St. John’s Mayor Dennis O’Keefe says the way the provincial government taxes towns and cities is unfair, unacceptable and needs to be addressed, starting in the upcoming provincial budget.
O’Keefe held a news conference at city hall Thursday morning to reiterate why the city, and municipalities across the province, want a new fiscal arrangement with the province.
The mayor said he called the meeting after Premier Kathy Dunderdale told The Telegram this week the province is developing a new municipal operating grant structure, but that it is at least another year away.
“I really can’t overstate the fact that this is not about a municipal operating grant. There’s a much larger picture to this whole issue,” O’Keefe said. “What we are trying to develop here is a whole new ... fiscal relationship which will address the funding issues that towns and cities ... right across Newfoundland and Labrador have.”
He largely focused his comments Thursday on just one proposal the city and Municipalities Newfoundland and Labrador (MNL) have asked for: that the province rebate to municipalities what they pay the province in HST.
O’Keefe said that would cost the province between $25 million and $30 million a year — with about $10 million going to the capital.
“This is not just a money issue ... but it’s also a moral issue,” O’Keefe continued. “The province doesn’t pay the HST to the federal government. The federal government doesn’t tax the province. The federal government doesn’t tax the city ... so it is fundamentally wrong and unfair for the province ... to tax the City of St. John’s and to tax other communities right across Newfoundland and Labrador.”
The mayor said there is no way the province can justify taxing the city for building affordable housing or water treatment plants or to providing public transit.
“It is simply unfair and unacceptable (for) this to continue any longer,” said O’Keefe.
Coun. Danny Breen, the chairman of the city’s finance committee, added that what is being asked for is a long-term, sustainable and predictable financial relationship between the two levels of government.
O’Keefe also called out the city’s MHAs for not attending the news conference, even after they were invited.
However, the city later confirmed only PC MHAs from the city got the invite. Coun. Wally Collins also pointed out Kilbride MHA John Dinn was at city hall just before the news conference started.
The NDP say they would have eagerly attended, as the party supports the city and MNL on the issue, but the party didn’t know about the event.
Municipal affairs critic George Murphy said it was “disappointing” to be left out by O’Keefe.
“We were not invited. Nobody received an e-mail, nobody received a phone call,” he said. “It just really hurts, and I feel that we’ve been burned.”
There was one MHA in the room, ironically from the party which doesn’t have a seat in the House from the North East Avalon.
Liberal municipal affairs critic Eddie Joyce told the room the issue affects his constituents in the Bay of Islands as much as St. John’s.
Premier Kathy Dunderdale, responding to questions from Joyce in the House of Assembly, said the government is working on the issue.
Speaking to reporters after question period, Dunderdale said they recognize the municipal operating grant is flawed, and they’re working to fix it. But, she said, in a meeting recently with O’Keefe, he never raised the HST issue.
MNL will also plans to hold an emergency meeting of its membership Monday in St. John’s to rally communities from around the province to the common cause of a new fiscal arrangement with the government.