IN THE MATTER OF an arbitration relating to the apportionment of prescribed
costs for Ontario Works, the Ontario Disability Support Program, child care,
social housing, and land ambulance services between The Corporation of the
City of Guelph (the City) and The Corporation of the County of Wellington
Douglas S. Colbourne, Arbitrator
For the City of Guelph L. Payne
For the County of Wellington D. Thomson
In a letter dated February 26, 2008, the City of Guelph (The City) advised the
County of Wellington (The County) that they intended to terminate the previous
Social Services agreement on February 29, 2009 pursuant to the provisions of
section 7(c) of that agreement. The City then commenced an arbitration of the
apportionment of costs pursuant to the provisions of various social services
In that same letter, the City forwarded an agreement for the apportionment of
land ambulance costs, proposing the continuation of the previous arrangement
based on population.
In March of 2009, the County requested that the cost sharing of land ambulance
services be included in the arbitration.
Currently there are no agreements in place, however the parties have continued
to share costs on the basis of the previous agreements to the present date.
I was appointed as arbitrator by the parties. An arbitration agreement was
prepared by the parties and executed on July 10, 2009 (Tab 1, Exh. 2).
The agreement set out my jurisdiction, procedural rules, as well as the dates for
exchange of statements of issues, and all documents, reports and witness
statements to be relied upon at the hearing.
The hearing commenced on October 26, 2009 with evidence heard over a period
of nine days. Oral argument was heard on November 13, 2009, with written
argument and reply and sur reply following into December 2009.
Counsel for the parties advised at the opening of the hearing that the proper
administration costs with respect to the services in question are not to be part of
The Province, in 1997, through the enactment of the Local Service Realignment
Act transferred responsibility for a number of social programs to municipalities.
Consolidated Municipal Service Managers (CMSM) were established to manage
and deliver social services and social housing within a designated area. There
are 37 such CMSM‟s in Ontario. Nineteen are in single tier municipalities
wherein the boundary of the CMSM is coterminous with the municipal boundary.
Eighteen are similar to the City and the County in that there are combinations of
counties, cities and/or towns or townships which form the designated area.
In addition there are ten District Social Service Administration Boards in Northern
Local property taxes fund 20% of the cost of assistance provided under the
Ontario Works (OW), 20% of the cost of assistance provided under the Ontario
Disability Support Program (ODSP), and 50% of the cost of administering each
program. The Province funds the remaining costs from its general revenues.
In 2007 the Province announced a number of changes in funding support.
Beginning in 2008 the municipal share of the cost of the Ontario Drug Benefits
Program, and in 2009 the municipal costs for ODSP were transferred or
uploaded to the Province. The upload will be completed by 2011. The uploading
of the municipal share of OW will begin in incremental steps and be completed in
2018. The cost of administering OW will continue to be cost shared on a 50/50
basis with the Province.
In the instance of the City and the County, the County is the CMSM for social
services including ODSP, OW and child care, while the City delivers land
By agreement, approved by the Minister of Community and Social Services, the
Joint Wellington County Social Services Committee (The Committee) was
created for the purposes of administering these services. It is composed of equal
representation from each municipality and the Committee and Social Services
administration operate the services and make recommendations to the County
The City was designated by Order of the Minister of Health and Long Term Care
dated May 18,2000 as the delivery agent for land ambulance services for the
designated area, (the City and the County). The Joint Wellington County Social
Services Committee is also the Land Ambulance Committee.
Each CMSM delivers OW while the Province delivers ODSP. Administration
costs for ODSP are charged to each CMSM on the basis of caseloads.
Municipalities in Ontario pay 50% of land ambulance costs.
\Historical Apportionment of Costs:
In 1969 the City and the County entered into an agreement wherein the County
took over responsibility for the delivery of social services current at the time in
both the City and the County. Costs were to be “charged back directly to the
municipality responsible”. In 1983, another agreement continued the County‟s
responsibility for delivery of services, and similarly costs were to be “charged to
the party in whose municipality the recipient of such social services resides”.
That agreement continued until 1995, when the most recent agreement for social
services was executed.
In the Local Service Realignment carried out by the Province in 1997, the basis
for apportionment of costs of CMSM between constituent municipalities was left
to the determination by them. Similarly the Land Ambulance Transition Practical
Guide (Tab 9, Exh. 2) leaves the apportionment of costs between municipalities,
including cross border costs (beyond the designated area) for local
Current Cost Apportionment:
The Agreement dated April 18th 1995, provided as follows:
It set out definitions, cost sharing, and the administration for “social services” as
defined therein: (Tab 3, Exh. 2)
Assistance costs (amounts paid to or on behalf of recipients of social services,
net of Provincial subsidies) are to be charged to the party in whose municipality
the recipient of such social services resides.
Administration costs are to be charged to each party as a percentage of each
party‟s assistance costs, before reduction for Provincial subsidies for the current
year. A formula shall be established by the parties to calculate an equitable
In 1998, the document “Consolidation Arrangements” sets out the apportionment
to be as follows (Exh. 18):
Ontario Works - Based on the residence of the recipients
Child Care – Based on the location of each Centre.
Social Housing - The City 75%, the County 25%. (there is a footnote to
the effect that both parties would work towards the division based on
municipality of origin of tenant once the necessary data was available)
Land Ambulance – Based on population
This arrangement was prepared in light of additional responsibilities in the areas
of ODSP, drug benefits, child care, the wage subsidy program as well as social
housing responsibilities given to the municipalities.
Both parties describe the cost sharing of social services and benefits as being
caseload driven. In 2008, the City paid 73% and the County paid 27% of the
actual costs of social services. Social housing costs were apportioned 75% to the
City and 25% to the County based on the arrangement of January 1, 1998.
The agreement provides that either party could terminate the agreement by
giving written notice to the other party, and upon the expiration of the three
hundred and sixty fifth day after said notice.
Agreement dated March 14th 2000
This agreement sets out the definitions for Land Ambulance Service, as well as
the details for administration, cost sharing and the term of the agreement.
Administration of land ambulance was to be by the Committee which would make
all required policy decisions in respect thereof. The former City Fire Chief, Mr.
Armstrong, now Director of Emergency Services, is the person responsible for
recommending policies to the Committee for land ambulance, with City Council
as the final authority.
The net ambulance services cost was to be shared based on the relative
population of the City and the County. In 2008 the figures were 57% for the City
and 43 % for the County.
This agreement was extended for one year by further agreement dated
December 21st 2005. There has been no further agreement.
Lengthy negotiations between the parties were unsuccessful in developing new
Proposed Cost Sharing:
The City proposes that the concept of weighted assessment be used as the basis
for apportioning both social service costs and land ambulance costs.
The County proposes actual cost be used as the basis for apportioning social
service costs. Actual cost is further defined in the evidence of both Mr. Grimes
and Mr. Dyer. With respect to land ambulance the net cost would be apportioned
on the basis of the call locations of codes 1 to 4. What is proposed in this
respect would result in an average cost per call being distributed on the basis of
location of the calls for those codes.
The City’s Evidence:
The City‟s first witness was Mr. Armstrong, Director of Emergency Services for
the City. He outlined the facilities and staffing of the ambulance locations (two in
the City and six in the County). The calls for ambulance service come through
either the City Police or the OPP for the County. They are then forwarded to the
Central Ambulance Communication Centre (CACC) which is located in
Cambridge. It is one of the 23 such locations operated by the Province. This
CACC serves several other designated service areas in the general area.
The CACC establishes a priority code for each call and dispatches the closest
ambulance in terms of time not distance. This provides for a seamless response
which is one of the five fundamental principles for the delivery of ambulance
services across the Province.
Of the eight priority codes, codes 1 to 4 involve patient contact, while code 7 is
either downed vehicle or unavailability of staff. Code 8 relates to a standby
assignment which requires an ambulance to be available in another area which
does not have a vehicle available.
The CACC provides all of the statistics, amongst which are the statistics for
cross border dispatching, wherein Guelph/Wellington ambulances respond
outside their designated area or vice versa. Mr. Armstrong‟s witness statement
on pg. 5 summarizes these statistics for a four and a half year period.
