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Almaguin communities balk at hospital funding formula

'This is a troubling aspect of the local share funding formula and we're going to keep fighting it. This is an example of an urban formula that doesn't work in a rural setting'
Armour Mayor Rod Ward expects some Almaguin municipalities to object to their share to build new hospitals in Huntsville and Bracebridge. Ward is hopeful that the Alamguin town councils can make a reasonable contribution so the project can move ahead.

Twelve communities in Almaguin Highlands are facing tremendous costs after learning their share to help build two new hospitals in Bracebridge and Huntsville has soared.

The massive twin build has gone from $561 million in March of 2019 to a projected cost of $722 million based on figures from last September and may further jump to $967 million.

While the Ontario Government would pay for the majority of the project, Bracebridge and Huntsville in addition to nearby municipalities in Muskoka plus the 12 Almaguin communities are required to ante up a local share.

Based on the $967 million figure, the municipal share to all the municipalities is $225 million.

However, Rod Ward, the Mayor of Armour who also chairs the Almaguin Highlands Health Council and represents the Almaguin communities at the hospital discussions, says the $225 million local share will be cut in half.

Ward says this is because the area's hospital foundations are expected to cover 30 per cent of the municipal share accounting for $67.5 million dollars and a further 20 per cent will be paid for by Muskoka Algonquin Healthcare which takes another $45 million off the total municipal share for a final local share of about $112.5 million.

Of this $112.5 million, the share for the 12 Almaguin communities is about 10 per cent or about $11.25 million

Ward says Huntsville and Bracebridge are paying the lion's share of the local share because both communities will benefit from the economic dollars the hospitals will generate.

Ward says the entire local share is as high as it is because the Ministry of Health only covers the hospital construction costs.

He says 90 per cent of the builds are covered by the Ontario Government leaving 10 per cent for the municipalities who also have to pay 100 per cent of the hospital equipment.

Ward says when all the math is done, the catchment area municipalities are responsible for 23 percent of the overall project. Ward says it's the Ministry of Health that determined the local share of the project and the rural municipalities are pushing back on the funding formula.

“This is an example of an urban formula that doesn't work in a rural setting,” said Ward.

In contrast, Ward said the local share of the proposed South Niagara Hospital project runs about $212 million which isn't far off from the $225 municipal share for this region.

But Ward says that's where the similarity ends. Ward says at most, the entire catchment area for the two northern hospitals has a population of 70,000 to 80,000 people.

But the Niagara hospital project will serve Niagara Falls, Welland, Fort Erie and Port Colborne taking the population count well into the hundreds of thousands making it easier to spread the cost of the local share because there are more people to tax.

“This is a troubling aspect of the local share funding formula and we're going to keep fighting it,” Ward said.

In attempting to arrive at what each Almaguin community will contribute as its share to the hospital projects, Ward based the contributions on assessments. However this approach has resulted in very large differences over what each  Almaguin municipality pays because the total assessed values of the properties differ by hundreds of millions of dollars regardless of population.

For example, the assessed value for all properties in the Municipality of Magnetawan in 2021 was nearly $712 million and it topped the list for highest total assessments among the 12 Almaguin communities.

The Township of Joly had the lowest total assessment in 2021 at nearly $62 million while the Village of South River had the next lowest at $71.5 million followed by the Village of Burk's Falls at almost $82 million.

Because total assessments were used to arrive at each municipality's local share, Magnetawan (population 1,753) will pay the most as its share which is $2.45 million over 12 years.

Joly (population 293) is being asked to pay $213,750 also over 12 years and this represents the least amount among the Almaguin communities.

South River's share is the next lowest at $247,500 and the Village has a population of 1,101.

With a population of 957 people, Burk's Falls' share is third lowest at $281,250.

All the population counts are from the 2021 Census.

Ward told the Nugget he fully expects Almaguin councils to question their respective contributions adding “we're expecting to have these difficult conversations”. In anticipation of loud objections to their local share and an ability to pay, Ward said “we only ask that they contribute what they can afford.”

Over the next several weeks the Almaguin town councils will be debating the hospital projects and what they are expected to contribute.

But as the councils prepare to debate this issue, Ward asked the Almaguin Mayors to keep another point in mind.

He says if the municipalities in the catchment area, including those in the Bracebridge and Huntsville area, can't commit to the local share by this fall, then the hospital builds are off.

“This project goes to the bottom of the pile and we won't hear about a new hospital project for a very long time,” Ward said.

Ward said if that happens then the existing hospitals will need costly renovations at some point because of their age. Ward says there are benefits to having a hospital that isn't antiquated. Chief among them is newer facilities that make it easier to attract and retain healthcare professionals and physicians.

“And if you want population growth, you need access to quality health care otherwise some of your residents may move away,” he said.

Ward said if the Almaguin communities come up with their share, then 20 per cent of what the Almaguin municipalities contribute will be redirected to the health centre in Burk's Falls and the remaining 80 per cent to the hospitals in Bracebridge and Huntsville.

Armour council kick-started the Almaguin hospital drive by unanimously approving its share of the twin builds by donating $1.3 million over 12 years.

The Township of McMurrich/Monteith town council has also agreed to put up its full share of $798,750 to build both hospitals.

To date, these are the only two municipal councils that have passed resolutions agreeing to their respective shares.

Breaking down the other Almaguin portions, Perry is being asked to contribute nearly $1.7 million, Kearney is being tapped for a $1.3 million donation, Strong is looking at a bill of just more than $1 million, the ask from Machar is $911,250,  Ryerson's contribution is $663,750 and a request for $360,000 is being made of Sundridge.

All the contributions are over 12 years.

Two hospitals are proposed for the region because each will have different areas of service and specialties.

Rocco Frangione is a Local Journalism Initiative reporter who works out of the North Bay Nugget. The Local Journalism Initiative is funded by the Government of Canada.