The Ford government’s promised $60-billion facelift of Ontario’s health-care infrastructure was on full display in Mississauga this week.
A ceremonial groundbreaking for the proposed $14 billion Peter Gilgan Mississauga Hospital Wednesday featured a fusion drum band, cupcakes and branded party favours to celebrate what would be Canada’s largest hospital, as well as the promise of more modern health care across the province.
“No matter where you go in Ontario, you’re either getting an addition to a hospital or brand new hospital,” Premier Doug Ford said at the event. “I’m just so excited to get the shovels in the ground.”
However, some advocates and experts are warning that a provincial policy requiring local funding for major health infrastructure could be unsustainable for Ontario municipalities who have been asked to shell out hundreds of millions of dollars for hospital projects in recent years.
“When municipalities are spending money on things like hospitals and health care, it means they're not spending money on things like roads and recreation and local municipal infrastructure that’s really their core mandate,” said Alicia Neufeld, an Association of Municipalities of Ontario (AMO) senior policy advisor.
Provincial policy requires hospitals to fork out 10 per cent of construction costs and 100 per cent of funding for new equipment, furniture and fixtures as part of a local share contribution plan.
The funding formula was put in place in 2006 by the Dalton McGuinty government with the aim of simplifying the provincial share of construction costs.
In practice, the province pays around 70 per cent of the total cost of new hospitals, while the local share – covered by hospital revenue, donations and often municipalities — makes up 30 per cent, according to an AMO estimate.
Between 2009 and 2020, AMO calculated that $415 million was “transferred from municipal operations” to fund and support provincial hospitals.
As infrastructure costs have spiked in more recent years, requests for municipal contributions to hospitals have also grown in scale.
Recent hospital funding requests to Brampton, Hamilton, Niagara Region, Muskoka District and Mississauga have totalled nearly $1.2 billion.
Property taxes are the main and most stable source of municipal revenue, but applying them to hospital builds likely means choosing between service cuts or adding new levies that will hike housing costs, says Gage Haubrich of the Canadian Taxpayers Federation.
“I think it's very difficult to justify putting this onto property taxpayers, versus the huge resources that the provincial government has,” said Haubrich.
Ontario Health Minister Sylvia Jones did not directly respond to questions from The Trillium about the sustainability of municipalities using property taxes and taking on debt to contribute to new and rebuilt hospitals.
Speaking ahead of the Mississauga hospital groundbreaking event, Jones told The Trillium that, “I'm obviously very pleased that the leadership under Mayor Carolyn Parrish has moved forward on the local share, because this is a game changer for Mississauga and the Region of Peel.”
In May, Mississauga council endorsed an up to one per cent hospital levy on city property tax bills in the coming years and borrowing to cover the $390-million bill by Jan. 1, 2033.
“Scariest thing I've ever done is sign over $390 million tax dollars,” said Parrish at Wednesday’s ground breaking ceremony. “And if I get unelected after this, we have a hospital.”
The funding commitment follows a public spat between the city and the province, which saw Mississauga refuse the initial $450 million local share request from Trillium Health Partners for the new Peter Gilgan hospital.
The same day Mississauga council turned down the $450 million funding request, Jones wrote a letter saying the province would not be stepping in.
“With the province already covering 90 per cent of the costs of this multi-billion-dollar project, we will not assume any portion of the local contribution, consistent with our approach for every other project across the province,” Jones wrote in the Oct. 31 letter.
“If Mississauga chooses not to support the construction of this hospital, the entire local share cost will be borne by the hospital.”
Municipalities are not required to fund hospital builds, but relying solely on fundraising could mean missing out on sorely needed health-care infrastructure, according to Brampton Mayor Patrick Brown.
In 2022, Brampton council approved a new property tax levy to contribute $125 million to expand the Peel Memorial Hospital.
Brown believes this cost is likely to rise with inflationary pressures on construction.
“This is an extraordinary cost for property taxpayers to cover, but we didn’t want to risk our second hospital being delayed so Brampton stepped up,” he told The Trillium.
“We desperately need this hospital and we are elated the construction has started.”
Before the province agrees to fund their 90 per cent share for major health infrastructure, hospitals have to demonstrate they’ve got a “sound financial plan” to cover their local share, according to a government capital planning document.
Former Township of Muskoka Lakes councillor Frank Jaglowitz told The Trillium there’s pressure on municipalities from provincial officials to agree to put local share costs on the property tax bill, even though “it doesn't belong there.”
Muskoka Lakes is part of the District Municipality of Muskoka, where a $77.3 million local share contribution has been requested for two new hospitals in the area.
“If you want a hospital, you come up with that money. There's no negotiation,” Jaglowitz said.
In Mississauga, officials from Trillium Health Partners said they were able to cover the $60 million difference between their request to the city and the $390 million commitment through fundraising and hospital revenues.
“This revised plan reflects the strong partnership and shared commitment of all our partners. We are deeply grateful to the province of Ontario and the City of Mississauga for their leadership and historic investment in this once-in-a-generation health care project,” said Trillium Health Partners spokesperson Priyanka Nasta in an email.
Parrish hinted at Wednesday's hospital groundbreaking that she and Ford have been in talks about funding.
“We made a few deals, didn't we,” she said at the event.
Asked by The Trillium for details on how the city ended up supporting a reduced local share contribution, Parrish said that “many members of council believe health care is a federal and provincial responsibility, myself included.”
“The new hospital will be the largest community teaching hospital in Canada and despite that belief, in the end we want the hospital to be built to better serve our residents, shorten wait times and provide access to many specialties.”
David Amborski is the director of the Centre for Urban Research and Land Development at Toronto Metropolitan University.
He told The Trillium that having municipalities cover substantial costs for infrastructure they don’t control appears to violate one of the “pay for say” principles.
“Essentially, local governments should only have financial responsibility to fund services for which they determine what is provided.”
“Mississauga agreeing to this funding via the property tax is a bit of (a) slippery slope, both in terms of other municipalities being asked to make similar contributions, or for cities like Mississauga being asked to fund or contribute to other services outside their responsibility.”
