'There's going to be more': Municipal leaders say northern Ontario town won't be the last to run out of money

The northern Ontario Township of Fauquier-Strickland could shut down most municipal services by Aug. 1 due to a financial crisis.

Now, the president of the Federation of Northern Ontario Municipalities (FONOM) says it could be the first of several small northern communities to face that reality.

"I do think there's going to be more," said FONOM president Danny Whalen.

"There are many municipal councils that look outside of their own powers to get money. It's easy to go to the province and say, 'We need more funding.'"

On July 9, Fauquier-Strickland Mayor Madeleine Tremblay said the town of around 500 people has a $2.5-million operating deficit and would be forced to shut down all municipal services by Aug. 1, unless there was an intervention from the province or a property tax increase of 190 to 230 per cent.

Whalen said the news release Tremblay issued to update residents about the municipality's financial crisis didn't mention any possible solutions.

"There's no talk of shared services. There's no talk of forming boards to better run municipal facilities," he said.

"It's all about give me a cheque, give me a cheque, give me a cheque."

Whalen, who is also a city councillor in Temiskaming Shores, said amalgamation is something Fauquier-Strickland should consider to help address its financial problems. 

"Temiskaming Shores is a self-inflicted amalgamation," he said.

"That's the best thing we've ever done. Yes, it did increase costs, but the service level has just astronomically increased. So there are huge benefits."

Sounding the alarm

Chris Rickett, a municipal and economic development consultant and former councillor in Stratford, Ont., said many small municipalities across the province are struggling financially. 

"I think municipalities have been sounding the alarm for years about the challenges they have from a fiscal perspective," he said.

Rickett said there are several reasons many small municipalities are in the red.

In the 1990s, the provincial government downloaded responsibilities for services such as social housing and public health to municipalities, which added to costs.

Rickett said municipalities with small tax bases, such as Fauquier-Strickland, also have trouble keeping up with rising costs.

"Sometimes property taxes are too low," he said.

Fauquier resident Alan Gosnay told CBC News his annual property taxes increased from $2,300 when he purchased his home in December 2024 to $5,600.

But Rickett said $2,300 a year in property taxes was probably too low for the town to maintain basic services such as garbage collection, road maintenance and a water treatment plant. 

"You have many municipal councils across the province that are hesitant to raise property taxes even when the math doesn't work," he said.

At a special city council meeting on July 14, Tremblay confirmed she would be meeting with representatives from Ontario's Ministry of Municipal Affairs and Housing ahead of the Aug. 1 deadline.

Rickett said those discussions with the province are an opportunity to look at different governance models that could help Fauquier be more fiscally responsible.

"Sometimes municipalities can work together on service boards and share those costs," he said.

"An easy solution would be just for the province to write them a cheque, which might have to happen in the short term. But we need to actually really rethink how we're approaching our municipalities from a governance perspective and ultimately how we fund those municipalities."

Sally Hagman, the mayor of Blind River, said her town of 3,400 underwent a service delivery review eight years ago that found 53 areas for improvement.

"Some of them [were] really minor and some of them were major," she said.  "But we have done very well in our report card in terms of that review."

Hagman said Blind River shares some services with nearby communities, including Mississauga First Nation, Huron Shores and Elliot Lake to save on some costs.

She also credited municipal staff for doing a good job at attracting federal and provincial investment through grant applications. 

"They do go after every nickel and dime that they can go after," she said.