Rural areas are important areas for all levels of government. The problem politicians at all levels do not grasp the issues facing rural areas.

1. RURAL
AFFAIRS|CANADA|JUNE 2019
BY: PAUL YOUNG, CPA, CGA
DATE: JUNE 28, 2019

2. PAUL YOUNG - BIO
• CPA, CGA (1996)
• Financial Solutions (FOPM/FPM)
• SME – Risk Management
• SME – Close, Consolidate and
Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Advance Technology and
Market Entry
• SME – Supply Chain Management
• SME – Business Strategy and
Restructuring
Contact information:
Paul_Young_CGA@Hotmail.com

3. INTRODUCTION
• Rural areas are important areas for all levels of government.
The problem politicians at all levels do not grasp the issues
facing rural areas.

4. AGENDA
• Accounting and Reporting Challenges
• Issues facing Municipalities and Cities
• Capital Spending
• Revenue sources
• Funding/Infrastructure
• Compensation
• Pensions
• Water Act (Regulation)
• Green act
• Downloading
• Arbitration issues
• Blog Infrastructure
• Blog – Rural Municipalities vs Large urban municipalties.

5. INTRODUCTORY
• Municipal government exist to provide programs and services at the
municipal level.
• Approximately 98% of taxation comes from the following areas
• Property Taxes
• User Fees
• Municipal government is responsible for the following areas
• Emergency Services (Fire and Police)
• Infrastructure (Roads, Bridges, Sewer, Water Treatment and lighting, etc)
• Parks and Recreation (pools, parks, arenas, etc)
• Other areas

6. RURAL AFFAIRS
Source - https://www.cbc.ca/news/politics/liberal-
cabinet-shuffle-2019-1.4976936
• Bulk of rural areas is supported by both
govt and small business. Liberals decided
to make changes to small business
taxation -
https://www.slideshare.net/paulyoungcg
a/small-business-is-under-attack-by-
government-canada-january-2019
• Rural areas are facing labor shortage as
well as high cost of living (hydro rates,
housing costs, etc -
https://www.slideshare.net/paulyoungcg
a/2019-career-management-canada-
january-2019
• Liberals have increased taxes to 92% of
the middle class -
https://torontosun.com/news/national/9
2-of-middle-class-families-face-tax-
hike-over-2200-beginning-in-2019-
fraser-institute
• Rural areas seldom vote liberal
• The Liberal statement by Jordan is just
fluff

7. REPORTING CHALLENGES / PUBLIC SECTOR

8. FINANCIAL REPORTING / CHALLENGES
• Public Sector Accounting Reporting
• Financial Statements
• Keeping up-to-date with the standards
• Internal Audit and Controls
• SORP Reporting
• Fixed Assets
• Cash Flow
• Debt
• Effectiveness of program spending

9. HOTTEST TECHNOLOGY
Source – Next big Future – March 6, 2017

10. HOTTEST TECHNOLOGY
Source – Next big Future – March 6, 2017

11. MARKET SIZE / POTENTIAL
Source – Next big Future – March 6, 2017

12. CAN AI REALLY CREATE 800,000+ JOBS BY 2021?
THIS REPORT SAYS YES
• http://www.techrepublic.com/article/can-ai-really-create-800000-jobs-by-2021-this-report-says-
yes/?ftag=TREe01923b&bhid=23321323188161054569322732153870
New research from IDC, released by Salesforce, claims that
artificial intelligence (AI) will create 823,734 jobs by the year
2021, surpassing the number of jobs lost to AI technologies
such as machine learning and automation. Additionally, the
report predicted that AI will increase global business
revenues by $1.1 trillion in the same time frame.
The two statistics mentioned above will both come about as
a result of "efficiencies driven by AI in CRM," the report
found. And, if one includes indirect obs, the number of jobs
added by AI jumps to 2 million. "This is a net-positive figure
in that it includes an estimate of jobs lost to automation
from AI," according to the report.

13. ACCOUNTING SYSTEMS – AI AND REPORTING
Tools/Financial
• ETL (Datawatch)
• Analytics (OLAP,
add-ins, data
warehouse,
Microsoft Excel
AI and Finance
• Analysis Credit Reporting and Accounts
Receivable
• Analysis Inventory reporting (trends)
• Liabilities/asset testing (pensions,
environmental, drug trials, capital asset
utilization, supply chain (risk analytics,
financial stress testing, automation internal
audit procedures (test/analysis)
• Key market trends/Sales
• Assessing program spending
• Internal Controls / Procurement

