Impact of Provincial Downloading on Toronto Ambulance
The Emergency and Protective Services Committee submits the following report (March 2, 1998) from the Acting
General Manager of Toronto Ambulance; and reports having requested the Acting General Manager of Toronto
Ambulance to submit a report directly to Council for its meeting on April 16, 1998, with respect to the City of
Toronto= s acceptance as being the sole provider of ambulance services in the new City of Toronto:
Purpose:
To apprise Toronto Council of the specific impacts that the process of Provincial downloading has had on Toronto
Ambulance, and on its budget in particular.
Funding Sources, Financial Implications and Impact Statement:
Provincial downloading has resulted in Toronto Ambulance having to request a budget increase as part of the City of
Toronto=s 1998 Operating Budget Process. This has been necessary to cover the budget shortfall created by downloading,
and to allow the Department to maintain its service delivery standards.
Recommendations:
It is recommended that this report be received for information.
Council Reference/Background/History:
At the Emergency and Protective Services Committee meeting of January 13, 1998, a request was made of the (then)
Commissioner of Ambulance Services to report on the impact of the elimination of the Provincial subsidy on ambulance
services.
Comments and/or Discussion and/or Justification:
Toronto Ambulance entered the new City of Toronto as a service which was already single and consolidated. However, it
was also a service which had strong linkages - financially, legislatively, and operationally - with the Ministry of Health.
The unification of Metropolitan Toronto and the six area municipal governments into one municipal government structure -
and the absorption of the >Toronto Ambulance= service into it - came at the same time that the Ministry of Health was
starting the process of divesting itself from the funding and operation of ambulance services throughout the Province.
Thus, on January 1, 1998, not only was there a new City of Toronto governance and organizational structure, there was also
a significant change to the structure which had provided for the delivery of ambulance service in the new City of Toronto.
Historical Funding of Toronto Ambulance:
In 1975, the (Metro) Department of Ambulance Services was formed. It amalgamated a number of private, municipal and
provincially operated services into one municipal service, largely as a result of complaints and concerns which had been
raised about both the privatized and decentralized nature of the service delivery which was available at the time. It was
publicly felt that the disparity in quality and service standards between different services was not acceptable.
Both Metro Toronto and the Province wholly supported the consolidation of ambulance services, and agreed to share the
cost of funding the, now single, service.
Cost sharing ratios have varied over the many years, but in the last decade the split has been roughly 50:50 between the
Province and Metropolitan Toronto. In general, the Province has always provided the larger share of funding, by way of
conditional grants.
Down-loading - On-Paper Costs:
With Provincial downloading, all Upper Tier Municipalities (UTMs, of which Toronto is one) are now responsible for 100
percent of the funding of the ambulance service delivery within their regions. For Toronto, this would normally have
amounted to the elimination of the annual provincial grant for ambulance service. In 1997, (Metro) Toronto=s Ambulance
Service budget was $61.9 million. Of this, the Provincial grant portion was $34.892 million. Therefore, for 1998, the cost
of downloading of ambulance services for the City of Toronto should have been a straight $34.892 million (there were
discussions between the Province and the four regions surrounding Toronto with respect to the recovery of some of these
funds through a GTA >pooling= formula, but those discussions have been put in abeyance indefinitely).
Downloading - Additional Costs:
It must be noted, however, that for 1997 - and for many years preceding - the funds the Province provided Toronto=s
ambulance service through formal grants did not cover the full cost of providing the service. Two main areas where
Toronto Ambulance has received additional >subsidy= have been in the areas of (1) ambulance vehicles, and (2)
emergency supplies and equipment. For Toronto Ambulance, these are the two major additional impact areas of Provincial
downloading.
Prior to 1992, funds for the yearly purchase of ambulance vehicles were drawn from the Department=s operating budget. In
1992, in response to increasing budgetary and staffing pressure which preceded and which were expected to include the
government of the day=s >Social Contract=, the Ministry of Health began supplying the Department with all its ambulance
vehicles. The understanding held by both parties initially was that the vehicles would be on >loan= to Metropolitan
Toronto. Therefore, it was not captured as part of Metro=s portion of our operating budget, nor as part of the Ministry=s
portion of its grant funding.