He stated that the statistics provided by the CACC were not always accurate and
they are regularly updated when further dispatch information is available. He
referred to a major error wherein a large number of Grey County calls were
attributed to Guelph/Wellington. The error was discovered by the CACC and
He knew of no municipalities in Ontario using “actual cost ” for apportioning land
He was of the opinion that actual cost apportionment (based upon location of
call) would be highly complex, difficult and impractical even with improved
technology and additional staffing. He also stated that the location of a call was
not always clear.
He reviewed what he understood to be the County‟s proposal and outlined the
detail necessary to determine the actual costs of each trip.
He was of the opinion that land ambulance costs are like health care costs and
should be shared by the residents of all municipalities across a designated
service area rather than on an actual or user pay basis. In his view
apportionment based on population (the current method) or weighted
assessment (the City‟s proposal) would provide a clear consistent and
predictable way to apportion these costs.
He suggested that even if 100% of the calls came from the City some costs
should still be apportioned to the County, based on either weighted assessment
Ms Gough a land use planner was called by the City to outline the geography of
the area and provide a planning report/opinion to describe and illustrate the
relationship between the City and the County and to reach conclusions related to
She, as well as others, outlined the geography and physical facts of the both City
and the County. The County‟s townships are Puslinch (south), Guelph Eramosa
(north), surrounding the City, Erin is further east, Centre Wellington is central,
and further north are Mapleton, Wellington North, with Minto at the top northwest
corner. The County was restructured in 1997 and the number of municipalities
within the County was reduced from 21 to seven as aforementioned.
The County borders ten other upper or lower tier municipalities. The Region of
Waterloo is to the west of Centre Wellington, the City of Hamilton south of
Puslinch, and the Regions of Halton, Peel and the County of Dufferin on the east,
with the County of Grey to the north. All of these areas contain major cities.
The County covers 2570 sq. kms., and contains several villages. Morriston and
Aberfoyle in Puslinch, Rockwood in Guelph/Eramosa, Erin and Hillsburgh in Erin,
Fergus and Elora in Centre Wellington, Drayton and Moorefield in Mapleton,
Arthur and Mount Forest in Wellington North, and Harriston, Palmerston and
Clifford in Minto.
The City has an area of 87 sq. kms. And contains major department store
shopping areas, The River Run theatre, with seasonal theatres in Drayton,
Fergus and Hillsburgh.
County offices are located in two administrative buildings in the City, with an
additional two buildings for the administration and delivery of social services.
Provincial courts, a land registry office and driving test centres are located in the
City. Both public and separate school boards offices are in the City.
There are two hospitals in the City, and one in each of Fergus, Mount Forest and
The City has a full transit system, while the County is serviced by GO Transit to a
Ms Gough outlines “a central place theory”, wherein a city develops with
specialized activities to serve the surrounding area. People will go to that place
for the more specialized services, shopping, administrative services, and
She says this applies to the City and County since specialized activities and
services are provided in the City. It is the centre for the County for government
services, for employment opportunities, shopping, education and entertainment
and it has public transit.
This does not apply to the north part of the County as it is agricultural and the
related agricultural services are supplied in Mt. Forest and Arthur, not the City
She refers to the dearth of policies in the County‟s Official Plan with respect to its
relationship with the City, while describing the only City Official Plan policies that
describe they will work to ensure the urban/regional boundary in planning terms.
In her review of the population data, the distribution between the City and the
County remained static between 2001 and 2006.
Ms Gough reviewed the employment detail from the Watson report prepared for
the City, which shows that between 1996 and 2001 the City had more
employment than labour force. Employment numbers for the north and south
areas of the County indicate that there are more residents than jobs.
She provided the following data regarding commuting:
Guelph residents work mainly in Guelph
Puslinch 35 % work in Guelph, 11% in Puslinch, and 51% outside the
County and the City
Guelph/Eramosa 46% work in the City and 38 % outside
Erin 21% work in Erin and 61% outside the County
Centre Wellington 44% work in Centre Wellington and 26 % in the City
Mapleton 24% work in the township with 48% working outside the
township including 11% in Kitchener
Wellington North and Minto - 58% work in the township with 18 % working
outside of the township
Her conclusion was that except for three northern Townships more County
workers commute to the City for work than elsewhere in the County.
She also reviewed the provision of social service and housing in the service area.
The City has 1407 family social housing units and 83 for the disabled. The
County has 94 social housing units distributed in 4 townships. For seniors
housing the City has 619 units and the County has 424 distributed throughout the
There are three emergency shelters in the City Maryanne‟s Place and two for
youth; Elizabeth Place (females) and Stepping Stone (males). Overflow is
provided in motels one in City and in one motel in Fergus.
People in need have to move to the City for emergency accommodation. In her
opinion the logical progression is from emergency shelters to social housing in
the City and with transit it is easier to move about the City without a car.
Ms Gough stated that there is a greater variety of housing units in Guelph,
including rental properties, while the County has a far greater number of single
family units and minimal rental properties. She quotes the Swanton report to the
effect that wait lists for one person households are large given that rents for
single units in the County exceeds the monthly shelter allowance provided by
OW. As the demand for social housing provides for lengthy waits, individuals will
probably move from the County to the City.
As the majority of social services for the delivery area are delivered in the City,
accessing these services can be difficult for many County residents because
there is no public transit in the County.
There is limited availability of assisted housing for families or singles in the
There are more jobs located in the City than in the County with longer distances
to travel in the County, while jobs can be more easily accessed with transit in the
She states that although there are no statistics on the number of people who
move from the County to the City to obtain the variety of services, several factors
she reviewed lead her to the conclusion that given the difficulty in obtaining
services in the County, “that many County residents who need social services or
social housing are likely compelled to move to Guelph to obtain such services”.
(Pg. 19, Tab 7, Exh. 1)
As commuting patterns show more interaction with the City than with other
municipalities in the County, she says this supports her central place proposition
for the City and the County.
From her review of the application forms for services she concludes that it is
difficult to identify residency in determining how to assign costs for services.
Mr. Kitchen is an economist currently Professor Emeritus, Department of
Economics, Trent University. On behalf of the City, he prepared a report which
he described as an analytic framework for addressing the proper base for
financing social services, social housing and land ambulance. “I did not get into
actual numbers”. He subsequently prepared a reply report dealing with the
evidence of County witnesses Mr. Grimes and Mr. Garrett.
He outlined the history of the funding of social services and land ambulance in
Ontario, and outlined the various reports undertaken by Ontario since 1990 with
respect to Provincial/Municipal funding. He also compared per capita funding
methods of social services, social housing and land ambulance with the rest of
He outlined the various methods of apportionment of cost sharing CMSM‟s in
Ontario. Eight CMSM‟s use caseload for cost sharing of ODSP, OW and Child
Care. Of the remaining CMSM‟s in the Province, weighted assessment is used
exclusively in one, population is used exclusively in one, caseload and weighted
assessments are combined in four, and actual costs and weighted assessment
are combined in three.
For social housing ten CMSM‟s use exclusively weighted assessments, two
combine weighted assessment with actual costs, Weighted assessment is
combined with caseloads in one, actual costs are used exclusively in two, and
two use caseloads, with caseloads and population combined in one. The City
and the County are one of five cost sharing arrangements which do not use
weighted assessment for either social services or social housing.
In recent years he stated that there has been a trend to weighted assessment
(either partially or entirely) including the results of three arbitration awards and
two voluntary agreements in other CMSM‟s.
For land ambulance, these costs are apportioned on the basis of weighted
assessment or population. Eight CMSM‟s utilize weighted assessment, one uses
population, and one uses a combination.
As part of his analysis he discussed the financing of municipal services, those
with private good characteristics, such as water and sewers, the financing of
which can be accomplished by specific charges. – “You can identify the
beneficiaries of these services”.
As well he states there are public good services, which are equally and uniformly
available to everyone, such as parks and roads which provide a collective
benefit, but not everyone necessarily uses them, or not necessarily to the same
extent. You cannot identify the specific beneficiaries of these services.
As a subset of public good services there are those which provide spillovers or
“externalities”, in that the service provided in one municipality might benefit
people in a neighbouring municipality, for which they do not have to pay.
Focusing on the subject issue, Mr. Kitchen noted if a social service or housing
recipient moved from one municipality to another for the service and the former
municipality does not pay for that service, that is a negative spillover. He asserts
that it is difficult to measure or indeed to identify, but there is the potential for
spillovers to exist.
