17/10/2026
Asset Management Plans - The rest of the story
A lot has been said in this election about Asset Management Plans, and there are some people implying we don’t have one, which is false, or that ours is also being ignored, which is also false. They are crying that we have a significant gap or shortfall in our funding for the Asset Management Plan, which is true, and that the sky is falling in because of it, which is false.
So, what is an Asset Management Plan? The concept of an asset management plan came out of the Province’s response to the Walkerton Inquiry. It basically says that replacing and maintaining your critical infrastructure shouldn’t be a political decision based on how it affects your tax rate, but more of a regular routine decision that already has funding for it. The Province wants Municipalities to start saving for replacing its assets at the same time as paying for them in the first place.
Seems like a logical stream of thought, so why do we have a shortfall? For decades the Municipal tax rate has been based on a Capital Budget (these are things we need to fix or replace right now, sometimes with debt sometimes not), and an Operating Budget (this is how much we need every year to operate). Divide that amount of money between all the residences and business and that is how much we tax each household (that is over simplifying it but good enough for you to understand how an Asset Management Plan affects the tax rate).
An Asset Management Plan says that ok so now that you have replaced or fix something, now how are you going to pay for it the next time it needs to be fixed or replaced? So effectively, since this is a relatively new process, we would be paying for things twice for a considerable amount of time.
Now put this into a personal perspective. You are buying yourself your first house and you have stretched your finances to do so, and then the bank comes along and says you need to pay double so that when your house needs to be replaced, you have already saved up enough money to rebuild it. I think for the vast amount of people that would be unreasonable to expect. Same for Municipalities. Imagine what that would do to the tax rate if we had to pay for everything twice, now. There is not a single municipality in the Province of Ontario who has a fully funded Asset Management Plan and it will be decades before there are.
A requirement for a municipality to have an Asset Management Plan has only been around since 2015 and the deadline to have one has been 2025. If you do not have an Asset Management Plan you will not likely be eligible for any Provincial or Federal Grants. Strathroy-Caradoc has one and just received $14 M dollars for a Sewage Plant Upgrade at the Strathroy Plant so clearly, we are in the good books of the Province.
So how does an Asset Management Plan work? It looks at each piece of infrastructure and asks, ‘How long should this last?’. Everything from Vehicles, Playground equipment, water and sewer pipes under the streets, the road surfaces, sidewalks, arenas and fire stations. The Municipality owns a lot of different types of stuff and each one has a lifespan attached to it and therefore a replacement date.
So why is the sky not falling in if it is not fully funded? Because an Asset Management Plan speaks to everything being replaced at a theoretical time not necessarily when they need to be. A perfect example is the Mt Brydges Arena. According to its building assessment, it would have fallen in on itself by now and been non-operational. But with good operators and some regular maintenance it is still functioning.
So don’t let all this doom and gloom stuff make you think our municipality is in horrible condition because it is not. Is there stuff needing to be done? Absolutely. Are we neglecting critical infrastructure? No, we are not. Like every other municipality in Ontario we are working towards the Goals of the Asset Management Plan because they do make sense.
But if we did follow the advice of the doom and gloomers and try to fully fund the Asset Management Plan now everyone who owns a house or a piece of property would be broke from the increase in taxes that follows to fund it.