The Ford government is breaking up the Region of Peel, paving the way for Mississauga, Brampton and Caledon to become independent cities by 2025. But how will the dissolution affect each municipality? And will it have an effect on the housing market? Let’s unpack the effects of dissolving Peel Region on the housing market in Ontario.
Dissolving Peel Region: The Hazel McCallion Act
The Minister of Municipal Affairs and Housing (MAH), Steve Clark, tabled legislation – dubbed the Hazel McCallion Act – at Queen’s Park Thursday afternoon. As of Jan. 1, 2025, the Regional Municipality of Peel will be dissolved to make the municipalities of Mississauga, Brampton and Caledon independent in their own right. Clark announced in November that he would appoint facilitators to assess six regional governments, including Peel Region, with an eye to expanding “strong mayor” powers beyond Toronto and Ottawa. The other regions include Simcoe County, Durham Region, Halton Region, Niagara Region, Waterloo Region and York Region. Its role is to determine if each government is “relevant to the needs of its communities.”
Mississauga’s support of the Act
In 2019, Mississauga’s city council approved a motion to make it become, in principle, a “single-tier municipality, independent of the Region of Peel.” Current Mississauga Mayor, Bonnie Crombie, contends that separating from Peel will save Mississauga taxpayers about $1 billion over the next decade. Additionally, it will provide the city with control over its own “destiny,” like other large municipalities in Ontario. More than 800,000 of the 1.4 million people in Peel Region reside in Mississauga. Large portions of Mississauga’s property tax (roughly 45% of all taxes) helps make up the total for Peel Region. The rest is split between the City of Mississauga and the Ontario government to pay for education. The dissolution of Peel Region will mean the 45% would now be for services solely in Mississauga.
Reservations towards the Act
Much of Peel Region’s infrastructure, including water treatment plants, are in Mississauga. Emergency services, such as police, are also there, which is concerning for both the mayors of Brampton and Caledon. Brampton Mayor, Patrick Brown, has said that he approves the dissolving of Peel Region in order to streamline governance for his city. However, Brown also asserts that if Mississauga wants to dissolve the Region of Peel, the expense of doing so should fall on their shoulders. Brown contends that it will cost roughly $1-2 billion for Brampton to build infrastructure of its own.
Brampton and its mayor worry about the financial ramifications of the separation. “Economic development will grind to a halt, housing will grind to a halt, if we’re not made whole.” Brown has previously said that he welcomes efforts to remove duplication in local government in Peel Region. However, he has stated that his city will have to be “made whole” for the infrastructure its residents have helped fund in Mississauga.
Similarly, Caledon mayor, Annette Groves, tells reporters she didn’t want to leave Peel Region. Caught in the middle of the “divorce of Brampton and Mississauga”, Groves stipulates that the current arrangement works well. However, in January 2025, Mayor Groves and the city of Caledon will be independent, whether it’s their wish or not. It is responsible for only 5% of the tax revenue of Peel Region, but it makes up more than 50% of the land area. Ensuring that services reach all of Caledon is upmost in the mind of residents.
What will it mean to dissolve Peel Region?
Dissolving the Region of Peel by 2025 will not happen overnight. All three cities have been sharing core services and programs since 1974. While each city has its own members of government, Peel Region has an overarching council that helps govern economic growth and development.
The list of services in question is extensive, including:
- Paramedic services
- Health programs
- Long-term care and services for seniors
- Child-care support
- Garbage collection and recycling
- Water and water treatment
- Road maintenance
- Housing and shelter
It’s likely that each municipality will have to create the infrastructure to offer these services to their own residents. This is something that could be a timely and costly process. It’s also possible that some broad services, such as water treatment or police, could remain regionally operated.
Governmental and financial change
The Region of Peel also has a council consisting of 24 members with a Regional Chair. In addition, each municipality has a mayor and a city council. It is likely that the legislation being drafted will simply dissolve the regional council. This will leave each municipality’s council to conduct daily business. With the independence of the municipalities, the revenue from each will fund their own core services, as well as staff and programming. Currently, Brampton provides nearly 40% of tax revenue for the region, while Mississauga contributes 45% and Caledon, the remaining 5%.
At this time, it is unknown what the true financial ramifications of this change will be. All three municipalities contribute a significant amount of their revenue towards Peel Region, which goes towards paying for core services as well as staff and programming. According to a 2019 report by Deloitte, if Peel Region dissolves, “significant effort will be required” to negotiate division of service and assets. It’s unclear what the financial effect will be for Caledon, who makes up about 56% of the land area of Peel Region, after dissolution.
A transition board, appointed by MAH Steve Clark, of up to five people will be set up sometime this year to oversee the dissolution process. These members will have expertise in labour, governance and finance. Officials say they will make recommendations in summer or fall of 2024. At that time, the province may introduce further legislation to address any other issues.
Some areas of analysis include:
- Labour relations
- Disentangling of regional services
- Property tax arrangements
- Financial sustainability
The board will also oversee financial decisions of all three municipalities. Although, it is unclear how much power they will have to interfere in city decision-making.
Effects of dissolving Peel Region on the housing market in Ontario
The Ford government is using boosting housing supply as a primary justification for splitting up Peel, noting that housing in 2022 increased by nearly nine percent. Brampton has been experiencing some of the fastest-growing annual rent increases due to high levels of immigration. Brampton saw a 29.1% increase in rent prices over the past year. Mississauga’s mayor echoes these sentiments in her recent statements supporting the move. “An independent Mississauga will allow us to be more nimble when it comes to responding to the housing crisis, increase efficiencies, reduce duplication, and save residents time and money,” states Crombie.
Minister Clark contends the objective of the dissolution legislation is to support future population growth, reduce duplication and see more housing built. He has committed to getting 1.5 million homes built in Ontario in 10 years, but is not yet hitting the annual targets needed to achieve that. In a statement to the media, Minister Clark called the proposed legislation a “historic initiative” that will ensure that Mississauga, Brampton, and Caledon “have the tools that they need to support future population and housing growth.” All while respecting the individual priorities and characteristics of each municipality.
The municipalities of the Region of Peel currently serve approximately 1.5 million residents, a number expected to rise to over 2 million by 2041!
It is possible the provincial government could dissolve the other regional governments listed above as part of this process. However, Clark stresses that if other mayors of these municipalities want change, they should speak out publicly. “My head is spinning at how complex this is going to be to untie this particular knot,” Zachary Spicer, an associate professor with York University and a former MAH staff member, told CityNews in response to the move. “Today is the beginning of a very long journey to begin to sort of untangle what is a very complex and historic mix of services and financing and everything else,” Spicer says.
For more information about the current housing market situation in Ontario, have a look at some of isure’s articles below.