The >loan= became extended from one year to the next, with the Ministry indicating each year that the arrangement was
not intended to be a permanent one, and that they reserved the right to recall the vehicles at any time, with suitable notice.
The equivalent annual purchase price of the provided vehicles, based on a replacement cycle of 24 vehicles per year, is
estimated at $2.500 million. This represents an amount that Toronto has, in fact, been Asupplemented@ with for the last
six years (the need for 24 replacement ambulances a year is based on a six year, repeating fleet replacement cycle).
With the Provincial downloading associated with the formation of the new City of Toronto, the Province will no longer be
supplying our Department with its ambulance vehicles. Thus, Toronto Ambulance has had to increase its budget request by
the amount required to acquire 24 vehicles each year.
Through a bulk purchase arrangement with the Ministry, the amount necessary in 1998 is identified as $1.948 million (in
the absence of a bulk purchase deal, the amount would be closer to the $2.500 million).
In addition to this, the Department will also have to purchase equipment and supplies which have also been supplied to our
Department, at no cost to (Metro) Toronto, over the last six years. These represent specialized types of Ministry-introduced
mandatory and disposable items which are required in an ambulance, based on the Ministry=s specifications. They are
equal to an amount of approximately $500 thousand per year.
There have been no formal written agreements between the Ministry and our Department regarding these vehicles and
equipment. Late last year, the Ministry did advise us that, technically, they still owned the vehicles and that they might
>bill= Toronto for the equivalent outstanding residual value of them. However, they have since determined that they will
transfer all the vehicles to Toronto at no charge (there may be some provincial tax costs associated with the transfer, but
this is still being negotiated). The equivalent value of these assets is approximately $4.5 million, a cost that the City of
Toronto will not have to incur.
Below is an itemized list of the financial impacts of the Province=s down-loading of ambulance services to the City of
Toronto, as reproduced from our 1998 Operating Budget submission. The total additional cost for 1998 is anticipated to be
about $2.5 million.
Reconciliation Notes - 1998 Estimate
($000)
Provincial Downloading:$34,892.00
________________________________________________________
Additional Downloading Costs:
Replacement of 24 ambulances per year based
on current Ministry standards (and through
bulk purchase with Ministry)1,948.00
Average annual cost of equipment provided
by the Ministry of Health, not included in subsidy400.00
Provincial subsidy for the supply of medical
equipment to Metro area Fire Department as
part of Tiered Response78.00
Annual vehicle licence fees paid for by the
Ministry of Health for ambulances provided
for Metro's use 8.00
Estimated vehicle repair costs for Ministry owned
vehicles not billed to Metro30.00
Projected replacement of Ministry of Health provided
Emergency Support Unit. Annual contributions to the
vehicle reserve for replacement over a 6 year period12.00
Total$2,476.00
_______________________________________________________
Total Downloading Costs:
Elimination of Grant Funding and Additional Costs $37,368.00
Communications Centre - Funding Support:
The Ministry of Health has indicated that, from 1998 and on, it will be assuming the cost of operating Toronto
Ambulance=s Communications Centre. The Ministry had traditionally provided direct funding for all the Central
Ambulance Communications Centres (CACCs) in the Province, except for Toronto=s. However, it had also suggested that,
historically, CACC funding was built in to its previous grant co-funding.
Under Bill 152, the Province will retain operational control and funding of all ambulance communications centres. In
Toronto=s case, it will permit Toronto Ambulance to continue the day to day operation of the centre.
The amount of funding which the Province will make available has been set at $8.0 million. Discussions between Toronto
Ambulance and the Ministry of Health aimed at confirming the amount are presently taking place. This has been presented
to the Budget Committee, and will form part of the Department=s final budget outcome.
The amount the Ministry provides to Toronto Ambulance for its communications centre will also reduce the overall
downloading figures accordingly. Funding of $8.0 million will reduce the overall downloading cost from $37,368 million
to $29,368 million.
Secondary Impacts of Downloading:
The above figures represent the direct financial impacts of downloading on Toronto Ambulance. Indirect impacts will also
be felt, and will be matters of concern to both Toronto Ambulance and the City of Toronto.
