LUMCO LARGE URBAN MAYORS’ CAUCUS OF ONTARIO

February 22,201 1 For immediate release: Affordability of Arbitration for Communities Top Priority for Large Urban Mayors’ Caucus of Ontario (LUMCO)

Mississauga, ON - A group consisting of newly-elected Mayors participating in the Large Urban Mayors’ Caucus of Ontario (LUMCO) meeting at the Town of Markham on Friday unanimously passed a resolution requesting Ontario Premier Dalton McGuinty to change the rules of arbitration governing the municipal public service. Arbitrated settlements must be more affordable to communities. “The request has been made fo the Province many times over the years by fhe municipalities of Ontario and the recession we are experiencing makes it an even more urgent need as the municipalities continue to face budget challenges,“ stated Mayor Hazel McCallion, Chair of LUMCO.

’‘I am pleased that the Mayors of LUMCO have come together to support this important resolution for our taxpayers. A salary and benefit decision of an arbitrator has to be sustainable in the long term and must reflect the realities of the global economic recession and the adjustments that have been faking place in the private secfor,” added Mayor Frank Scarpitti of the Town of Markham, the host municipality for the February lEfhLUMCO meeting. Arbitrators use provincial comparators and any local economic circumstances is generally not considered. “Arbitrators need to apply local economic tests before making awards, such as what change in property taxation would occur, loss of assessment, current layoffs or loss of employment to determine a municipality’s ability to pay. Arbitrators need to consider if the municipality will have to raise taxes and if homeowners can afford that,” Mayor McCallion added. “Paying more and more in salary and benefits means less money to deliver and expand services. Whereas the private sector has managed to keep wage pressures within the context of economic conditions the same is not true with public sector organizations. The private sector has been more successful at limiting wage pressures and negotiating new collective agreements that are reflective of economic conditions. Municipalities have limited means such as either property taxes or user fees to generate annual revenues to pay for these pressures. Those revenues are paid by the very residents whom are impacted by economic conditions hence the need to ensure affordability is a component of arbitration. Municipalities deliver services which are dependent on people resources and comprise a significant percentage of all operating budgets across the Province, hence when the annual wage increases are not related to economic conditions and affordability the pressure is one of the largest annual budget pressures along perhaps with infrastructure renewal. Without additional funding mechanisms for municipalities the ability to continue to manage annual wage pressures adds to the complexity of municipal governance.

-30-