“There are services that are designed to be income distributional in nature and
social services and social housing are two of the obvious examples. They are
potentially available to everyone within the local taxing jurisdiction, but the only
people who benefit from them are those who for whatever reason are deemed to
have insufficient resources”.
His review of several reports with respect to spillovers provides his conclusion
“these reports all recognize that spillovers cannot be measured with any degree
of accuracy and they did not attempt to measure the size of the spillover”. In his
opinion, “this is not really important what is important for funding purposes is that
these reports and subsequent writings recognize the potential for spillovers to
He suggests that it is natural that recipients of social assistance programs
migrate to the urban centre, where the majority of social housing units are
located, more public sector amenities exist, and there is better access to
hospitals and health care and greater opportunities for employment, education,
retraining, and other attractions.
His opinion is that the cost sharing method in a designated area should minimize
funding inequities and unfairness. Social services are distinguished from other
municipal services in that they are provided uniformly across the service area;
the are primarily income redistributional in nature; and they have the capacity for
generating spillovers. In view of that they should be funded according to the
relative strength of the tax base across the area. That is weighted assessment
which is the best measure of the ability to pay.
He stated that weighted assessment is used in whole or in part in a number of
jurisdictions, including across the County‟s townships, as well as for the
distribution of educational costs in the Province. It eliminates the potential for
His opinion is that weighted assessment should apply to all similar delivery areas
no matter the circumstances, which supports his view that the Province should
assume responsibility for social services as they do in other areas, and distribute
costs on the basis of weighted assessment.
Neither he nor other witnesses addressed the issue of cross border costs, even
though the statistics for land ambulance are provided by the CACC. In this case
the cross border costs would not appear to favour Guelph/Wellington.
As to caseload or actual cost apportionment, he doesn‟t distinguish between
them, and there is a privacy issue in determining the residence of recipients, a
question of residence after a certain period of time, and it increases the potential
for municipalities to shift costs.
Municipalities do not control the potential for spillovers since the numbers and
data can be interpreted differently.
As to population as a method of apportioning costs, he says it acts as neither an
incentive or disincentive for a municipality to alter its share of costs and does not
control the potential for spillover, and has no relationship with ability to pay.
There is a high correlation between population and weighted assessment
apportionment. In fact, in these jurisdictions the percentage split of population
and weighted assessment has been extremely close over the last few years.
The statement that an integrated economic unit is necessary for the use of
weighted assessment is in his view simply an assertion, not based on any
fundamental criteria or principles of funding public services.
The next witness for the City was the Director of Finance and Treasurer, Ms
Neubauer. She has been in that position for about 18 months. She reviewed her
understanding of the composition of the various categories of social services.
There are Provincially prescribed basic services. As well there are discretionary
services that can be selected by each jurisdiction, which are 100% funded by that
In her efforts to understand the process of accounting for social services costs in
the County, it appeared to her that caseload and actual costs were being used
interchangeably. She also reviewed her understanding of the documentation and
system used to register the residence of applicants and the integrity of the
process undertaken by the County. She expressed her concerns over the whole
process, her comments were as follows:
“ So every transaction is being monitored as …... And so that‟s where you‟ve got
a fairly complex process for tracking costs, particularly where different programs
have different sharing formulas.
So as I go on to say with respect to complexity, this current method, as I
understand it, adds complexity to the accounting of costs. It increases the
overhead to track the information upon which the calculations are based.
It involves subjectivity in terms of interpreting the data …… subjectivity in terms
of temporary addresses”
In her view, the City is unable to independently verify the documentation and that
as it is complex it increases the likelihood of error.
The County acknowledged that there was an error in caseload allocation during
the period 2001-2007, which resulted in repayment to the City of approximately
In her documentation; Exh. 1 Tab 9
Table 1: Shows the apportionment of Social Services in the Designated
Area for the period 2006-2008.
Table 2: Her extraction from the County‟s 2009 budget of the allocation of
Social Service Costs
Table 3: Apportionment of Land Ambulance Costs for the period.2006-2008
Table 4: Apportionment of both Social Services and Land Ambulance for
Table 5: Her statement shows the current apportionment effect on taxes of
similarly assessed properties on either side of the border of the two jurisdictions
(County- Guelph/Eramosa $375 – City $559, County – Puslinch $ 751 – City $
1117 ) as compared to the education taxes which are similar in each.
She discussed what she feels are the similarities between educational costs and
social service and ambulance costs. The economic benefit is widespread and
crosses municipal boundaries; the services are delivered locally; costs are
recovered from property taxes; and the taxpayer paying may not be the recipient
of the service; and there are mandated provincial standards, subsidies and rules
for the level of service.
She outlined the assessment system in Ontario and how the Province
establishes a ratio for each different class of property which is then applied to the
current value assessment (CVA) to arrive at the weighted assessment. She also
discussed the issue of Payment in Lieu properties.
She suggests that the use of 2009 budget figures by the County was
inappropriate, since it was a different year and it was the first year the City
changed from outsourcing ambulance service to its own operations and it was a
difficult year economically, so there would be a significant difference in social
service costs. As well it was a year of reassessment and the figures would be
different. She criticized the County for using imputed assessment for Payments
in Lieu in its calculations. Mr. Dyer‟s figures include prescribed (mandatory) as
well as discretionary service costs.
She says that the use of weighted assessment overcomes the impact of the
farmlands and managed forests tax rates for the County, and that of commercial,
industrial rates for the City compared to the use of non-weighted assessment as
a means of apportionment. She also points out that the County receives
numerous grants for certain classes of property.
She submits assessment is determined independently by the Municipal Property
Assessment Corporation (MPAC) to provide equity inassessment. The
determination of weighted assessment is verifiable, transparent and does not
vary significantly from year to year.
It is therefore her opinion that social service costs and land ambulance costs
should be apportioned on the basis of weighted assessment.
THE COUNTY’S EVIDENCE:
On behalf of the County, Mr. Cousins and Mr. Hermsen both professional
planners provided their report and gave evidence as a panel. Their evidence
considered the history and future of the County and the City, in order to develop
their opinion of the interrelationship between the City, the County the surrounding
regions, cities and townships.
They confirmed some, and elaborated on other parts of the factual evidence of
the City‟s witness Ms Gough in areas related to geography, population and
The population of the County is equally split between urban and rural with the
rural including some 3500 farm operators. One third of the population is located
in the northern townships of Minto, Wellington North, and Mapleton. One third is
in Centre Wellington and the balance in Puslinch, Guelph/Eramosa, and Erin.
Forecasts for population, (excluding the University population in Guelph) and
employment indicate that the City‟s population to 2031 will increase in a greater
amount than the County although it is the opposite for employment. The
County‟s urban centres are expected to outpace the City‟s employment growth
Although some statistics developed for the County reflect differences for the
three different areas of the County outlined previously, the overall picture related
to places of work, commuting flow, use of roads, and community of interest is as
For the County 15% of the workers go to the City
29% travel outside both the County and the City,
56% remain in the County.
In the County 72% of the jobs are held by County residents, 9% by City
residents and 20% come from outside.
Similar statistics for the City show that 75% of workers remain in the City, 5%
commute to the County and 20% go beyond. In the City 65% of the jobs are
held by City residents, 10% by County residents and 24% from elsewhere.
In view of the fact that the County shares borders with ten other counties, regions
and single tier municipalities, Mr. Cousins and Mr. Hermsen provided their
opinions of the interactions they describe as “communities of interest”. This
involved consideration of electoral boundaries, health and education, places of
work, geography, commerce, neighbouring municipalities, roads, commuting
patterns and cultural and commercial services. Their opinions did not touch on
social services interaction. This is all contained on pgs. 25 to 44 of Tab 1, Exh. 5.
The results from the survey 2006 Transportation Tomorrow, demonstrates that
although the County and the City have social and economic interaction, their
interaction with surrounding regions are more pronounced
Mr. Hermsen stresses the influence of the Region of Waterloo, the fourth largest
urban area in Ontario, and its growing importance as a source of employment. It
has large cultural attractions and significant shopping alternatives. They point out
that Waterloo is a strong sphere of influence. There is a close relationship
between the Waterloo technical centres and the large universities which have
ever expanding faculties supporting industry.
