We present the details of Ottawa’s “historic” $543 million agreement with the province

The deal won’t solve all of Ottawa’s financial challenges and doesn’t represent new money that can be spent however the city chooses, says Mayor Mark Sutcliffe.

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The province of Ontario will “take over” responsibility for Highway 174. Two sites will be identified in the city to build modular housing. There will be a new police operations center in downtown Ottawa.

Premier Doug Ford was in Ottawa on March 28 to announce a $543 million “new agreement” with the city, which will provide $346 million in capital funding over the next 10 years and $197 million in support operational for the next three years.

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On Wednesday, the city council approved the deal and learned more about what was to come.

“This is a half-billion-dollar lifeline for Ottawa,” Mayor Mark Sutcliffe told councilors.

The deal won’t solve all of Ottawa’s financial challenges and doesn’t represent a lot of new money that can be spent however the city wants, Sutcliffe said, but it is a “historic” investment in public safety, rural roads, transit and economic development and revitalizing the downtown Ottawa and the ByWard Market, he said.

“It also helps us deal with significant budget pressures in the coming years.”

Sutcliffe and senior city bureaucrats revealed more details about some components of the deal, although some information and timelines remained unclear.

This is what councilors heard on Wednesday:

  • The province is “burdening” the costs of maintaining and upgrading Highway 174 in Ottawa’s east end. These responsibilities have cost the city millions since they were transferred from the province to the city in 1997. “Not only does that fix a historic wrong, it will also save us millions of dollars in the future,” Sutcliffe said. Maintenance of the 27-kilometre stretch from Highway 417 to the city limits will receive $9 million from the province over three years and $47 million over the same period to cover capital projects.
  • The city agreed to assign its rights to the province to receive and retain consideration for the Ottawa Hospital Riverside Settlement. Brief explanation: Provides 256 long-term care beds that the hospital is developing. This was a “non-negotiable item” for the province, said city manager Wendy Stephanson.
  • The city has committed to submit a plan to improve safety for residents, tourists and businesses in ByWard Market and the transit system in the next 120 days in exchange for funds to implement the plan. This includes funding for police and city services to revitalize the Market area, mental health and wellness, such as a mental health and substance call intake, triage and dispatch initiative that will divert 911 calls.
  • The province has committed S120 million over three years to support homeless initiatives, including overflowing permanent emergency shelter sites to transition from hotels, motels and temporary emergency recreation centres. There will also be support for community shelter providers, day programs and emergency overnight shelters. Ford and Sutcliffe have also committed to creating a city-province working group.
  • The province is clarifying the requirement to have police on construction sites, which could potentially reduce construction costs, Stephanson said. This is one of several “non-financial” supports the province is exploring with the city. Others include alternative debt financing opportunities and debt financing flexibility.
  • The province has asked the city to identify two surplus lots to build low-rise, “affordable” modular housing that can be built quickly. There is a timeline to identify sites in the agreement to prepare the ground for development, Stephanson told councilors, although he declined to name candidate sites. By CMHC’s definition, “affordable” housing consumes no more than 30 percent of a household’s pre-tax income.
  • The city has committed to working with the province to “explore opportunities” to help ensure housing availability through tools such as the vacant housing tax and the provincial non-resident speculation tax.

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Among next steps, the city should work with the federal government to obtain a nearly equal amount of funding. Some parts of the agreement with the province depend on federal funding.

The city has requested that the federal government commit to $493 million in funding, Stephanson said.

“We need long-term commitment and funding from the federal government for refugees and asylum seekers who come to Ottawa and challenge the stability of our shelter system,” he told councillors. “We need long-term commitments to manage the excess costs related to managing protests and demonstrations in the country’s capital.”

doug ford brand sutcliffe
Premier Doug Ford was in Ottawa on March 28 for the Ottawa Board of Trade’s Mayoral Breakfast Series with Mayor Mark Sutcliffe. Photo by Justin Tang /The Canadian Press

The city will also seek federal commitments for housing and infrastructure and support for the city as the federal government divests of office buildings.

There is a lot of work ahead, including a transfer payment agreement so money can flow to Ottawa as quickly as possible, Stephanson said.

Some issues will be presented to city committees and councils, as well as the provincial government, for consideration and debate. Stephanson said he would report on progress by the end of 2024.

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