Technical Guide

Introduction

This guide outlines the grant parameters for the 2023 Ontario Municipal Partnership Fund (OMPF). It is intended to provide a technical overview of the funding program.

Overview

The OMPF is the Province’s main general assistance grant to municipalities.

The program primarily supports northern and rural municipalities across the province. Its objectives are to:

• recognize the challenges of northern and rural municipalities, while targeting funding to those with more challenging fiscal circumstances
• support areas with limited property assessment
• assist municipalities that are adjusting to year-over-year funding changes.

2023 OMPF — Program details

For 2023, the government is maintaining the overall structure and program envelope of the OMPF.

The 2023 OMPF will provide a total of $500 million to 389 municipalities across the province.

The program will continue to be responsive to municipal circumstances through annual data updates and related adjustments.

Consistent with prior years, Transitional Assistance will continue to ensure that municipalities in northern Ontario receive at least 90 per cent of their 2022 OMPF allocation, and municipalities in southern Ontario receive at least 85 per cent.

2023 Minimum Levels of Support (Per Cent of 2022 OMPF Allocation)

Northern Ontario	90%
Southern Ontario	85%

Municipalities in all regions of the province with the most challenging fiscal circumstances will continue to have their funding enhanced up to 100 per cent of the prior year’s allocation.

Provincial support to municipalities

The OMPF is being maintained in the context of increased provincial support to municipalities. For example, the additional investment in the Ontario Community Infrastructure Fund (OCIF) and the introduction of the Northern Ontario Resource Development Support (NORDS) program.

• In the 2021 Fall Economic Statement, Ontario announced a $1 billion increase in the Ontario Community Infrastructure Fund (OCIF) to help small, rural and Northern communities build and repair roads, bridges, water and wastewater infrastructure. This brings the total investment to almost $2 billion over five years starting in 2022.
• The NORDS program is providing up to $15 million annually over five years to northern municipalities to support infrastructure projects.

2023 Ontario municipal partnership fund

The 2023 OMPF will provide a total of $500 million to 389 municipalities across the province through the following core grant components and Transitional Assistance.

1. Assessment Equalization Grant Component — $149 million

Provides funding to eligible municipalities with limited property assessment.

2. Northern Communities Grant Component — $89 million

Provides funding to all northern municipalities in recognition of their unique challenges.

3. Rural Communities Grant Component — $154 million

Provides funding to rural municipalities, including targeted funding for rural farming communities, in recognition of their unique challenges.

4. Northern and Rural Fiscal Circumstances Grant Component — $93 million

Provides additional, targeted funding to northern and rural municipalities based on their fiscal circumstances.

5. Transitional Assistance — $16 million

Ensures a guaranteed level of support to municipalities based on their 2022 OMPF allocation.

Note: Figures are rounded.

2023 OMPF Grant components

1. Assessment equalization grant

The Assessment Equalization Grant provides funding to eligible single- and lower-tier municipalities with limited property assessment due to lower property values and/or limited non-residential assessment.

To determine the grant amount, a total assessment differential (such as, the total municipal assessment below the provincial median per-household threshold of $304,500) is calculated for each municipality. Single- and lower-tier municipalities receive funding based on the total assessment differential. Funding provided through this grant increases the further a municipality’s total weighted assessment per household is below the provincial median.

2. Northern communities grant

The Northern Communities Grant provides funding to all northern municipalities in recognition of the unique challenges they face.

The grant is based on the number of households, and the per-household amount is $239.

3. Rural communities grant

The Rural Communities Grant recognizes the unique challenges of rural municipalities and particularly those of rural farming communities.

The Rural Communities Grant provides funding to single- and lower-tier municipalities across the province based on the proportion of their population residing in rural areas and/or small communities, as measured by the Rural and Small Community Measure (RSCM).

Municipalities with an RSCM of 75 per cent or more receive $132 per household. Municipalities with an RSCM between 25 per cent and 75 per cent receive a portion of this funding on a sliding scale. For additional information on the RSCM, see  Appendix A.

Rural municipalities where farmland represents more than 70 per cent of their land area

Per-household funding provided through the Rural Communities Grant includes an enhancement for municipalities with the highest levels of farmland (where farmland represents more than 70 per cent of municipal land area), in recognition of their particular challenges.

