Ontario Government Proposes Breakup of Peel Region, Paving the Way for Independent Cities

The Ontario government has introduced legislation to break up the Region of Peel, paving the way for Mississauga, Brampton, and Caledon to become independent cities by 2025. The bill, named the Hazel McCallion Act in honor of the late mayor of Mississauga, aims to establish a transition board to ensure a fair and balanced process.

The transition board, which will be formed later this year, will consist of up to five members appointed by the Minister of Municipal Affairs and Housing. These members will possess expertise in labor, governance, and finance, and will provide recommendations by the summer or fall of 2024.

Minister Steve Clark emphasizes the need for a successful transition board and aims for a swift establishment after the legislation passes. He intends to initiate active and comprehensive discussions on the proposed changes and provide certainty to the three communities involved.

The transition board’s responsibilities include analyzing labor relations, untangling regional services, determining property tax arrangements, and ensuring financial sustainability. While the board will oversee the financial decisions of all three municipalities, its level of interference in local decision-making remains unclear. However, if any municipality makes a decision contrary to the transition board’s advice in the next two years, the minister will have the power to override it.

One major point of contention is financing, particularly for Brampton, which claims that Mississauga would owe them at least $1 billion in infrastructure. Brampton argues that economic development and housing will suffer without appropriate compensation.

Currently, all three municipalities contribute a significant portion of their tax revenue to the region as a whole. Brampton provides nearly 40% of its tax revenue, while Mississauga contributes 45%. These funds support joint core services such as police, water treatment, roads, garbage collection, and housing supports. Once the cities become independent, they will likely assume full responsibility for these services. However, some regional services like police and utility rates for water services might remain intact.

Nando Iannicca, the Regional Chair of Peel, and chair of the Peel Police Services Board, expresses concern about the impact on first responders and the thousands of employees who provide vital services to all three municipalities. The timeline for the transition is tight, and the region’s complex operations, including a $41 billion corporation with 10,000 employees, pose a challenge.

Further legislation may be proposed in the fall of 2024 to address any outstanding restructuring matters. By January 1, 2025, one year before the next municipal election, Peel Region will officially dissolve, completing the transition to independent cities.