14. AI AND OFFICE OF FINANCE
• Office of Finance is part of business decisions (finance and cost)
• Many business process could be automated (Big Data => analyzed
=> Management Reports)
• Accounting Systems have over time reduced the need for manual
input (automation of processes)
• Storing the rules (accounting, tax, pricing, etc.) and then crunch the
big data as part of analyzing the business
• Cost controls (Internal Audit, cybersecurity, approval processes)

15. OTHER SOURCES
• Close, Consolidate and Reporting Process -
https://www.slideshare.net/paulyoungcga/close-consolidate-and-
reporting-cfo-and-office-of-finance
• Internal Audit - https://www.slideshare.net/paulyoungcga/artificial-
intelligence-ai-with-value-for-money-auditing
• Internal audit/Automation -
https://www.slideshare.net/paulyoungcga/internal-audits-automated-
solutions-office-of-finance-and-cfo
• IBM and AI - https://www.ibm.com/watson/
• Reporting Challenges for Business -
https://www.slideshare.net/paulyoungcga/reporting-challenges-for-
accounting-and-finance-january-2017

16. OPERATIONAL ISSUES

17. • Here are key issues facing the cities
• Development fees are drying up due to lack of land available for development
• Arbitration – OPP settlements have put pressure on municipal budgets due to matching of
those settlements. OPP Costs - http://www.durhamregion.com/news-story/4414447-
municipalities-pushing-back-against-opp-costs/ or Arbitration -
http://www.thestar.com/opinion/editorialopinion/2012/02/28/ontario_municipalities_struggl
e_with_cost_of_essential_services.html or http://www.parrysound.com/news-story/5447183-
new-opp-billing-model-angers-municipalities/ or
https://ca.news.yahoo.com/blogs/dailybrew/are-police-officers-getting-paid-too-much-
174554130.html
• OMERS – OMERS is underfunded as such the municipalities will be part of the pension solution
http://www.omers.com/corporate/news_article.aspx?newsid=7000
• Transportation – Why are you not pushing Ontario Government for an integrated solution for
transit including using GO with TTC as well as other Transit systems to help move people
around the city?
http://www.metrolinx.com/en/docs/pdf/board_agenda/20140905/20140905_BoardMtg_PPI_
Report_EN.pdf
• Size of Government – You increased your staff budget when other parts of the economy have
either cut or reduced their costs. You have asked other departments to cut, but you grew your

18. CAPITAL SPENDING
https://www.fraserinstitute.org/sites/default/files/myths-of-
infrastructure-spending-in-canada.pdf
Commentary
• 1993-2006 the
liberals were the
ruling government
• 2006-2015 the CPC
were the ruling
Government
• CPC introduced both
the Gas Tax and
Build Canada Funds

19. GOVERNMENT SPENDING

20. GAS TAX FUND

21. BUILD CANADA FUND

22. FEDERAL GOVERNMENT SPENDING ON
INFRASTRUCTURE

23. FEDERAL GOVERNMENT SPENDING ON
INFRASTRUCTURE

24. COMPENSATION
http://www.cfib-fcei.ca/english/article/7114-
public-sector-workers-earn-more-work-less.html

25. DOWNLOADING
T here are a range of ways this happens, but some of the most common forms of
senior government downloading include:
• Direct offloading of federal or provincial programs and/or responsibilities without
adequate funding or revenue tools;
• Regulatory changes that require spending by municipalities.
• Enforcement of federal and provincial regulations;
• Cancellation of programs and services that are needed or expected by the public;
• Reduction or cancellation of senior government transfers or program funding;
• Programs that are paid for municipally, but where municipalities have little control
over costs;
• Grant-based or 'one time only' funding of downloaded or new programs
encouraged by senior governments;
• Underinvestment by senior governments in infrastructure maintenance, renewal
and replacement; and Failure to adequately address issues or problems that should
fall under provincial or federal jurisdiction
Source: http://thetyee.ca/Opinion/2014/09/24/Downloading-Steamrolls-Cities/ or
http://rabble.ca/blogs/bloggers/municipal-matters/2014/09/municipalities-
struggle-to-cover-costs-federal-and-provinci

