Council declines Mississauga City Hall contribution for new hospital; Trillium will have to cover $1.5B local share

Citing the stress that would be created for local taxpayers and concerns about the fairness of paying for a healthcare facility that will also be used by residents from outside Mississauga, council members have decided not to contribute money for one of the largest hospitals in North America, which is slated for construction in the heart of the city.

Trillium Health Partners, which made the request earlier this month, will now have to ask the Province for more funding, or increase its own contribution to cover the entire $1.5 billion for the local share that the PCs have asked for.

Trillium, the hospital network responsible for Mississauga’s two hospitals and the Queensway Health Centre in Etobicoke, asked the City of Mississauga to pony up $450 million as part of the $1.5 billion needed to fulfill Trillium’s “local share” responsibility outlined by the Province for the transformation of Mississauga Hospital, which will be triple the size of the current facility. 

City Council unanimously approved a motion on Wednesday to decline the request over concerns that an unfair burden would be placed on the city’s property taxpayers. It is an ask Karli Farrow, president and CEO of Trillium, told officials needed to be finalized by December to trigger construction this coming spring. A staff report on the October 23 meeting agenda and deferred to this week reiterated that Trillium “must secure the municipal contribution” to “proceed with the hospital construction.”

Even though the City has declined to financially support the project, Trillium is still responsible under the local share plan. The municipal government is often expected to provide half the local share but Trillium only asked for a little less than a third.

A spokesperson with Trillium explained in an email that, “On a per capita basis, our funding request is below the median when compared to other municipal contributions for large-scale health care infrastructure projects. The size of the request is a result of this being the largest health infrastructure investment, by the Government of Ontario, in the province’s history.”

“The local share is a standard and important part of the process for larger health care infrastructure projects like ours. We have received Council’s decision and will be reviewing our next steps,” the spokesperson wrote. “We will continue working with all our partners and we are confident we can make this generational infrastructure project a reality.” Trillium would not comment on how council’s decision will impact the project’s timeline. It also remains unclear how the organization will come up with the $1.5 billion on its own.

THP has already committed $330 million of the approximately $1.5 billion local share, while community donors have provided $260 million and the organization will put another $498 million in revenues toward the total, leaving Mississauga taxpayers to cover the remaining $450 million. Last week’s staff report laid out four options, three included contributions ($450 million, $300 million or $150 million). The outlier was option four: to not contribute at all, which Mayor Carolyn Parrish had already publicly stated was her preferred choice.

Rather than discussing how council wished to proceed with the options presented last week, Councillor Brad Butt requested council defer the matter to today’s meeting to allow for a motion to be brought forward requesting council deny the contribution request altogether. The motion pointed out that as the revitalized Mississauga Hospital will be a regional facility, “Mississauga suggests the Province waive the requirement for the City of Mississauga to contribute to the local share, and the Province contribute a larger amount to this project.”

“As much as, in a perfect world, I would’ve liked us to be supportive but I just do not believe we’re in the fiscal position to be able to do that,” Councillor Butt told The Pointer ahead of the vote. “It's complex. This is a very big ask of the property taxpayers of the City of Mississauga.” 

Even with the most cost effective method, Butt pointed out it would ultimately lead to decades of property tax increases. The most viable option presented in the staff report would see property owners pay an extra $12 a year for 23 years, on a home assessed at $730,000 using a combination of a fixed six-year special levy on the property tax bill and an additional 17 years of levy continuance to pay for a municipal debenture with an average borrowing rate of 3.75 percent.

“That’s just future property tax increases down the road. You either pay now or you pay later,” he said. “Even if you look at those models and you look at how they’re stretched out over many, many years, that means [council is] going to be committing property tax increases to people for the next 20 years to pay back money that we borrowed.”

His characterization is somewhat muddy. Taxpayers would see one increase, which would then be baked into their property tax each year at the same rate over 23 years, so for an average home assessed at $730,000, residential property owners would pay $276 dollars in total over that period, or $12 extra each year, to cover the entire $450 million plus the interest for the loan.

Councillor Brad Butt presented a motion on Wednesday requesting Mississauga decline contributing to the Mississauga Hospital rebuild. The motion passed unanimously.

(Alexis Wright/The Pointer Files) 

According to Wednesday’s motion the $1.5 billion local share is the largest amount requested of any municipality in Ontario and the $450 million is approximately 42 percent higher than the average recent local share request approved by other municipalities in the province. 

