The cost of public health is on the rise as the Simcoe Muskoka District Health Unit (SMDHU) responds to the COVID-19 pandemic, Muskoka District council heard at both its August 9 and August 26 meetings.
In February 2021, the board of the health unit asked the Ontario Ministry of Health for $9.5 million in one-time, extraordinary funding as a result of its COVID-19 response, such as vaccination clinics, contact tracing, and education.
The province responded on August 6, 2021, with $4.4 million, just under half of the requested amount. If it doesn’t get any more funds, health unit representatives told District council that not only will it have a $5-million projected deficit, but come this fall it’ll have a cash flow problem as well.
On August 9, District council was asked to join the other municipalities SMDHU represents by passing a resolution allowing the public health organization to access a line of credit with TD Canada Trust. They said the line of credit would give the health unit cash flow at least until the province provides more public health dollars for extraordinary expenses related to COVID.
At the meeting, District chair John Klinck asked the two Muskoka councillors who sit on the board of the SMDHU (District and Georgian Bay councillor Peter Koetsier and District and Gravenhurst councillor Sandy Cairns) to comment on the situation.
Koetsier said the SMDHU is not the only health unit being affected. “Currently most health units are facing this where the province instructed them to go out and conduct these vaccine clinics, to conduct all the work that they’ve been doing over the last 17, 18 months now in regard to this pandemic, and yet the province is refusing to pay the bill, even though they instructed the health boards to do all the work.”
He said optimistically, it’s just a timing issue although “the province seems to be drifting towards let’s burden the property owner versus the income earner,” said Koetsier. “The Crown’s biggest obligation is health, and they would rather shirk it so that they don’t have to spend as much money. I am confident that they will eventually come through and pay the bill in this case but unfortunately the way the law is written the health unit cannot borrow money without the approval of the municipalities that the health unit is supporting.”
Cairns said she believes the province will provide the funding. “It’s just a matter of getting everything together and I’m being very positive and hopeful that the funding will come through,” she said.
If the health unit borrows the funds and the provincial funding does not materialize, the likely scenario is that each member municipality – the District of Muskoka, County of Simcoe, City of Barrie, and City of Orillia – would have to pay a proportional share. For Muskoka, that would represent about $840,000.
To put that into perspective, District staff told council the board of SMDHU approved a base budget of $36.6 million for 2021. That represents a total municipal levy of about $9.2 million (an increase of 1.95 per cent over the 2020 levy). The District’s share of the levy is approximately $1.5 million, which is allocated based on population and assessment in accordance with the Health Protection and Promotion Act, according to a report compiled by District commissioner of finance and corporate services Suzanne Olimer and District CAO Julie Stevens.
Many around the District council table expressed concern about getting stuck with the bill related to extraordinary costs due to COVID, while also noting the importance of being able to respond to the ever-evolving situation.
“For the province to turn its back on any health unit in Ontario at this time, in times of a pandemic, is absolutely absurd. Particularly with an election less than one year away,” said Klinck.
Council postponed a decision on the matter at its August 9 meeting and it was brought back to a special council meeting held on August 26.
At that meeting, SMDHU staff and board representatives were present.
SMDHU medical officer of health Dr. Charles Gardner told council accessing a line of credit while SMDHU waits for more funding is absolutely necessary for the public health organization.
“It was very helpful from the province that they gave us just under half of what was asked for and so the cashflow crisis that would occur was put off a bit in time but will still occur later in the fall if the province doesn’t proceed with the provision of more funding. And so the line of credit will be needed as a way of addressing that if the province is slower than what we would need them to be,” he said.
SMDHU is funded through provincial grants and a cost-sharing agreement between the municipalities it represents.
The District pays about 16 per cent of the municipal cost, said Stevens.
“This is a very unusual ask but we feel that we need this protection of the $5 million. We may need to access those dollars prior to getting the rest of our funding from the province. They have certainly given us 48 per cent of the $9 million, but we are experiencing a lot of cost and now with the possibility of a fourth wave. We were beginning to think that we may be able to lay off staff [who]are in a contract basis but now that is kind of all up in the air,” said SMDHU board chair and mayor of Penetanguishene Anita Dubeau. “So certainly we’ve had three of our funding partners who have agreed to support this ask,” she said, adding that she hoped the District would follow suit.
In terms of financial oversight, Olimer reminded council that two Muskoka councillors sit on the board of SMDHU, which approves health unit budgets.
In the end, councillors thanked SMDHU and its board for their work against COVID and agreed to pass a resolution thereby joining SMDHU’s other member municipalities, enabling the public health organization to access a line of credit of up to $5 million. They also indicated the District would continue to lobby the province to provide more funding dollars not just for public health but health care in general.
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