26. PENSION FUNDING
Funding of pensions is becoming an issue for many cities/municipalities. The latest to come forward has been the city of Houston
- http://www.click2houston.com/news/mayor-turner-to-announce-historic-pension-reform-plan.
The issue has been market returns a pension funds have a portion tied money market investments. Money market investments
are driven by interest rates.
Shortfall in pensions are the responsibility of the municipalities. Municipalities are under pressure as such dealing with shortfalls
in pension plan will be put pressure on taxation as well as delivery of program spending.
Pensions plans also driven by contributions/matching by various municipalities. The problem is that public sector has not moved
enough when it comes to salary/pension reforms - http://www.cfib-fcei.ca/english/article/7114-public-sector-workers-earn-
more-work-less.html
Here are key plans in Canada
• OMERS - http://www.theglobeandmail.com/report-on-business/omers-posts-67-return-in-2015-bolstered-by-
infrastructure-real-estate-assets/article28925778/. OMERS is underfunded by about 10%. OMERS is investing heavily into
infrastructure projects, like transportation systems.
• British Colombia - http://www.fic.gov.bc.ca/pdf/pensionplans/ReportOnPensionPlans2016.pdf - Issues with unfunded
liabilities - https://www.moodys.com/research/Moodys-US-government-pension-shortfall-overshadowed-by-Social-
Security-Medicare--PR_346878 http://business.financialpost.com/news/fp-street/inside-the-risky-strategy-that-made-
canadas-biggest-pension-plans-the-new-masters-of-the-universe
What needs to happen:
• More regulations over pension funding including risk testing as well as ensure there are plans to make the plans including
solvent.
• Pension/Salaries reforms to close the gap between private and public sector payroll gaps
• Fixing a broken arbitration systems

27. ARBITRATION ISSUES
• OPP Costs - http://www.durhamregion.com/news-
story/4414447-municipalities-pushing-back-against-opp-
costs/
• Arbitration -
http://www.thestar.com/opinion/editorialopinion/2012/02/28
/ontario_municipalities_struggle_with_cost_of_essential_service
s.html

28. WATER ACT
• http://www.thestar.com/news/queenspark/2014/12/09/public
private_financing_cost_ontario_taxpayers_8_billion_auditor_say
s.html

29. MUNICIPAL PENSIONS

30. GREEN ACT
• http://www.lfpress.com/2014/12/02/pov-rural-urban-divide-
blowing-in-the-wind
• http://www.windconcernsontario.ca/ontario-rural-citizens-no-
say-in-wind-farm-development/

31. VALUE FOR MONEY
Source - https://www.hamiltonnews.com/news-story/7044004-ontario-minister-brushes-off-
municipalities-demand-for-audit-on-npca/

32. BLOG – INFRASTRUCTURE
• http://www.ctvnews.ca/politics/liberals-to-delay-billions-in-planned-infrastructure-spending-cp-
1.3654609?cid=sm%3Atrueanthem%3Actvnews%3Apost&utm_campaign=trueAnthem%3A+Trending+Content&utm_content=59f7063
304d30133dcb791a8&utm_medium=trueAnthem&utm_source=facebook
• I have done this presentation to highlight a few myths about infrastructure - https://www.slideshare.net/paulyoungcga/government-
policies-and-issues-municipalities-and-cities-canada-july-2017
•
• CPC increased funding to local governments for infrastructure funding through the creation of Build Canada and Gas Tax Fund. The
Liberals keep saying in the CPC did nothing on infrastructure is a myth - https://www.youtube.com/watch?v=8BZ3RFwPx7o
• Aecon - https://beta.theglobeandmail.com/news/politics/us-watchdog-warns-aecon-takeover-may-block-firms-access-to-
infrastructure-projects/article36761079/?ref=http://www.theglobeandmail.com&
• There are systemic issues with municipalities that need to be address, but have not for over a decade.
• Jack Mintz wrote a very good blog on the infrastructure bank -
http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/fp-comment/jack-m-mintz-beware-a-new-
infrastructure-bank-canadas-had-enough-of-these-failures-already&pubdate=2017-05-19
• Transit projects receive operational grants from cities as part of their budgets. https://www.slideshare.net/paulyoungcga/pension-
funds-and-infrastructure-investments-june-2017
• CPPIB is concern with projects that meet their investment criteria - http://www.timescolonist.com/canadian-infrastructure-deals-
scarce-but-would-be-welcome-cppib-chief-executive-1.20033106
•
• I cannot believe that Minister Sohi has the gal to say CPC did nothing on infrastructure as that comment is beyond absurd, but a lie -
https://www.youtube.com/watch?v=sMx--jYi07I

