Peel dissolution will leave Brampton with $72 million deficit every year: new report

As the Ford government considers whether to reverse its decision to dissolve Peel Region, there is a new, yet-to-be-released report that shows breaking up Peel would have severe financial consequences for Brampton.

It is being described by CityNews’ source as “the messiest divorce you’ve ever seen.”

Brampton Mayor Patrick Brown has been publicly lobbying to try and stop the break up of Peel since it was first announced earlier this year by the province.

Last week, he released data from an updated Deloitte report that he maintains concludes if Peel were dissolved, property taxes would rise by 17 per cent in Mississauga, 34 per cent in Brampton and 256 per cent in Caledon.

For this new report, Brown hired KPMG to examine the consequences for Brampton. Using publicly available data, it concludes that if Brampton becomes an independent municipality, it would have a budget hole of nearly $72 million, every year.

Brown tells CityNews he hasn’t seen even seen the report yet.

“It does sound [like it] reflects what all the other reports reports have shown, which is taxes will skyrocket, costs will skyrocket,” he said.

He said once he receives the report himself, he plans to pass the information to the province. “Every piece of evidence shows this and confirms that this is the trainwreck we have shared with the province. I believe that the data is on the side of the argument I’ve been making and so I think the more transparency to the province on all this information is helpful.”

“There is no upside to splitting Peel,” said the CityNews source. CityNews is not identifying the source as they’re not authorized to speak on the matter.

“It is inevitable taxes would go up for all three. There is no way you can take shared resources, break it up and be more efficient,” the source added. “If there is a financial upside, it will take 50, 60, 70 years.”

It has led to a showdown between Peel Region mayors. Mississauga Mayor Bonnie Crombie, who is leaving the post after winning the Ontario Liberal leadership, is pushing for the dissolution of Peel to go forward. She argues her residents’ property taxes support the other two municipalities.

Mayor Crombie confirmed she had not yet seen the report so therefore could not comment on the details it contains, but added it had not been shared with or validated by the Transition Board, or any of the municipalities. “Another week, another report with unverifiable numbers.”

“This is all smoke and mirrors, designed to create chaos and sow doubt. That’s why it’s important that the Transition Board continue to do its work, with all municipalities involved,” said Crombie in a statement. “I ask Mayor Brown to stop with the politics and allow his staff and ours to continue with the good work they’re doing. There’s legislation in place and a process well underway and that needs to continue.”

She added Mississauga has been subsidizing Peel at over 60 per cent for 50 years now and said Brown “needs to get his financial house in order.”

“I think he’s afraid that opening his books might reveal a much bigger financial problem for the residents and taxpayers of Brampton.”

“No one wants to see taxes in any of our cities skyrocket as a result of dissolution. We can achieve a good deal for everyone, if we just let the process continue,” said Crombie in a statement.

Earlier this week, she also disputed Brown’s numbers from the Deloitte report. “No one has seen this report, it’s based on false premises.”

Caledon mayor Annette Groves has also urged the province to rethink its plan to dissolve Peel Region.

Peel Region’s acting Medical Officer of Health Dr. Kate Bingham expressed concern over the dissolution at a recent council meeting.

“It’s my professional opinion that it’s not possible to do this without significant risk to the community, and certainly not without significant disruptions on the current timeline,” said Dr. Bingham in the meeting.

“In order to even attempt this, we would need clear provincial direction as soon as possible and would need to reduce many services to entirely focus on our most critical, time-sensitive, functions.”

Dr. Bingham said the dissolution could impact children’s dental services, student immunizations, inspections and infection case management and she has a professional and ethical responsibility to call attention to the problems.

“I am being placed in a position where I am being asked to plan for a transition that I cannot endorse, and to hold professional and ethical responsibility for a process that I do not control, and that is not an emergency.”

The Regional Chair has passed along Dr. Bingham’s concerns to the transition board.

In the end, this is a provincial plan and the Ford government’s decision. The Ford government passed the Hazel McCallion Act in May, setting the dissolution process in motion.

McCallion, the former Mississauga mayor, lobbied for years before she died to sever Mississauga’s link to Brampton and Caledon. The source said the government moved too fast and didn’t assess the financial implications of dissolution.

The Progressive Conservatives may be realizing the same thing. Minister of Municipal Affairs Paul Calandra said this week he’s still making up his mind whether the split will go ahead. “I’ve made no decisions,” he said on Wednesday.

His words came after sources confirmed to CityNews that Ford had been reconsidering the dissolution plan.

The findings of the KPMG report put Premier Doug Ford in a bind as municipalities are not allowed to run deficits.

The dissolution of Peel is set to take place in January 2025. That means Mississauga, Brampton and Caledon would likely have to cut services, raise taxes significantly, or both, to make up the shortfall right before the provincial election in 2026.

“There is no way this government will let property owners shoulder a burden they couldn’t afford,” Calandra added.

Brown said he believes the province is listening. “I understand they’ve been shocked by the potential tax increases and reduce service levels. And so I do believe the flurry of evidence that is being presented to the province is having resonance.”

He says he’ll keep fighting until they walk the decision back, adding “it’s never the wrong time to do the right thing.”

The source believes it’s only a matter of time: “It’s a mess, everyone has their best interests in mind. The easiest thing for Ford is to pull the plug.”

CityNews has reached out to the Ford government and Crombie for comment on the report.

With files from Meredith Bond and Jessica Bruno