"This is a hospital in Mississauga but it will serve not only the region but the GTA and the GTHA and the Province of Ontario… so to put this on Mississauga property tax base, on Mississauga taxpayers isn’t fair to our taxpayers… and this is a provincial responsibility,” Councillor Matt Mahoney, who previously told The Pointer he had “serious concerns” asking taxpayers to pay for the rebuild, said during Wednesday’s meeting. “This certainly isn’t something that we as a council have taken lightly and we’ve put a lot of thought to this.” 

Ahead of the meeting, several councillors, as well as the Mayor, said while they acknowledged the need for the hospital, they were not in favour of Mississauga’s residents subsidizing a regional hospital. They maintained that healthcare is a provincial responsibility and should be funded as such.

“The new hospital will be a great asset to the city that will serve generations of Mississaugans,” Councillor Joe Horneck said in an email last week. “However, given that it will also be a Province leading facility for Children and Women’s health, it will also service many people from outside the city. This makes the community contribution solely funded by the city taxpayers a non-starter for me.”

It’s unclear if the narrative of council members is part of a negotiation tactic or if they will remain firm in their position that local taxpayers—who contribute to the local share requirement for hospital projects in their towns and cities across most of the province—in Mississauga should be given special treatment, for a hospital that will clearly serve the city’s residents far more than those of any other municipality overall.  

Residents are already looking at significant pressures on their property tax bill in 2025 with upcoming budgets, Butt pointed out. The City of Mississauga’s budget for 2025 was released yesterday, proposing a 2.7 percent increase on the residential tax bill just for the lower-tier portion, an increase from the 2.3 that was approved for 2024. That is before considering the tax increase for the Region of Peel’s budget for the year ahead. A previous motion from Butt, which requested greater financial support from the Province, also highlighted that of the $868 million provincial shortfall in social service funding that has been identified by the Region of Peel, Mississauga’s gap is almost half a billion dollars.

But the Province does not appear to be budging on any assistance with the local share requirement for the hospital. A spokesperson previously told The Pointer, “the Province will be funding the project through the agreed share amount as is the case with every single other hospital development across the province.”

A rendering of the Mississauga Hospital redevelopment project, which is expected to be completed by 2033 and will service 1.7 million residents.

(Trillium Health Partners)  

Under the provincial government’s Hospital Capital Planning and Policy Manual, which establishes a framework for managing capital funding in the hospital sector, it outlines that while municipal contributions can be included within a local share plan, the onus falls on the hospital management organization (Trillium in this case) to ensure it “has a sound financial plan to manage its local share obligations,” which can vary depending on the size and scope of the project. The document adds that, “For any uncertain funding sources such as fundraising or revenue forecasts, the hospital must provide a contingency plan as part of its [local share plan] submission,” meaning Trillium will now be on the hook to cover the outstanding costs required for the local share.

But there appears to be a discrepancy between the cost share agreement outlined by the Province and what Trillium has communicated.  

With the local share pegged at $1.5 billion, it remains unclear what the total cost of the project will now be. A market update from Infrastructure Ontario in June 2021 said the Trillium investment would be for as much as $3 billion, but if 15 to 25 percent of the project cost is expected to be covered from the local share commitment of approximately $1.5 billion, this would mean the total cost would be at least $6 billion, assuming the 25 percent figure, or more if the local share is only 15 percent of the total cost. Trillium and the provincial government have not released detailed cost figures for the project.

The City of Toronto has traditionally not been asked to cover costs associated with a local share requirement. The expansion of the Queensway Health Centre in Etobicoke (in Toronto’s west end) which is part of Trillium’s broader redevelopment vision, was funded entirely by the Province and through the organization’s fundraising efforts. It has raised concern among councillors about fairness and the burden that Mississauga’s taxpayers have been asked to shoulder.

Farrow previously told council Trillium is “moving forward with the government to ideally achieve financial close by February,” and that once the financial plans are finalized, the organization would have shovels in the ground by the spring, but it is unclear how this latest setback will disrupt the project’s timeline. Consultation is expected to take eight years before the transformative, state-of-the-art, hospital is opened.

“The project is currently in the Development Phase where design, schedule and pricing are being finalized,” a Trillium spokesperson told The Pointer on Wednesday. “Once this phase is complete in 2025, Trillium Health Partners will enter into a fixed-price Project Agreement at which point the final cost will be released publicly.”

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Twitter: @mcpaigepeacock

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