Northern Ontario township to shut down all municipal services next month due to financial crisis

The small northeastern Ontario township of Fauquier-Strickland, located on Highway 11 near Kapuskasing, says it will cease all municipal services as of Aug. 1, due to a $2.5-million operating deficit.

The municipality of 467 people, according to the 2021 census, said in a news release that the alternative to shutting down municipal services would be to impose a 190 to 230 per cent property tax increase for all residents.

That tax increase would have tripled most tax bills and potentially forced families from their homes.

"Despite ongoing requests for provincial intervention made to the Ministry of Municipal Affairs and Housing, no concrete assistance or direction has been provided," the news release said.

"A letter sent to Minister Robert Flack on July 2, 2025, requesting immediate ministerial intervention has received no substantive response."

In an email to CBC News, Alexandra Sanita, a spokesperson for Flack, said the Ministry of Municipal Affairs and Housing is "actively engaging with the Township of Fauquier-Strickland on their local challenges."

Fauquier-Strickland said its financial crisis is due to accumulated operating deficits that have depleted all operating and reserve funds.

Mayor Madeleine Tremblay said upgrades to the municipality's water filtration system during the COVID-19 pandemic went over budget, leaving the small community with a bill for $1 million.

Tremblay said many other small municipalities in Ontario are facing similar challenges due to rising costs and a small tax base to cover basic operations.

"We're one of the first, I would say. And I think that's why the minister is hesitant to give us an answer," she said.

Tremblay said the township is looking into options to continue garbage collection if it has to shut down municipal services by Aug. 1, when the five township employees would be laid off. 

She said residents will still get access to hydro and water if the local government ends up shutting down.

No cash reserves

"The municipality has been operating with zero cash reserves for over a year, relying heavily on credit to fund ongoing operations," a release from the township said. 

Fauquier-Strickland council increased property taxes by 26 per cent last year to help address the financial problem.

Tremblay said many of the township's residents are on fixed incomes, and would find it challenging to pay additional property taxes.

Fauquier-Strickland said it's requesting immediate intervention from Ontario's Ministry of Municipal Affairs and Housing, including the appointment of a municipal supervisor or administrator, and some emergency financial assistance.

Not since the Great Depression

Zachary Spicer, an associate professor at York University's School of Public Policy Administration, told CBC News a municipal bankruptcy in Ontario hasn't happened since the Great Depression, nearly 100 years ago.

"Reading the press release, it seems to me like this is really just the town kind of waving the white flag and being like, 'You know, the province does something or like we're done,'" he said.

Spicer said the reason many Ontario municipalities were amalgamated in the early 2000s was because they were no longer financially viable on their own.

He said he expects the province to take action before the township is forced to shut down municipal services.

"The province doesn't allow things like this to sort of occur without a game plan," he said.

"So I suspect there is a kind of an emergency break glass type of plan or scenario that the province has."

In the short term, Spicer said the provincial response could include some emergency funding to keep municipal services running.

Over the longer term, he said there will likely be conversations around amalgamating with nearby municipalities along Highway 11, since many small towns across Ontario are also in bad financial shape.

"It's tough and they've been sounding the alarm for the last 10 to 15 years," he said.

If Fauquier-Strickland is forced to shut down municipal services by Aug. 1, Spicer said he wouldn't expect there to be an obligation for residents to continue paying their property taxes.

Although he said there are likely homeowners who have already paid their taxes for the year.