This funding enhancement is provided based on the Farm Area Measure (FAM), which reflects the percentage of a municipality’s land area comprised of farm land (See Appendix B for further information on the FAM).

Single- and lower-tier rural municipalities with a FAM of more than 70 per cent and an RSCM of 75 per cent or greater receive funding according to the table outlined below.

Rural municipalities with an RSCM between 25 and 75 per cent

Single- and lower-tier rural municipalities with a FAM of more than 70 per cent and an RSCM between 25 per cent and 75 per cent receive a portion of the funding according to their RSCM.

The following table provides the per-household funding for a municipality with an RSCM of 50 per cent (see Appendix C for a summary of Rural Communities Grant parameters based on the RSCM and FAM).

4. Northern and rural fiscal circumstances grant

This grant is provided to municipalities eligible for funding through the Northern Communities Grant and/or Rural Communities Grant, both of which provide a fixed per-household funding amount to northern as well as single- and lower-tier rural municipalities. In addition to these fixed per-household amounts, the Northern and Rural Fiscal Circumstances Grant provides targeted support in recognition that not all northern and rural municipalities have the same fiscal circumstances.

The Northern and Rural Fiscal Circumstances Grant provides targeted funding to eligible municipalities based on their relative fiscal circumstances, as measured by the Northern and Rural Municipal Fiscal Circumstances Index (MFCI). For additional details on the Northern and Rural MFCI, see Appendix D.

In 2023, the Northern and Rural Fiscal Circumstances Grant will provide $93 million to support northern and rural municipalities with challenging fiscal circumstances.

See Appendix E for additional information on the Northern and Rural Fiscal Circumstances Grant parameters.

Northern and rural municipalities with an RSCM of 75 per cent or greater

Northern municipalities, as well as single- and lower-tier rural municipalities with an RSCM of 75 per cent or greater, receive funding according to their MFCI as outlined in the table below.

Rural municipalities with an RSCM between 25 and 75 per cent

Single- and lower-tier rural municipalities with an RSCM between 25 per cent and 75 per cent receive a portion of the per-household funding according to their RSCM.

See Appendix E for more detailed information.

Additional municipality-specific details are provided in the customized 2023 Northern and Rural MFCI Workbooks.

5. Transitional assistance

Transitional Assistance assists municipalities in adjusting to year-over-year funding changes. This funding ensures that municipalities receive a guaranteed level of support based on their previous year’s OMPF allocation.

In 2023, minimum funding guarantees have been maintained at 85 per cent for southern Ontario and 90 per cent for northern Ontario. This means that municipalities in southern Ontario will receive at least 85 per cent of their 2022 OMPF allocation and northern municipalities will receive at least 90 per cent of their 2022 OMPF allocation.

These minimum levels of support will continue to be enhanced, up to 100 per cent, for eligible northern and rural municipalities across the province with more challenging fiscal circumstances, as measured by the Northern and Rural MFCI.

Implementation

OMPF allocations are announced annually in time to support the municipal budget planning process, and payments are issued in quarterly installments to municipalities. All OMPF allocations are provided to municipalities as unconditional grants.

The Ministry of Finance calculates OMPF municipal allocations based on a defined set of data elements (see Appendix F).

Municipal workbooks

In order to assist municipalities in better understanding the 2023 program, the Ministry of Finance has developed a customized set of municipal workbooks for each municipality. These include:

• 2023 Ontario Municipal Partnership Fund Workbook
• 2023 Northern and Rural Municipal Fiscal Circumstances Index Workbook

The workbooks provide municipality-specific details and are shared electronically with municipal treasurers and clerk-treasurers.

2023 Reporting obligations

Municipalities are required to submit their 2022 Financial Information Return (FIR) to the Ministry of Municipal Affairs and Housing (MMAH) by May 31, 2023.

The Ministry understands that providing details related to municipalities’ OMPF allocations in a timely manner is an important part of the municipal budget planning process. In order to continue to support the timely communication of OMPF allocations, the Ministry is requesting that municipalities submit their 2023 tax rates through the Online Property Tax Analysis (OPTA) system or to MMAH by August 31, 2023. Failure to meet these deadlines may result in the withholding of OMPF payments until these documents have been submitted.

