January 27, 2012

Media Release North Bay, ON - The North Bay & District Chamber of Commerce has been following the City budget deliberations closely and we were pleased to have City staff and council representatives present their process at our last board meeting. At that time, there were still a few budgets that were estimated as some of the agencies, boards and commissions still had to approve their budgets for 2012 at their own boards, prior to bringing them forward to council. City Council and staff are well aware that the Chamber is still not comfortable with the 2.97% tax increase that was announced at our board meeting. President Strang stressed that the economy is still volatile and while Canada has seemed to weather better than most of the world, economists are only seeing a slight improvement in Canadas economy over the next few years. Council has been cautioned that they are using statistics of the Consumer Price Index (CPI) that was around 2.9 % last November as the rationale; however, the core CPI is much lower, in fact as of December 2011, the CPI was 2.3% with the core CPI at 1.9%. President Strang stated the reality for businesses at this time is that their ability to pay is becoming even more strenuous on their operations. A good example recently was the North Bay Parry Sound District Health Unit, which the City estimated at a 3% increase in this years draft budget, however this is not the case, in fact just in the past two years, the Health Units budget has increased by 11.38% in the total sharable base which is then split between the province and the municipalities in this district. President John Strang noted we were aware that it went back for review last week to find cost savings, and yet they rejected reductions that were discussed in the review, and are now taking reserves to lower the impact a little. I was always with the understanding that the reserves would be used only in a public health care crisis, not to lower the impact of the taxes, especially when there were recommended reductions that could have been approved. The City is still awaiting a few more budgets that could seriously impact the municipal tax increase and these include Cassellholme, the Fire Departments wage increase, and of course the provinces contribution from the Ontario Municipal Partnership Fund. President Strang quoted Im not sure what
it is going to take for organizations to understand they cannot continue to keep increasing their costs in this economic environment. The Province is still waiting for the Drummond report and it is well known that the Provincial Government will need to make cuts soon; in some cases estimated by 10% in some ministries and programs. The Federal Government is also recommending changes in their budget and most recently changes that will be coming to the Canada Pension system, as they too recognize we cannot continue to go down the same path and survive. We understand that budgeting is a difficult process, especially when speaking in multi-millions of dollars; however the reality is, we all need to tighten our belt and understand that we arent asking to cut services,

1375 Seymour Street, North Bay, ON P1B 9V6 Tel: 705 472-8480 Fax: 705 472-8027 northbaychamber.com

yet use money wisely and in more efficient and transparent ways. Employees receiving 2.6% and 3% wage increases for multiple years should also understand, that if cuts are coming, it could mean a reduction in employees, rather than all employees remaining at a more reasonable increase in this volatile economic environment that we have been facing over the past two years and a few more years to come. Council has always stressed that wages and benefits are the bulk of their budget and there are not many other areas to cut, all efficiencies have been found. To avoid making any cuts to services, council ultimately needs to increase the taxes to cover the increases in wages and benefits, however President Strang noted there arent many employees in the private sector receiving large increases nowadays, as they recognize that the companies costs are going up and there needs to be some negotiation for more appropriate increases that are reflective of the current economy and forecasts in the future. Media Contact: President John Strang 705-497-7777 work 705-845-8899 cell

1375 Seymour Street, North Bay, ON P1B 9V6 Tel: 705 472-8480 Fax: 705 472-8027 northbaychamber.com