Thunder Bay's provincial transfer payment down by $1.5M

Thunder Bay's city manager says a reduction in money from the provincial partnership fund will have an impact on the city budget.

Tim Commisso says the city will receive about $1.5 million less this year, for a total of justunder $23 million from the Ontario Municipal Partnership Fund.

He noted the funding cut is not a surprise and is part of a provincial program that works in conjunction with social services funding programs. But the decrease could have an effect on residents tax bills.

"The $1.5 million is basically a one per cent tax increase. Having said that, it's part of a bigger puzzle, he continued.

The reality of this year's budget is it's going to be a challenge, no question."

Commisso said he believes the city will spend less on infrastructure this year, to try and make up for increases on the operations side of the budget.

"I look at this year as sort of a budget stabilization year. We've spent a lot of time over the past four years looking at ramping up our capital spending. We've added almost $12 million, Commisso said.

We won't be able to do that this year, because we've got other factors. We've got winter control. We've got things we've identified, [like] legal fees. We've got other costs increasing ... like utility costs ... diesel, gas costs.

Mayor Keith Hobbs said the decrease in funding was expected.

"Obviously the decrease in OMPF is a concern to municipalities, however we just received an increase in infrastructure funding from the province, so I'm not overly concerned. We did know this was coming so it is not a surprise."

Other communities with decreases include Greenstone, Kenora, Dryden and Marathon. The decrease in OMPF funding comes as the province absorbs more social services costs.

Nipigon is the exception. It's holding steady at the same figure as 2014.