Their conclusions as found at Tab 1, Exh. 5 on Pg. 45;
“ Wellington County and Guelph share a number of common administrative
arrangements and social and economic relationships, however, both the County
and City also share many often more significant, social, economic, cultural and
geographic relationships with other neighbouring municipalities.
The northern part of Wellington County has minimal interaction with Guelph and
enjoys stronger ties to neighbouring Counties such as Perth, Huron, Bruce, Grey
and Dufferin and in some areas to Waterloo Region.
The central and southern part of Wellington County as well as the City of Guelph
are part of several large complex and dynamic regions including the GTA,
Hamilton and Canada‟s Technology Triangle (Waterloo Region). The strong
influences of these regions play a significant role in the economies of both
Wellington County and Guelph.”
Mr. Dyer is a CGA and has been the Treasurer of the County of Wellington since
2001. Prior to that he was Manager of Financial Services and Deputy Treasurer
of the City of Guelph, and prior to that was with the Region of Halton.
He provided an elaboration of the current method of apportionment with respect
to ODSP and Child Care, as follows:
ODSP: – actual costs based on residence of recipient.
Child Care: - actual costs based on residence of the recipient for fee
subsidy and special needs resourcing, and base on the location of the
centre for wage subsidy.
He provided details on the County‟s proposed apportionment as follows:
Ontario Works - based on residence of recipient
Ontario Disability Support Program – based on residence of recipient.
Child Care – based on residence of recipient for fee subsidy and special
needs resourcing, and based on location of centre for wage subsidy.
Social Housing based on location of social housing units
Land ambulance –based on the location of call for service of codes 1-4.
He set out the apportionment of costs based on the actual 2008 costs, 2009
budget for both the City and the County proposals, for each of the social service
and land ambulance categories.
Using the 2009 budget costs the City‟s proposal would shift $4,396,548 of the
City‟s costs to the County, while the County‟s proposal would shift $1,995,518 of
its costs to the City. Using 2008 actuals, the shift in the City‟s proposal to the
County would be $3,885,388, while $1,874,782 would shift to the City in the
Included in his evidence was the County‟s 2009 operating budget, a review of the
cost sharing agreements/arrangements, the history of the LSR, and overview of
the current Provincial/Municipal Cost Sharing.
He provided a detailed review of the services in question. For each he provides
an overview of the service, statistics and distribution. (pgs. 21 – 40 of his witness
For OW, service statistics for 2009, which has provided a significant
increase in caseload, the split between the City and the County was 79% -
For ODSP, the Province is responsible for the delivery and administration
of the program. The Province provides monthly billing summaries
broken down between the two jurisdictions. For the first seven months
of 2009, the split based on place of residence for benefit units (individual
or household) was 71.8% City, 28.2% County.
For Child Care, which operates a centre in each municipality, as of June
2009 the split was 85% City, 15% County. 76% of the licenced child care
spaces are in the City and 24% in the County.
For Social Housing, the Wellington and Guelph Housing Services (WGHS)
division of the County Social Services Department is responsible for the
administration and management of the County owned social housing
units, administration and funding of non-profit and co-operative housing
units and housing units under rent supplement agreements. It is
responsible for maintaining the Centralized Waiting list, and administers
the Affordable Housing Program in Guelph and Wellington.
The split on County owned units is City 74% - 26% County. Non-profit and
co-operative unit split is 86% City, 14% County. Rent supplement split is
89% City, 11% County. This can vary on an annual basis based on take
up and available Provincial funding.
Overall the average split is 82% City, 18% County.
For land ambulance for 2008 the code 1-4 split was 56.3% City 43.7%
County, with the Code 8 (standby) split at 57.4% City, 42.6% County.
In review of actual usage for the various categories, Mr. Dyer indicates that for
OW, “there is virtually no difference between the absolute number of clients in
Guelph, with a previous Wellington address and the reverse. As to movement of
OW clients between 2004 and 2009 229 clients moved from Wellington to
Guelph, with the reverse at 231”.
In a review of billings for the 5 months in 2009, he “indicates that Wellington
County residents are not using subsidized child care spaces in Guelph to any
significant degree, and vice versa. In addition the average daily rates funded by
the City are higher than in the County”.
Mr. Dyer submitted that a tenant residence analysis as of July 2008, and for Aug
2008 to June 2009 “indicates that there is virtually no difference between the
absolute number of tenants living in social housing units in Guelph who have a
previous address in the County and those living in living in social housing units in
the County who have a previous address in Guelph”.
On the Centralized Waiting list there are 1,488 active applicants of which 71%
live in Guelph and 13% in the County. Ninety percent of such applicants wish to
be housed in their home community.
He also reviewed the assessment of the respective municipalities, outlining the
significant difference in composition. The County has 80.7% residential
assessment as compared to the City‟s 62.7%, while multi-residential, commercial
and industrial components are 35% City, 15% County. This in his opinion affords
the City more flexibility to affect the amount of weighted assessment through an
adjustment to tax ratios.
He points out that the significant farmland, managed forest and conservation land
component of the County‟s total assessment matters in relation to the potential
use of weighted assessment as a measure of ability to pay.
He also summarizes property tax levies, average residential tax levies, average
residential CVA and property tax for the constituent townships in the County, and
the City and he concludes “ the above shows that there is a materially heavier tax
burden on the average residential taxpayer in the County than in the City”.
He provided an analysis of the current (2008 actual and 2009 budget) and the
results of the City and the County proposals for cost apportionment.
In his summary of the County‟s proposal the status quo would remain for OW
and Child Care.
For social housing the County proposes to use a similar actual cost, based on
the location of the housing units, since the analysis that shows that there is
virtually no net migration of tenants between the City and the County. He
suggests that the current basis results in a subsidy by the County to the City.
This does provide a significant shift to the City as outlined following.
For land ambulance the average call cost apportionment based on the
distribution of the calls (code 1-4) is the reliable data on actual use, which was in
fact to replace the population surrogate in the current arrangement.
In the County‟s proposal there would be a total shift of $1,995,518 (using 2009
budget figures) an increase of 7.7% for the City and a reduction of 21.17% of
total costs for the County, from the current apportionment basis.
Using those same budget cost figures, there is no change in OW, ODSP and
Child Care, and a very small change in land ambulance. The significant shift is
$1,855,401 in social housing costs from the County to the City. .
The shift of costs in the City‟s proposal of weighted assessment would be in total
$4,396,548, (using 2009 budget costs), which is a reduction of 16.9% for the
City, and an increase of 46.2% for the County from the current apportionment
basis broken down as follows:
The shift for OW costs would be is an increase from $1,080,000 to $
2,272,063 for the County.
The shift for ODSP costs would be an increase from $1,849,000 to
$2,506,240 for the County.
The shift for Child Care costs would be an increase from $336,000 to
$798,081 for the County.
The shift for Social Housing costs would be an increase from $4,032,000
to $6,316,116 for the County.
The shift for Land Ambulance would be a decrease from $2,220,000 to
$2,021,046 for the County.
He then translated those changes into tax levy impacts on average residential
taxes for each municipality. He also discusses the impact and consequences of
adjusting tax ratios and the possibilities considering the Provincial ranges of
Finally he recommends that the effective date of and term of agreement from the
Arbitration award be respectively January 1, 2010, and 10 years. The 2010 date
provides the opportunity for each municipality to implement the decision in the
2010 budgets, while avoiding deficits for either municipality in 2009, which would
double the impact in 2010. .
Mr. Warner gave evidence from his experience as former Social Services
Administrator for the County. Figures supporting his opinion were prepared by
social services staff at the County and/or other witnesses in this arbitration.
He describes his report as a “responding” witness statement, a response to the
statement by the City witness Ms. Gough that: “ many County residents who
need social services or social housing – are likely compelled to move to Guelph
to obtain such services”.
He continues, “I have, accordingly, been asked to address the factors that
provide some explanation for proportionately higher use of social services and
social housing in the more urban Guelph as compared to the more rural
“…..what follows is an analysis of the apparent discrepancy between the relative
share of population ( 58% in the City and 42% in the County) and service usage
measured by caseload (OW and ODSP), the number of children and employees
subsidized (childcare) and the location of housing units”.
He also provided further detail on the history of the provision of social services in
the City and the County. He advised that the County operates its own
transportation system to move welfare recipients around, since there is no public
He described the structure of the County‟s Social Services from the three
Divisions of Ontario Works, Child Care Services and Social Housing through to
the Social Services Committee to County Council.
