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EOWC Resolution 2026-05: Building Ontario Together: HST Reinvestment for Municipal Infrastructure

Date: August 13, 2026

Moved by: Warden Jennifer Murphy, County of Renfrew

Seconded by: Warden Corinna Smith-Gatcke, United Counties of Leeds and Grenville

WHEREAS Ontario municipalities are responsible for delivering and maintaining the critical infrastructure that supports economic growth, housing, public safety, and quality of life, including roads, bridges, water and wastewater systems, transit, emergency services, and community facilities; and

WHEREAS municipalities continue to face increasing financial pressures resulting from aging infrastructure, population growth, inflation, climate resilience needs, and the Ontario Government’s housing objectives, while relying primarily on property taxes and user fees as their principal sources of revenue; and

WHEREAS unlike businesses, municipalities generally cannot recover Harmonized Sales Tax (HST) through Input Tax Credits because most municipal services are exempt under the Excise Tax Act, and instead receive Public Service Body rebates; and

WHEREAS municipalities currently receive a 100% rebate of the federal 5% portion of the HST, but only a 78% rebate of Ontario’s 8% provincial portion, resulting in municipalities permanently absorbing the remaining 22% of the provincial share, equivalent to 1.76% of eligible municipal expenditures; and

WHEREAS this unrecoverable provincial HST represents millions of dollars annually that could otherwise be reinvested into local infrastructure, housing-enabling infrastructure, asset management, and essential municipal services; and

WHEREAS returning the remaining provincial portion of the HST to municipalities would not increase taxes for residents or businesses, or require new provincial grant programs, while providing a stable predictable, and growth responsive source of infrastructure funding that automatically increases as municipalities invest in their communities; and

WHEREAS a full provincial HST rebate would reduce red-tape and administrative burden for both municipalities and the Province by simplifying the existing Public Service Body rebate process and reducing compliance complexity; and

WHEREAS the Government of Ontario has identified housing supply, housing-enabling infrastructure, economic competitiveness, and reducing administrative burden as provincial priorities, and returning the remaining provincial portion of the HST to municipalities would directly advance each of these objectives by providing municipalities with flexible, locally controlled infrastructure funding through an existing tax mechanism; and

WHEREAS strengthening municipal fiscal sustainability is essential to ensuring all municipalities, small and big, can continue to partner with the Province in building and maintaining infrastructure necessary to support Ontario’s growing communities and long-term economic prosperity;

NOW THEREFORE BE IT RESOLVED THAT the Eastern Ontario Wardens’ Caucus call upon the Government of Ontario to increase the municipal Public Service Body rebate for the provincial portion of the Harmonized Sales Tax from 78% to 100%, thereby eliminating the current 1.76% unrecoverable provincial HST cost borne by municipalities.

AND BE IT FURTHER RESOLVED THAT the Government of Ontario recognize this measure as a fiscally responsible investment that would provide municipalities with a sustainable, predictable, and growth-responsive source of revenue to support infrastructure renewal, housing-enabling infrastructure, long-term asset management, and essential municipal services while reducing pressure on local property taxpayers and businesses.

AND BE IT FURTHER RESOLVED THAT the Government of Ontario engage with municipal organizations, including the Eastern Ontario Wardens’ Caucus, the Western Ontario Wardens’ Caucus, the Association of Municipalities of Ontario (AMO), the Rural Ontario Municipal Association (ROMA), and municipal finance professionals to evaluate implementation options for increasing the municipal Public Service Body rebate for the provincial portion of the HST to 100%.

AND BE IT FURTHER RESOLVED THAT the Province recognize that enhancing the municipal HST rebate represents a simpler and more efficient approach to supporting municipal infrastructure than establishing new application-based funding programs, while reducing administrative burden for both municipalities and the Province.

AND BE IT FURTHER RESOLVED THAT copies of this resolution be forwarded to: