The provincial government has announced a new way to fund the Island’s municipalities.
Finance Minister Allen Roach outlined the funding changes in the Legislative Assembly on Wednesday, saying the new agreement will provide municipalities with more predictable funding and stronger potential to grow.
Minister Roche says the agreement will fundamentally transform the relationship between the provincial government and municipalities and will lead to stronger and more sustainable local governments across the province.
Under the agreement, the current system of grants will be converted to tax credits; the equalization program will be updated; the planning credit will also be extended to municipalities with an official plan; municipalities will receive a grant of 10 per cent on all their eligible capital expenditures; and under the top-up provision of the agreement, no municipality will receive less funding than it does now.
Total funding to municipalities of $23.6 million has been increased by $2 million in 2017-18 and will increase by $1 million in each of the next three years.
This is the single biggest change since municipal amalgamation in 1995. The agreement will be reviewed in five years time.