He prepared an Exhibit setting out population and service level splits for both the
City and the County. He described the relative uses of OW and Child care as
consistent over the years, and social housing as a fixed quantity. This exhibit
For OW the caseload is higher in Guelph than the County, and more so
compared to the rural areas of the County.
For Child Care, the City and urban County licensed spaces are similar, but
zero in the rural area.
Social Housing per 1000 population in the City is 20%, with 12% in the
urban area of the County, with none in the rural area.
He sets out the many factors which in his opinion affect the incidence of greater
use of social services and social housing by City residents.
There is a greater percentage of lone parent and one person households in the
City than in the County. These categories comprise the vast majority of OW
caseloads, and lone parent households are the majority receiving child care
With respect to age distribution those in the 20-44 group are most likely to
receive OW benefits and are 97% of families in receipt of child care subsidies.
The City has the largest percentage in the age group. Those over 45, require
little subsidized child care, and those over 65 do not qualify for OW. The County
has the largest population percentage over 45. Overall, the population and
household demographics indicate a greater likelihood that the City residents and
households will qualify for and use Ontario Works and child care than County
With respect to the incidence of low income, data from Statistics Canada show
the City at 10.8% and the County at 6-7% which suggests a greater probability of
demand in the City for all social services.
“The significantly greater proportion of self-employed residents in Wellington,
combined with low level of use by the self-employed, agricultural and Mennonite
communities is another factor in determining the lower incidence of use of social
services in Wellington the in Guelph.”
His opinion, based on his experience, is that both potential recipients of social
services and in fact the community at large in rural areas are slower to accept
new services and programs than those in urban areas.
New immigrants to Canada, the majority of which are in the 20-44 age group,
seek to settle in urban areas as opposed to rural areas, which contributes to a
higher incidence of use of social services in the City.
Currently 25% of student families (not counted in population statistics) are
receiving child care subsidies. He stated:
He stated :
“The City, having a greater proportion of its spaces in non-profit child care
centres, attracts a higher amount of wage subsidy, and subsequently a greater
amount of the 20% municipal funding share that accompanies such subsidies.
The fixed location of social housing is a legacy of provincial and federal
programmes that existed prior to 1995, with buildings located based on demand,
client group requirements and developer proposals.
With the exception of Ramoth House in Mount Forest,(a facility for pregnant
women), County occupancy of homeless shelters is minimal. Based on his
experience the County homeless find temporary solutions to meet their needs, or
alternatively will end up in either the Kitchener/Waterloo area or Toronto.”
He says all of the foregoing factors showing the incidence of use as between the
City and the County supports actual use apportionment.
Mr. Grimes is an affiliate with the IBI group, where, before retirement he was the
former director of the firm‟s research group. He undertook a number of economic
and fiscal impact studies while with IBI. He has been qualified as an economist
in another arbitration, and before administrative tribunals.
The principles he believed that would support the use of weighted assessment
for the apportionment as proposed by the City are that;
The two separate municipalities operate as a single economic unit, in that
the economic benefits created are shared amongst them. .
They show a high degree of interaction and are dependent on each other
for job creation and labour supply, and other economic interaction at a
level that is not demonstrated with other areas”.
If the foregoing is the case “social costs associated with supporting the
economic unit should be borne across the area as a whole, based on the ability
to pay which is the proxy for weighted assessment”.
On the question of whether or not the City and County operate as a single
economic unit, his analysis covered the following areas:
Statistics Canada 2006 defined the Guelph CMA as the City and the
Township of Guelph/Eramosa, but not the balance of the County. He
concludes that Statistics Canada does not view the City and the County as
a single economic unit.
The distinction between the employment profile of the City and County
underlines the more rural nature of much of the County and its economy
compared to the urban economy of the City, underlining the lack of
With respect to employment interaction, 15% of the employed labour force
of the County work in the City, while 75.7% of the City of Guelph‟s labour
force work in the City. Of City residents 4.9% commute to the County
compared to 19.4%, which commute elsewhere to other areas outside of
both. The City is as or more integrated with the Region of Waterloo than
with Wellington County.
Of the County labour force 55.9% work in the County, 15% work in the
City and the remaining 28.9% work elsewhere.
He summarizes his review of Lee Sims witness statement as follows:
“According to data in the 2006 Transportation Tomorrow Survey, it appears that a
strong transportation interaction between the City and the County does not exist.
Both appear to operate as part of regions more so than with each other”.
In his review of one market study produced for a proceeding in the City of
Guelph, it shows that only parts of the County (Puslinch) as well as the towns of
Milton and Halton Hills are in the City‟s secondary trade area (Zone A). “With the
exception of a few store types, less than 50% of the secondary trade area
expenditures was directed towards Guelph.”
“Based on the foregoing analysis, the Wellington CMSM area does not represent
a single integrated economic unit. …. The Guelph economic unit differs markedly
from Wellington. Most of the County does not form part of the Guelph economic
unit, which is characterized as being drawn relatively tightly around the City of
On the question as to whether there is any migration between the two for the use
of the services in question, his review of statistics for migration between the City
and the County for one and five year periods show more migrants from the City
to the County than the reverse.
With respect to migration of County and City residents to access social services
and housing the County staff provided information for five months in 2009, he
concludes that the data and information provided indicated little migration for the
use of services from the County to the City and vice versa, and where there is
migration, the net number is virtually zero.
“Based on the examination of migration data, it is evident that the County does
not contribute in any significant way to relocation of people to the City, for the use
of the social services and social housing that are the subject of this arbitration or
Based on the foregoing he rejects the weighted assessment apportionment of
costs which in his opinion is only a rough measure of ability to pay.
“Weighted assessment is a function of property value, but property value does
not equate directly to the ability to pay either in terms of household income or net
wealth … a further disadvantage is that ….the allocation between the two could
be unilaterally impacted by a change in the tax ratios.”
He continues, use of that apportionment method:
“would represent a punitive measure whereby the County of Wellington is
required to pay for costs which occur outside of its jurisdiction and for which
County residents receive no material benefit” and “there are no demonstrable
benefits for which the County does not already pay through the existing cost
allocation formula and
The principles applicable actual cost apportionment he espouses are that:
The Municipalities are autonomous self governing political units with independent
fiscal responsibility and taxing authority.
Equity is achieved in that the jurisdiction which consumes the services should
pay for them. “Fairness is not achieved when one party or one municipality--- is
required to pay for the cost of services used by another municipality.”
Transparency and Accountability: The allocation is very open to the taxpayers in
each jurisdiction. Accountability is enhanced in that the origin of the user or
benefiting party can be readily established. This is also accomplished when there
is no incentive for one municipality to shift cost to another municipality.
“Economic efficiency is achieved in the actual cost approach when the end user
of the service … makes a conscious choice whether to use or not use the
service”. The ability to influence and indirectly impact the use by economic
development in one municipality, or a reduction of service levels could impact the
Fairness is accomplished in that the jurisdiction that‟s consumed the services
should pay for them and would not be accomplished if one is required to pay for
costs used by the other municipality”.
His recommendations for cost sharing are as follows:
OW - actual cost based on the residence of the recipient
ODSP - actual cost based on the residence of the recipient.
Child Care - actual cost based on residence of recipient for fee subsidy
and special needs resourcing, and based on location of centre for wage
Social Housing - actual cost based on the prior residence of recipient.
Land Ambulance – the allocation of costs based on location of call of
“It should be noted that the cost sharing recommendations for child care wage
subsidy is a proxy for actual cost as there has been little migration of residents
from one jurisdiction to the other to access the services located in the other
Similarly, social housing cost allocated based on residence of recipient is a proxy
for actual cost based on the fact that there is very limited cross migration
between the City and the County to access social housing units located in the
Land ambulance calls should be allocated based on codes 1 through 4 because
They involve client contact, which better reflects actual cost than costs allocated
on codes 1 through 8, as code 8 is standby and does not involve patient contact.”
Mr. Sims is a transportation planner/analyst, whose retainer was to look at travel
between the City and the County, travel patterns of the people in the City and the
travel patterns of the people in the County, to indicate the degree of interaction
between the two jurisdictions.
The only practical source of travel pattern information is the Transportation of
Tomorrow Survey, which is updated by the Ministry of Transport every five years.
