantha: by email at mmantha-co@ndp.on.ca or by phone at 705-461-9710/1-800-831-1899.