Note that the timelines identified above may be subject to revision by the Ministry.

Additional information

This Technical Guide and other 2023 OMPF supporting materials are posted online at:

www.ontario.ca/document/2023-ontario-municipal-partnership-fund

www.ontario.ca/fr/document/fonds-de-partenariat-avec-les-municipalites-de-lontario-de-2023

For additional information regarding 2023 OMPF allocations or for other general inquiries about the program, email your inquiry and contact information to: info.ompf@ontario.ca.

Municipal services offices at the Ministry of Municipal Affairs and Housing

Alternatively, municipalities may also contact their local Municipal Services Office of the Ministry of Municipal Affairs and Housing (MMAH) who can assist in directing their inquiry:

Appendices

Appendix A: Rural and small community measure

The Rural and Small Community Measure (RSCM) represents the proportion of a municipality’s population residing in rural areas and/or small communities. This approach recognizes that some municipalities include a mix of rural and non-rural areas.

The measure is based on Statistics Canada data and is calculated as follows:

1. Statistics Canada divides municipalities into small geographic areas, typically less than a few hundred residents.
2. These areas are classified by Statistics Canada as rural areas or small communities if they meet one of the following conditions:
   • They have a population density of less than 400 per square kilometre.
   • They have a population density of greater than 400 per square kilometre but cannot be grouped with other adjacent areas (each also with a population density of greater than 400 per square kilometre), to produce a total population concentration greater than 1,000.
   • They are not economically integrated with a population centre of greater than 10,000 (see table below).
3. The RSCM is determined by calculating the proportion of a municipality’s population residing in areas that are classified as either rural or a small community.

OMPF calculations incorporate a minor adjustment to Statistics Canada’s classification of “small community.” This adjustment provides a transition between the small community and urban centre classification for areas with a population between 10,000 and 12,500 and is made on a sliding scale:

Percentage of Area Population Included as a Small Community

Area population	10,000	10,500	11,000	11,500	12,000	12,500
Percentage (%)	100	80	60	40	20	0

Appendix B: Farm area measure

The Farm Area Measure (FAM) represents the percentage of a municipality’s land area comprised of farm land. The measure was introduced in the 2016 OMPF in response to feedback from some municipalities that the OMPF should recognize the variation in farm land across the province.

The FAM is calculated as follows:

Accessible description of the formula

A municipality’s FAM is determined using the following components:

1. Farm Land Area, which is equal to acres of land for properties in the farm property tax class, as of December 31st, 2021.
   1. The Ministry of Agriculture, Food and Rural Affairs (OMAFRA) administers the application process for the farm property tax class and is responsible for reviewing eligibility criteria before a property can be placed in the farm property tax class. These criteria include:
      • The property must be assessed and valued as farm land by the Municipal Property Assessment Corporation (MPAC).
      • The farming business generates at least $7,000 in Gross Farm Income (GFI) per year.
      • The farming business has a valid Farm Business Registration number from Agricorp or a valid exemption.
      • The property is being used for a farming business by either the owner or tenant farmer or both.
   2. The acreage of properties in the farm property tax class is determined using the Ontario Parcel database. This database was developed in partnership between the Ministry of Northern Development, Mines, Natural Resources and Forestry (MNDMNRF), MPAC and Teranet Enterprises Inc., and provides information on the land area for each individual property or parcel of land in the province.
2. Municipal Land Area, which represents the number of acres of land in a municipality and reflects municipal boundaries as of January 1, 2021. This measure is based on the Spatial Data Infrastructure (SDI) from Statistics Canada and excludes bodies of water.

Appendix C: Summary of rural communities grant parameters

The following table supports the Rural Communities Grant calculation for single- and lower-tier rural municipalities with an RSCM between 25 and 75 per cent and a FAM of 70 per cent or more.

Appendix D: Northern and rural municipal fiscal circumstances index

The Northern and Rural Municipal Fiscal Circumstances Index (MFCI) measures a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province.