This is filtered and extracted through the Data Management Group at the
University of Toronto. In this instance the data retrieved deals only with the
southern part of the County and the City.
His analysis was aggregated into larger areas, so that in addition to the southern
part of the County and Guelph, he included all of Waterloo Region, Brant County,
all of the zones set out in Exh. 1,of his witness statement.
His trip tables Exh. 3, provide auto trips for drivers and passengers and other
modes, showing all day, and am. and pm. peaks. Mapping Exh‟s. 4 & 5 indicates
destination of trips from the Southern part of the County and from the City. The
summary trip tables of all day trips shows start and destination. This indicates
that 6.5% of the trips from the City are going to southern Wellington. It also
shows that of the trips from southern Wellington 20.4 % go to the City. It also
shows that from the City 8.5% of the trips go to Waterloo Region, while 9.`1% of
the southern County trips go to Waterloo Region. There is a significant number of
trips to and from the Waterloo Region.
His conclusion is;
“Well, basically, that from the City of Guelph there‟s more than twice as much
interchange with other parts of the Greater Golden Horseshoe than with the
County of Wellington.
And for the County of Wellington (southern part) there‟s more interchange with
other parts of the region than with the City of Guelph. And therefore my overall
conclusion is that although neighbours, and one surrounds the other, there is not
an intense interaction between the two.”
A separate analysis for the northern part of the County, shows; “ they have very
little interaction with the City”.
His opinion of the map of roads (Provincial Highways and County roads) is that
the grid system in the County does not place emphasis on the City, when
compared to the spider web system typical in other communities with a City as
the node. He outlined that future improvements to the Highway system in the
County would, in his opinion, move traffic around rather than leading to the City.
As to transit, the City services don‟t go beyond the boundary, and most inter city
carriers and GO serve to link people in the City with other centres and not the
“Overall there is relatively little interaction between the City of Guelph and
southern Wellington in terms of travel. The both have more interactions with
other regions and counties than with each other”.
Mr. Tomlinson is a sessional lecturer in urban economics at the University of
Toronto as well as principal of Peter Tomlinson Consulting. His report was
prepared in response to Harry Kitchen‟s response to a 2004 report of Mr. Grimes
which opinion was repeated in the evidence by Mr. Grimes in this arbitration.
It was Grimes opinion:
“It has been suggested that use of weighted assessment where there are two
separate administrative jurisdictions (Guelph and Wellington, for example) can
only be defended if the two jurisdictions operate as a single economic unit”
Harry Kitchen‟s response is “this is an incorrect and misleading way of evaluating
the funding issue”. Further “there is no theoretical or empirical public finance
model which support the argument advanced by Mr. Grimes”.
Mr. Tomlinson replied that it was his opinion that “Mr. Grimes‟ approach as
articulated in his witness statement dated September 30, 2009 is consistent with
a theoretical model widely accepted by economists (including Mr. Kitchen in his
statement). In this model, spillover impacts (cross border cost or benefit impacts
of municipal servicing decisions) lead to economic inefficiency.
He stated if a municipality in a CMSM similar to the subject, introduces an
economic initiative which has the effect of lowering caseloads in that municipality,
thereby lowering costs, under weighted assessment apportionment the benefits
would flow to both municipalities and has created a spillover where none existed
To sum up on the issue of spillovers, some spillovers may be eliminated by a
change to weighted assessment apportionment (by eliminating the incentive by
one to export social assistance clients or to under invest in social housing), while
others may be created by that same change” (his economic initiative example).
„Empirically‟, he says, there is no evident means of quantifying the overall
He stated the spillover impacts identified by Harry Kitchen could be particularly in
the context of Guelph/Wellington where Mr. Grimes has documented limited
inter-municipal commuting and resident mobility.
His view is that another cross border impact (inevitable with weighted
assessment apportionment) occurs when every four years revaluations occur
which will shift costs onto a municipality whose share of total assessment goes
He concludes: “I re-iterate my opinion that Mr. Grimes approach to cost
apportionment is consistent (given plausible assumptions) with a theoretical
model widely accepted by economists.”
Mr. Garrett was qualified to give evidence as an expert on municipal governance
based on his 38 years experience in all three levels of government.
He reviewed the history of municipal restructuring in Ontario and concludes: “the
City of Guelph and the County of Wellington have withstood all these provincial
reviews, in „90-‟91 and most recently in the late „90‟s under the Harris
government and have remained.” The conclusion is: “each of these municipal
jurisdictions is able to, and should, stand on its own; from an economic (including
fiscal) perspective, and from a community and social perspective, meeting most,
if not all of the 8 criteria outlined in the Design for Development document.”
He reviewed the history of cost sharing and the local services realignment
impact. He reiterates that the “accountability arrangements” among them are to
be decided locally.
He reviewed the provisions of the acts dealing with the subject services, the
Municipal Act, and revenue statutes, which provide for various methods of raising
Some of the statistics (“rough numbers”) he provides are:
The 2009 weighted assessment per capita is $105,302 for the County, $118,628
for the City. In the County the 2009 average taxes of $3,580 per residential
property, while in the City they were $3,177. The County is higher due to the
large farm tax subsidy, and the difference in revenue from the
industrial/commercial tax base in the City. While he reviewed the comparisons
for roads, solid waste management and the library system, outlining causes for
differences, he then focused on some of the subject services.
He set out the numbers and differences in cost of licenced child care spaces per
capita, with 122 licensed spaces per 1000 children in the City, whereas in the
County there are 49 per l000. The 2009 net cost per capita is higher in the City
at $14 compared to the County at $4.
The higher service level in the City of 21 units per 1000 population compares to 6
for the County, although the cost per unit in the City is $ 4,960 while for the
County it is $7,452.
His conclusion is “that for those municipally delivered services such as the social
services which redistribute resources, it is appropriate that those services be
largely or entirely financed from property assessment across the entire municipal
jurisdiction in which the services are provided.
However, and this is my fundamental point, to impose the same principle to
distribute the cost of such services across the boundaries of independent
municipal jurisdictions is, in my view unsupportable.
Instead, …. the costs should be allocated based on amount of service actually
used in each jurisdiction, not in a form of equalization.”
“ The evidence of other witnesses (Dyer, Grimes) in this arbitration indicates that
there is little to no net migration of County residents to the City, or vice versa, for
the use of social services or social housing or otherwise. Even if that were not
the case, in my opinion such migration should be addressed by charge backs
(expenditure recovery) or by municipal controls, as permitted and appropriate,
rather than by pooling of municipal assessment bases.”
He also recommends a cost sharing arrangement between the City and the
County be for a long term, say 5-10 years.
“each partner to the agreement must be able to determine the quantum of
service that it requires, to the extent that it is allowed, and very importantly to
have a “say for pay”. Paying for the inter-municipal delivery of LSR services
should be on the basis of amount used, or service provided by each partner to
the agreement, and each partner should be able to review and comment annually
on the efficiency and discretionary service standards and levels to which the
services are delivered.”
During the years of Provincially lead regionalization recommendations for a
change in structure for these two municipalities was rejected. The County was
restructured from 21 to 7 municipalities. Otherwise they have remained separate
After 40 years of agreement on the issue of cost apportionment of social service
and land ambulance costs, they were unable to agree beyond the last
The City‟s initial concern stemmed from what they felt was an unwarranted
increase in the apportionment for social services. This prompted inquiries,
obviously unsatisfactory answers, and misunderstandings, which lead to the
City’s request for social services apportionment arbitration. This was followed
by the County‟s request for land ambulance arbitration
They agreed that I would arbitrate the matter and following the execution of the
arbitration agreement, a pre-hearing took place, preliminary submissions were
made and the public hearing commenced, all in accordance with the schedule
set out in the agreement.
Evidence given by twelve witnesses and oral argument of counsel was
transcribed. Thirty one exhibits, including several volumes containing extensive
witness and reply statements and written argument were provided.
There was no evidence led, nor argument made, to suggest that different
services might be better apportioned differently, except for the City‟s land
ambulance evidence- to choose between population and weighted assessment.
There would not be much factual difference, since both percentage splits have
been similar for a number of years. No evidence was provided on any theoretical
differences of those methods.
As well, I must determine the date of implementation of the agreement resulting
from my decision and its term. Whatever decision I render, I was reminded that
pursuant to the Arbitrations Act, it is open to either party to have the matter
further arbitrated after two years of the date of the agreement.