The first of these is the matter of >cross border= service delivery. Under the previous >seamless= system of ambulance
service delivery, ambulances in Toronto would move freely across the political borders of the surrounding GTA regions. If
a Toronto ambulance was the closest resource to an emergency call in Mississauga, for example, then that ambulance
would be dispatched to service the call. Cost recovery was not an issue, since the Province funded all services, either
partially or wholly.
As of January 1, 1998, this is no longer the case. Since Upper Tier Municipalities are now responsible for the funding of
ambulance services in their regions, any >cross border= movements are potentially billable. Bill 152, the Services
Improvement Act, allows for cross border and mutual aid agreements between adjacent municipalities. This is particularly
important as the Communication Centres controlling ambulance services will remain under Provincial control. Ambulances
will be selected and dispatched to emergency calls based on their geographic proximity to the calls, and not on their
municipal home base.
Of approximately 265,000 ambulance responses in 1997, almost 6,000 were to areas outside Toronto. Similarly,
non-Toronto ambulances also crossed into Toronto=s borders, but on a much smaller comparative scale. These calls
represent a potential source of >cost recovery= revenue for Toronto, but will require the appropriate Toronto and regional
officials to strike suitable cross border fee structure agreements.
Officials of Toronto Ambulance will be meeting with representatives of the four regions to discuss this issue further, with a
view to establishing some form of mutually agreeable cross border billing arrangement. From there the Ministry of Health
and then City of Toronto corporate representatives (e.g., the office of the Chief Administrative Officer) will need to
become involved.
A second indirect impact of downloading is related to health services restructuring, and to hospital closures. This is an
external >downloading= pressure on Toronto, but one which its ambulance service is expected to absorb without any
increase in its resources. A significant rise in the amount of time hospitals are becoming overextended and therefore
unavailable to ambulance patients is resulting in a rise in the call transport and call completion times of our service. Citizen
frustration levels are also running high as patients are being diverted from >unavailable= neighbourhood hospitals to
hospitals farther away.
The Ministry of Health had indicated there would be a reinvestment in community based health care, and in health care
delivery agents, in response to health services restructuring. For ambulance services, however, this has not happened thus
far. Toronto Ambulance is being pushed to the limits of its system flexibility in order to compensate for the demands
created as a result of the present hospital situation.
Timing Difficulties:
A last impact of the process of Provincial downloading pertains to the awkward position Toronto Ambulance found itself in
with respect to the budgetary process for purchasing new vehicles, and how that tied in to the formation of the new City of
Toronto.
It was only November 1997, when the new City, through the Chief Administrative Officer and the Toronto Transition
Team, formally confirmed on behalf of Toronto its intent to assume full control over the provision of ambulance services in
Toronto (since Toronto had already been providing the service to itself anyway). Therefore, it was only at that time that
Toronto Ambulance found itself in a position - for the first time in six years - of having to make arrangements for the
acquisition of replacement ambulances (ambulances are only available from two suppliers in Canada, and have to be
ordered several months in advance of when they are actually needed).
This posed a difficulty in timing: the Department was still required to satisfy its operating needs (through the purchase of
vehicles) but the formal municipal approval mechanisms were in transition. As well, the downloading liability and the
necessity for a budget increase to offset it was, at the time, a good distance away from being dealt with through the new
City budget procedures. In a very real sense, Toronto Ambulance got >caught= in inauspicious timing.
The vehicle issues have currently been addressed through the present Committee, Council and budget processes. Approval
for the purchase was granted by Toronto Council at its meeting of March 4, 5 and 6, 1998.
Conclusions:
Provincial downloading has had significant effect on Toronto Ambulance, specifically in the areas of ambulance vehicles
and equipment. For the last six years, the Ministry of Health has provided the Department with both, at an annual
expenditure equivalent of at least $2.5 million. As a consequence, the Department is asking for a budget increase for the
first time since 1991, in order to help offset the increased costs. Unfortunately, this also comes at a time when the entire
Corporation is looking for substantial expenditure reductions.
Downloading also had an indirect effect on Toronto Ambulance in as much as the timing of the financial impacts did not
coincide favourably with formalization of new City=s governance and administrative structure. As well, indirect impacts of
downloading include the need to address the matter of cross border service delivery, and the demands being placed on
ambulance service by the increasing incidence of hospital closures.
Contact Name:
Ron Kelusky - 397-9240 - Fax: 392-2115.
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