The Northern and Rural MFCI is determined based on six indicators. These indicators are classified as either primary or secondary to reflect their relative importance in determining a municipality’s fiscal circumstances.

The indicators include:

A municipality's Northern and Rural MFCI is determined through three steps, as listed and described in more detail below.

1. Indicator Score — Each primary and secondary indicator is scored based on its relationship to the median for northern and rural municipalities.
2. Average Indicator Score — An average indicator score is calculated based on the average of both the primary and secondary indicators.
3. Northern and Rural MFCI — This index reflects a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province and is based on the relative results of each municipality’s average indicator score. The Northern and Rural MFCI is measured on a scale from 0 to 10.

A lower MFCI corresponds to relatively positive fiscal circumstances, whereas a higher MFCI corresponds to more challenging fiscal circumstances. As a result, an MFCI of 5 corresponds to fiscal circumstances similar to the median for northern and rural municipalities.

Additional municipality-specific details are provided in the 2023 Northern and Rural MFCI Workbook.

1. Indicator score

The indicator score has a range from −100 per cent to 100 per cent and reflects how the value of a municipality's indicator compares to the median for northern and rural municipalities.

For example, an indicator score of 25 per cent indicates that a data value is one quarter of the distance between the median and highest value, while an indicator score of -25 per cent indicates that a data value is one quarter of the distance between the median and lowest value. An indicator score of 0 per cent reflects the median for northern and rural municipalities.

The following table outlines the median, highest and lowest values for each MFCI indicator. Illustrative examples of indicator score calculations are provided on the following page.

MFCI Indicator Parameters
Primary Indicators

Item	Lowest	Median	Highest
Weighted Assessment per Household	$46,000	$289,000	$803,000
Median Household Income	$45,000	$82,000	$141,000

MFCI Indicator Parameters
Secondary Indicators

Item	Lowest	Median	Highest
Average Annual Change in Assessment (New Construction)	-2.3%	1.1%	4.7%
Employment Rate	30.0%	56.0%	75.0%
Ratio of Working Age to Dependent Population	98.0%	152.0%	245.0%
Per cent of Population Above Low-Income Threshold	65.0%	88.0%	97.0%

2. Average indicator score

The average indicator score summarizes a municipality’s overall results on all six indicators.

A municipality’s average indicator score is based on both the primary and secondary indicator average, as shown below.

Note: A positive average indicator score reflects relatively positive fiscal circumstances, while a negative average indicator score reflects more challenging fiscal circumstances.

3. Determination of northern and rural MFCI

The Northern and Rural MFCI reflects a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province.

The Northern and Rural MFCI is measured on a scale of 0 to 10. A lower MFCI corresponds to relatively positive fiscal circumstances, while a higher MFCI corresponds to more challenging fiscal circumstances. A Northern and Rural MFCI of 5 corresponds to fiscal circumstances similar to the median for northern and rural municipalities.

A municipality’s MFCI is determined based on the value of the average indicator score. The example below presents how average indicator scores are used to determine a municipality’s MFCI.

Appendix E: Northern and rural fiscal circumstances grant parameters

The Northern and Rural MFCI is measured on a scale from 0 to 10. A lower MFCI corresponds to relatively positive fiscal circumstances, while a higher MFCI corresponds to more challenging fiscal circumstances. The following table provides details regarding the 2023 per-household funding levels under the Northern and Rural Fiscal Circumstances Grant.

The following table supports the Northern and Rural Fiscal Circumstances Grant calculation for single- and lower-tier rural municipalities with an RSCM between 25 and 75 per cent. The table illustrates the per-household funding amount associated with a range of RSCM and MFCI values.

Appendix F: Data sources

Note: For municipality-specific details, refer to customized 2023 workbooks developed by the Ministry of Finance.