The current apportionment is described by several witnesses as actual cost for
social services, the details of which are set out previously in the decision.
However, apportionment of social housing cost is 75% by the City and 25% by
the County, styled as “proposed until better information is available”. Land
ambulance is apportioned based on population.
The City proposes that the costs be apportioned on the basis of weighted
assessment, although the Director of Emergency Services suggested
apportionment based on population for land ambulance services would also be
acceptable. The population apportionment for land ambulance was requested by
the City in its letter of February 26, 2008 when they advised the County of their
intention to seek arbitration on the apportionment of social service costs.
The County proposes “actual cost” be the basis for apportionment. However,
what they propose for land ambulance is an average cost for all trips, both
County and City, be apportioned on the basis of the number of calls originating in
each municipality for codes 1-4. There was no suggested attempt to cost each
trip, or even an average for each municipality.
The apportionment of social housing costs proposed by the County was to be
determined on the basis of the location of the units, which Mr. Dyer viewed as
implementing “the intent of the parties as expressed in the footnote to the 1998 “
arrangement”. In his oral evidence, he acknowledged that he would be content
with apportionment based on the prior residence of the tenant. This would
eliminate any legacy location impact.
Considerable evidence on the shift of costs, and resulting tax impacts from the
proposals was given in the evidence of both Ms Neubauer for the City and G.
Dyer for the County. Whether or not 2009 Budget costs are used or 2008 actual
costs, the shifts from current apportionment, to the City‟s proposal are significant,
except for land ambulance. The County‟s initial proposal presents a significant
shift only in the social housing costs. The details of the shifts both ways have
been set out earlier in this decision.
That being said, determination of the appropriate method of apportionment is to
be determined after considering the specific circumstances in the CMSM, not
This decision covers only the mandated Provincial services and does not affect
the discretionary services, which continue to be decided and funded by each
The date of implementation of the agreement arising from this award requested
by the City was as of February 28, 2009, the date on which the current
agreements expired. They suggest that sufficient notice was given (1 year) and
more time arranging the arbitration, in order to prepare for potential additional
costs in 2009 budgets, to be able to avoid year end deficits carrying over to 2010.
No term was suggested by the City other than a reference to the fact that two
years after the date of an award, pursuant to the Arbitrations Act, it is open to
either party to request arbitration. Ms. Neubauer‟s evidence was that a term
longer than two years is contrary to the legislation. Irrespective of length of term
that provision stands on its own..
The County seeks January 1, 2010 as the date for implementation, simply
because any impact could now be included in 2010 budgets. If provision for
potential impacts were not included in 2009 budgets, it would be a virtual
doubling of the impact for 2010. The County has requested a 10 year term,
although Mr. Garrett‟s evidence proposed a term between 5-10 years.
Previous agreements between the parties range from no expiry date (1995), four
years (land ambulance) with a further one year agreement on it.
Governance by the respective Councils was established some time ago by
previous Councils, It will not be changed by this result. It could perhaps be
assisted by improved communication and co-operation, since the purpose is to
provide the constituents of both municipalities with the mandated social services.
It is Mr. Kitchen‟s opinion that “weighted assessment” is the only method, and
would be the method utilized by the Province, once they assume responsibility
for these services as they should anyway. However, there is no direction from the
Province to that effect and the circumstances considered in other arbitrations,
has not resulted in the exclusive use of “weighted assessment”. It is used in
some circumstances in combination with other methods.
Some evidence from the hearing and the arbitrator‟s report in the
Kingston/Frontenac arbitration was provided to suggest that as in that instance,
as weighted assessment was the predominant method determined, that method
should be adopted here. Some of the witnesses in this hearing participated in
Consideration of that report and the evidence heard, related to that matter,
leaves no doubt about the significant difference between that and the subject
The word “isolated” (geographically)”, was used to describe the circumstances in
that matter. That is dramatically different from this circumstance, wherein the
City is surrounded by the County, which is surrounded by significant urban areas,
Both are part of the Golden Horseshoe, while also experiencing the draw of the
GTA and the Region of Waterloo. These surrounding areas play a significant part
in the interplay between these municipalities.
The City‟s case poses the following issues:
1. There is difficulty in determining actual costs for land ambulance trips, and the
process and privacy issues around determination of place of residence and or
previous place of residence in the current apportionment. This is described as
accountability and transparency, which the City says lacking.
The evidence of Mr. Armstrong outlined the land ambulance operations and the
function of the CACC. He dwelt, (at length) on a misunderstanding of the
County‟s proposal to develop an actual cost for each trip, in order to distribute
He says that would be difficult, and I agree. But, what the County proposed was
that an average cost be developed for all trips, which would then be apportioned
between them on the basis of the location of calls, codes 1-4. The evidence is
that those codes involve live client contact, while others involve administrative
matters and or/positioning of ambulances for further direction.
The connection between the use of “weighted assessment” or “population” for
apportionment, accountability and transparency was not made in the City‟s
evidence as it relates to land ambulance. The evidence on the nature of the
operations, the designated area‟s ambulance locations, the availability of any
ambulance in the area of responsibility of the CCAC, (including beyond the
designated area – “cross border”) begs the description of spillover. .
Despite the suggestion that you cannot always rely on the statistics from CCAC,
it is an independent accounting for designated area calls by the CCAC, sufficient
to correct a substantial error involving an area beyond this designated area. No
other figures are available.
Cross border usage, which on the basis of Mr. Armstrong‟s evidence places this
designated area in a deficit with other service areas might be an issue.
2. The difficulty, and the process involved in identifying the residence of
claimants was the evidence of Ms. Neubauer. She cited an error, corrected by
the County, which required repayment to the City.
The evidence of Mr. Dyer in responding to the issue of spillovers, indicates
clearly that the staff of the Social Services Department had no difficulty in
determining previous residence of claimants for that analysis.
The credibility, reliability of those statistics provided by Mr. Dyer was raised in
argument. The challenge as being hearsay was not raised in his examination. My
opinion is that the gathering of that evidence by staff, and it was presented as
such by Mr. Dyer,is no different than other statistics presented by other municipal
officials. In any event the challenge should have been raised at the time
On the evidence, there is accountability in the social services process, to be able
to distribute cost on an actual basis. It is perhaps more an issue of co-operation
and communication that raises questions
3. Ms Gough‟s evidence, on behalf of the City was that County residents claiming
or using social services are; likely compelled to move to the City, (the location of
the municipal and social service offices) for that purpose. As well the draw of
public transit and other urban facilities was stated to establish the position of the
City in the Central Place theory.
The statistics presented by Mr. Dyer on migration (spillover) for social service
purposes, housing, child care, and the homeless does not indicate any
The evidence of Mr. Sims on transportation indicates “a much higher degree of
people commuting to other Counties and Regions than to Guelph or even to the
southern parts of the County”.
Mr. Grimes evidence on migration from the County, for either social services or
otherwise, established the reverse. His opinion is that an economic unit, which
implies the sharing of the economic benefits of investment and job growth, does
not exist between the City and the County.
In terms of the interplay of residents between the municipalities, Mr. Cousins and
Mr. Hermsen from their study involving studies of places of work, commuting
flows, use of roads, and community of interest, concluded that:
“Wellington County and Guelph share a number of common administrative
arrangements and social and economic relationships, however, both … also
share many often more significant, social, economic, cultural and geographic
relationships with other neighbouring municipalities.
The central and southern part of Wellington County as well as the City of Guelph
are part of several large complex and dynamic regions, including the GTA,
Hamilton and Canada‟s Technology Triangle (Waterloo Region). The strong
influences of these regions play a significant role in the economies of both
Wellington County and Guelph.”
The interconnectedness between the City and County and the draw of the City is
not supported by the overall evidence.
4. Spillovers, or Mr. Kitchen‟s “ potential for spillovers”, he says would be
eliminated with the use of weighted assessment. Weighted assessment would
eliminate any incentive/ need for one municipality to shift costs to the other. In
any event he says, if there are spillovers, the pain should be shared.
Mr. Tomlinson testified that “while spillovers are pervasive in the real world, they
are often trivial”. His review of the evidence on migration across the City/County
border to access social housing indicates that it has been both limited and
balanced in both directions.