33. BLOG – RURAL MUNICIPALITIES VS URBAN
• “The Mayor of Goderich says events like the recent ROMA conference provide mayors and councillors of smaller municipalities with a unique
opportunity to express their concerns to Provincial officials. Kevin Morrison says one of the things that those Provincial officials need to
understand is that everything doesn’t happen in Toronto; and the issues that are facing rural municipalities are not necessarily the same as
those facing politicians in bigger cities.
Comments:
• Wynne does not care about the rural vote as such will not make concessions to rural Ontario
• OPP costs continue to be a big problem for municipalities - https://tvo.org/article/current-affairs/the-next-ontario/small-towns-cant-
afford-independent-policing-but-dont-know-where-to-turn
• Pension reforms needs to be undertaken for all levels of government. Defined Benefit pension plans are too risky -
http://www.omers.com/pdf/OMERS_AnnualReport_2016.pdf (Omers has a $5.7B pension deficit)
• There needs to be a new strategy for rural areas including economic development. More focus on innovation including working with
Universities and Colleges to create start up in areas like farming, power generation, advance manufacturing, etc.
• Hydro rates are killing rural Ontario. Wynne excludes municipalities when it comes to power generation - https://www.thespec.com/news-
story/7104518-rural-ontario-hydro-users-hoping-for-deliverance-from-high-bills/
• Source - http://blackburnnews.com/midwestern-ontario/2018/02/05/goderich-mayor-pleased-roma-opportunities/

34. BLOG – RURAL AREAS
JustinTrudeau is pushing agenda 2030 at all cost - https://www.slideshare.net/paulyoungcga/all-you-need-
to-know-about-agenda-2030-new-world-order. Trudeau does not care about rural areas as it neither ties to
his voting base nor fits the Agenda 2030.
Urban Issues - https://www.slideshare.net/paulyoungcga/rural-municipalities-vs-urban-centers-ontario-
february-2018

35. 2019 ELECTION / RURAL
Source - https://www.canadianmanufacturing.com/technology/liberals-look-at-quick-changes-in-strategies-
targeting-rural-canada-234997/
• Affordable housing is a big issue. Many factors drive affordability of housing, i.e. supply/demand,
municipal laws, construction costs - https://www.slideshare.net/paulyoungcga/2019-election-
real-estate-and-affordable-housing-canada-april-2019
• There has been huge investments in internet/broadband – CPC made a commitment during the
2015 election - https://www.conservative.ca/harper-promises-broadband-expansion-into-
more-rural-communities/
• Rural economic strategy – There are challenges with rural economic development, i.e. supply
management
• Transportation – lack of intercity transit -
https://www.theglobeandmail.com/business/commentary/article-subsidizing-rural-bus-service-
would-take-canadian-taxpayers-for-a-ride/
• More and more people have the ability to work from home

36. LPO - WASTE
• Wynne’s waste
• P3 Costs $8B (source:
http://www.thestar.com/news/queenspark/2014/12/09/publicprivate_financing_cost_ontario_taxpayers_8_billion_auditor_says.html)
•
• Equalization $10B (http://www.fin.gc.ca/fedprov/mtp-eng.asp#Ontario)
• Gas Plant Cancellation $1.1B (http://www.thestar.com/news/canada/2013/10/08/liberals_power_plant_cancellations_cost_11b_auditor_general.html)
• eHealth $1B (http://www.cbc.ca/news/canada/toronto/ehealth-scandal-a-1b-waste-auditor-1.808640)
• Selling excess power $1B/year http://kitchener.ctvnews.ca/ontario-paid-1-billion-to-export-surplus-power-in-2013-ndp-say-1.1647299 - 2013
amount only)
• Wind Subsidies $1B/year (http://www.netnewsledger.com/2014/03/05/ontario-wind-energy-plans-costing-1-billion-annually/)
• Ontario capital Expenditures $11.8B (http://www.fin.gov.on.ca/en/budget/paccts/2014/)
• Ontario shares of gas tax $750M (http://www.infrastructure.gc.ca/alt-format/pdf/GTF-FTE-20140905-eng.pdf)
• Municipalities Capital spending $6B
(http://www.amo.on.ca/Advocacy.aspx?searchtext=capital&searchmode=exactphrase&date=0;&issue=0;&category=0;)
• Wynne’s AIT Issues - http://www.cbc.ca/news/canada/saskatchewan/saskatchewan-premier-brad-wall-concerned-about-ontario-quebec-position-on-
energy-east-1.2848930.
• Oliver and Wynne barb over infrastructure - http://www.canadianmanufacturing.com/procurement/ontario-ottawa-trade-barbs-infrastructure-funding-
plan-142206/
• Broken Arbitration system - http://www.lfpress.com/2014/02/22/small-municipalities-across-ontario-crushed-by-soaring-opp-policing-costs - Wynne
was McGuinty’s right hand person - https://www.theglobeandmail.com/news/politics/mcguinty-defends-85-per-cent-pay-hike-for-opp-in-
2014/article1360155/
• Forest Management cuts - http://www.torontosun.com/2013/12/17/liberals-latest-disaster-in-works-leaves-northern-ontario-vulnerable
•