Appendix G: Definitions

Average Annual Change in Assessment (New Construction)	Measures the five-year (2017–2022) average annual change in a municipality’s assessment, for example, as a result of new construction or business property closures, excluding the impact of reassessment.
Average Indicator Score	Summarizes a municipality’s overall results on all six indicators, based on both the primary and secondary indicator average.
Employment Rate	Statistics Canada’s measure of number of employed persons, divided by persons aged 15 and over.
Farm Area Measure (FAM)	Represents the percentage of a municipality’s land area comprised of farm land.
Farm Land Area	Equal to the acres of land for properties in the farm property tax class, as of December 31st, 2021. The acreage of properties in the farm property tax class is determined using the Ontario Parcel database.
Households	Measure of households based on the 2022 returned roll from the Municipal Property Assessment Corporation (MPAC). Includes the following classes: (1) Residential Unit (RU) – Permanent households (2) Residential Dwelling Unit (RDU) – Seasonal households such as cottages (3) Farm Residential Unit (FRU) – Farmlands on which a farm residence exists
Indicator Score	Reflects the position of a municipality’s indicator data value relative to other municipalities and has a range from -100 per cent to 100 per cent. A positive indicator score is reflective of relatively positive fiscal circumstances, while a negative score is reflective of more challenging fiscal circumstances.
Median Household Income	Statistics Canada’s measure of median income for all private households in 2020.
Municipal Land Area	Equal to the acres of land in a municipality and reflects municipal boundaries, as of January 1st, 2021. This measure is based on the Spatial Data Infrastructure (SDI) from Statistics Canada and excludes bodies of water.
Minimum Funding Guarantee	The 2023 minimum guaranteed level of support based on 2022 OMPF allocations. In 2023, minimum funding guarantees for municipalities in southern Ontario will be at least 85 per cent of their 2022 OMPF allocation. Northern municipalities will receive at least 90 per cent of their 2022 OMPF allocation. These minimum levels of support will be enhanced, up to 100 per cent, for northern and rural municipalities in the province with more challenging fiscal circumstances.
Northern and Rural Municipal Fiscal Circumstances Index (MFCI)	The Northern and Rural MFCI measures a municipality’s fiscal circumstances relative to other northern and rural municipalities in the province, and ranges from 0 to 10. A lower MFCI corresponds to relatively positive fiscal circumstances, whereas a higher MFCI corresponds to relatively more challenging fiscal circumstances. An MFCI of 5 corresponds to fiscal circumstances similar to the median for northern and rural municipalities.
Per Cent of Population Above Low-Income Threshold	Reflects the Statistics Canada measure of the population in private households above the low-income threshold for Ontario compared to the total population in private households. The measure is based on after-tax income, and the low-income threshold is based on half the median adjusted household income in 2020.
Primary Indicators	The Northern and Rural MFCI is determined based on six indicators which are classified as either primary or secondary to reflect their relative importance in determining a municipality’s fiscal circumstances. The primary indicators are weighted assessment per household and median household income.
Ratio of Working Age to Dependent Population	Statistics Canada’s measure of working age population (aged 15 to 64), divided by youth (aged 14 and under) and senior population (aged 65 and over).
Rural and Small Community Measure (RSCM)	RSCM represents the proportion of a municipality’s population residing in rural areas and/or small communities. This approach recognizes that some municipalities include a mix of rural and non-rural areas. The measure is based on Statistics Canada data from the 2021 Census.
Secondary Indicators	The Northern and Rural MFCI is determined based on six indicators, which are classified as either primary or secondary to reflect their relative importance in determining a municipality’s fiscal circumstances. The secondary indicators are average annual change in assessment (new construction), employment rate, ratio of working age to dependent population, and per cent of population above low-income threshold.
Weighted Assessment Per Household	Measures the size of the municipality’s tax base. Refers to the total assessment of a municipality weighted by the tax ratio for each class of property (including payments in lieu of property taxes retained by the municipality) divided by the total number of households. Subject to eligibility provisions (such as being a small, northern or rural municipality and/or a current recipient).
Workbooks	The OMPF workbooks provide customized detailed data and grant calculations to assist municipalities in understanding their allocations. The workbooks include: the Ontario Municipal Partnership Fund Workbook and, where applicable, the Northern and Rural Municipal Fiscal Circumstances Index Workbook. These customized workbooks are provided to municipal treasurers and clerk-treasurers following the announcement of annual funding allocations.

Accessible description of formula

Farm Land Area divided by the Municipal Land Area equals the Farm Area Measure.

Return to the formula