Mr. Garrett testified that municipalities constantly grapple with spillovers. He said
however, that it is only when spillovers rise to the level of material reallocation of
resources that they need be addressed. This is not the case here.
The statistics provided by Mr. Dyer, for the majority of the services, indicates
spillovers were minor both ways, and in the case of social housing are balanced.
There was no evidence to suggest there has been any attempt to shift costs and
the statistics do not support the need. In Mr. Tomlinson‟s opinion this arbitration
would be sufficient disincentive to attempt to shift in the future.
5. Since the social services provided are income redistributional in nature (they
are available to all in a uniform manner irrespective of residence), Mr. Kitchen
suggested that as for all other Provincial costs, these costs should be
apportioned on the basis of weighted assessment. The opinion is that they are
similar to education and the costs should similarly be apportioned. In point of
fact, it is the educational tax rate that is uniform across Ontario. Social services
are used by those who need them, whereas education is universally used.
6. Mr. Kitchen stated that weighted assessment reflects the tax base and the
municipality‟s ability to pay. Its use would eliminate spillovers and the incentive to
shift costs between municipalities. In any event they are difficult to determine.
“Economic efficiency is achieved when the potential for spillover is minimized.
This is achieved with a tax base that covers an entire area and is applicable at
the same tax rate.
In the first instance, Provincial support levels for some services are standard
across the Province, so there is no need for claimants to move for funding.
Spillovers or their potential is not eliminated by weighted assessment, it is as
some evidence suggests, “internalized”. There is no need to determine
municipality of residence since it doesn‟t matter in the apportionment of costs,.
Similarly given the current percentage split of costs for social housing, residency
Weighted assessment split of costing could disadvantage one municipality, by
increasing their proportion of increased costs, attributable to the response by the
other for increased demands for services.
Ms Neubauer says that actual cost apportionment “exaggerates” the impact to
the taxpayers because it attributes all of the costs to the same municipality that
incurs additional demands exaggerates in that it attributes the costs where they
are incurred (user pay).
The ability to pay, in this instance, the reference to higher levels of income in two
of the townships, what appears to be income redistribution, is seen as support for
weighted assessment apportionment. As is pointed out in other evidence income
does not necessarily translate into assessment. The evidence also says that
autonomous municipalities have the ability to set different tax ratios and thereby
alter weighted assessment.
Mr. Warner on behalf of the County, given his hands on experience in the
operations at issue, provided his insight into the major factors, which he feels,
explains why City residents access social service and social housing programs
more than County residents. Although the direct connection was not made in the
evidence, this might go some distance to explain the difference in cost increases,
for those services based on caseload apportionment.
The City has many more lone parent and one person households and they
comprise the vast majority of OW caseload. As well the majority of
households receiving child care subsidies are lone parent households.
The City has the greater population in the 20-44 age cohort and this age
group comprises the largest percentage of OW caseload as well as being
97% of families in receipt of child care subsidies.
By far more newcomers to the City and County locate in the urban setting
and they fall predominantly is the 20-44 age cohort.
The City has a somewhat larger percentage of population below the low
In the County those self employed (double the City‟s component) and
those in the significant farming component have great difficulty in
qualifying for social services.
There is a greater inclination for residents to access social services in an
urban setting as opposed to the rural setting.
The City centres have a higher licenced capacity, and there is a much
higher percentage of day care positions supported by wage subsidies.
Due to the higher licenced capacity and higher incidence of low-income
cut-off parents, the demand for special needs resourcing is concentrated
in the City.
Student families in the large university population in the City account for
25% of the number of families receiving child care subsidies.
The concentration of social housing units in the City, while being a legacy
was reflective of demand, client group requirements and developer
proposals at the time they were built.
There is one homeless shelter in the County and four in the City. A partial
review of the City‟s shelter population showed that four of 137 clients were
from the Count
In his evidence Mr. Grimes sums up actual use apportionment follows:
“For services that create spillovers the principles of efficiency, transparency,
accountability and fairness will be achieved if the municipality that generates the
externality, intentional or unintentional, pays for the cost of that spillover that has
been transferred to another municipality”.
His principles of actual cost use for apportionment as set out on Pg. 11 Tab 5,
Exh.7, in these circumstances were supported by the evidence.
Equity means that the jurisdiction which consumes the services should
pay for them
Transparency is met in that the origin of the user or benefiting party can
be readily established.
Economic efficiency can be realized because those who use the service
pay for it.
Each of these municipalities has the ability to influence and impact the use
of these services by their residents.
Each municipality could make a decision to provide or make available
more of the services to its residents, without impacting the other
Summary of conclusions:
With respect to land ambulance, call location statistics are available from the
CCAC, to enable apportionment to be made on the basis of the appropriate
As to the cost per call, the County proposal of the average cost per call is a
adequate measure until, if desired, the parties, can determine costs per call
within each municipality.
The statistics provided by the County with respect to residence and /or prior
residence of claimants, appears to be complete and adequate for purposes of
apportionment of costs.
The migration suggested by the City of County residents for social service
purposes does not exist. Spillovers both ways are minimal and are balanced.
These municipalities are as interconnected with surrounding municipalities as
they are with each other economically, socially, culturally and for employment
purposes. The connections and draw between them raised in the City‟s evidence
is not supported by the evidence
The benefits of apportionment based on weighted assessment are not apparent
The population differences described in the evidence of Mr. Warner as cultural,
supports utilization of the actual cost approach for social service purposes as
proposed by the County. The facts developed by the County process provide
accountability. The legacy location of the units issue will not be issue in the
actual cost proposal of the County, given in the evidence of Mr. Dyer .
It is the award of this arbitral tribunal that for the four year period commencing
January 1, 2010 and ending December 31, 2013, that:
The method for apportioning Ontario Works is based on the residence of the
The method for apportioning Ontario Disability Support Programme is based on
residence of recipient.
The method for apportioning for Child Care is based on the residence of recipient
for fee subsidy and special needs resourcing, and based on location of the centre
for wage subsidy.
The method for apportioning Social Service Housing will be based on the prior
residence of the tenant.
The method for apportioning land ambulance average call cost will be based on
the locations of call codes (1-4)
The parties are directed to prepare the Cost Sharing agreement to incorporate
this award. If the parties are unable to agree, either party may request the
assistance of the Arbitrator.
This award is made at Toronto, Ontario on the 26th day of January 2010.
Douglas S. Colbourne- Arbitrator
1. Shawn Armstrong – Director of Emergency Services
2. Harry Kitchen – Economist
3. Lynne Gough – Planner
4. Margaret Neubauer – Director of Finance and Treasurer
1. Garry Cousins and Bernie Hermsen – Planners (as a panel)
2. Craig Dyer – Treasurer
3. Kim Warner – former
4. Randy Grimes – Land Economist - IBI
5. Lee Sims - Transportation Planner - IBI
6. Peter Tomlinson - Economist
7. Michael Garrett- Municipal Governance
LIST OF EXHIBITS
1. City Witness and Reply Statements
2. City‟s Document Brief
3. Legislation Document
4. Previous Arbitration Decisions
5. County Witness and Reply Statements- Volume 1`
6. County Witness and Reply Statements – Volume 2
7. County Witness and Reply Statements – Volume 3
8. County Witness and Reply Statements – Volume 4
9. Addendum to Witness Statement of Shawn Armstrong
10. County of Haliburton By-law 3256
11. County of Haliburton By-law 3257
12. County of Middlesex Mutual Release- October 10, 2006
13. Land Ambulance Committee Minutes – January 9,2008
14. Swanton Report January 2009
15. Wellington County Study 1990-91
16. Hemson Place of Work Report
17. Roads System -County Map 2009
18. City Staff Report – Department of Finance March 30, 1998
APPENDIX A (CONTINUED)
19. Deputy Clerk Letter April 1, 1998
20. Wellington County Transportation Services Brochure
21. Restatement of Dyer‟s report using 2008 actuals
22. Rule on Disclosure Section 32
23. E-Mail request to Province from C.Dyer – October 29,2009
24. Joint Social Services Committee Report October 14, 2009
25. Ontario Works Information Booklet
26. Community Agencies and Resources Information
27. Map of County, City and Bordering Municipalities
28. Kitchen Report –sworn April 2, 2004
29. Statistics Canada Categories
30. Table of Average Rents in Ontario 2008
31. Neubauer Revised Table 8