St. John's announces record budget

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Mil rates are down and commercial water taxes are up in the City of St. John's record-setting budget for 2013.

The city has budgeted $244 million in expenditures for 2013, an increase of 3.8 per cent over 2012. That expenditure growth rate is down from 4.2 per cent for the previous budget.

The $244 million price tag on the budget is the largest in the city's history.

The residential mil will decline from 10.6 to 8.1, while the commercial militates falls from 31.4 mils to 26.2.

There will be no water tax increase for residential homeowners, but businesses will witness an increase that will effect the city's net water tax revenue from the commercial sector by 27 per cent.

Coun. Danny Breen, chair of the finance and administration standing committee, says in light of the increase in property assessments the city could afford to drop the 10.6 mill rate and still balance the budget.

“The budget process for this year was challenging,” Breen said, in a news release.

“Not only are we in the first year of a new assessment cycle which saw property values increase significantly throughout the city, we are also moving forward with blending the Business Occupancy Tax into the Business Realty Tax and we have moved to a three-year budget process.”

The City of St. John’s is not increasing the water tax for residents who account for 39 per cent of usage while commercial users such as Memorial University and the provincial government, which account for 61 per cent usage, will see a 27 per cent increase in fees.


Highlights for 2013 include:

• Decrease in the Residential Property Tax mil rate to 8.1 mils. The mil rate was previously set at 10.6 mils.

• Decrease in the Business Property Tax mil from an effective level of 31.4 mils to 26.2 mils.

• No increase in water tax for residential properties;

• The commercial water tax rate will be increased from $0.88 per cubic meter to $1.32 per cubic meter. The commercial meter rates will be reduced by 20 per cent. The net effect will be a 27 per cent increase in the water tax revenue collected from the commercial sector. This will begin to address the inequity in the water tax system which currently sees residential properties paying a disproportionate share.

• The city has asked the provincial government to approve an increase in the Accommodation Tax from three to four per cent to support the marketing initiatives of Destination St. John’s and the expansion of the St. John’s Convention Centre.

• Several fee increases. For example, the development fee will increase from $1,000 per residential lot to $2,000. This fee will also be applicable to commercial developments. Development fee revenue is dedicated towards growing and maintaining parks, open spaces and playgrounds.

• The city anticipates the Municipal Operating Grant (MOG) from the province will remain the same as received in 2012 at $3.4 million.


For more on this story and reaction, read Tuesday's full edition of The Telegram.




Geographic location: St. John's

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Recent comments

  • Time to sweep house
    December 11, 2012 - 22:13

    @ Remington - Yes we have a good many self-serving councillors but you have the wrong list. Among the four you mention, there are perhaps two that are deserving of re-election. They are O'Leary and Galgay - the first because she has the taxpayer's interests at heart and is not afraid to speak her mind; the second because, although he is sometimes on the wrong side of major issues, he is probably one of the more objective, intelligent and selfless members of council. Indeed beyond O'Leary and Galgay, there are none who deserve re-election. To see why, just 'Happily Retired'. The worst offenders unquestionably are O'Keefe and Colbert.

  • Happily Retired
    December 11, 2012 - 10:32

    The Telegram headline is incorrect and totally misleading, (please try to make these headlines a little accurate) and Councillor Breen must be trying to be cute, hiding behind the mill rate argument. The TRUTH is, we will be facing large tax increases, much higher than the 3.8% increase in city expenditures. I certainly feel like I'm being gouged when I have to pay for expenditures like an overly expensive, and useless skating rink at Bannerman Park, a fence for the Federal Government, or a $40 million swimming pool at Wedgewood Park, especially when the Y has built one around the corner. All of this to satisfy elitist, special interest groups who have council's ear. But I guess it's our own fault, we keep electing these self-entitled clowns, who are only interested building their own empires.

  • Remmington
    December 11, 2012 - 09:21

    I am sick and tired of this bunch of goons at city hall trying to balance a budget on the backs of the residents.Having said that,we are the people who voted these clowns in there in the first place.However,when the next election comes around just don't give lip service to the election,get out there and vote for some competent people.Duff,O'Leary Galgay,collins and Hickman will have to be replaced if we want to attract new industry.By allowing new office towers,no matter how high they are will add significent revenues in taxes to the city and this will give the residents a little break from the soaring rates.Just look at this bunch,they voted in favour of erecting a fence at Harbour Front and also gave the feds a gift by agreeing to pay for half the cost and all of a sudden they start to think,maybe we shouldn't have done this.Unless we get leadership at the top,as of now we have Zilch,we are destined to keep shelling out our dollars to these goons to do as they see fit with it.Last word,they have to be replaced especially the ones i mentioned in the preceeding paragrapgs.

  • moe
    December 11, 2012 - 07:49

    Gues who's going to be paying for this increase? My tenant.

  • Sean
    December 10, 2012 - 21:45

    I have been a homeowner in St. John's for 15 years and have seen my property taxes go up substantially with each new assessment cycle. This budget is no exception. With the increase in my house value, even with the reduction in mil rate, I will pay an additional $215 in taxes this year. I live in a modest neighbourhood of Airport Heights with not even a playground within walking distance. My home is a basic side-split just under 15 years old. My friend owns a home in the Baird Subdivision and has seen similar increases over the past 15 years, with over a $200 increase this again this year. I figured that everyone must be seeing an equivalent increase, until I spoke with a friend who lives in a more upscale executive house off Newfoundland Drive...who will actually see his property tax DECREASE by just under $50. Where is the equitable distribution of tax increases? Why do two people living in regular modest houses each pay over $200 more when someone in a larger house in a richer neighbourhaood pay LESS? Can someone please explain?

  • Jack
    December 10, 2012 - 19:55

    While the City of St. John's' budget has some property tax reductions, there are many flaws with this budget. For starters, most residents will be paying substantially higher taxes, possibly mill rate increases in 2014 and 2015 which will result in Mayor O'Keefe losing his job come 2013, and worse of all, a proposed increase to the accommodation which could be province wide and resulting in Newfoundland and Labrador's tourism industry being crippled. Therefore, in order to stop St. John's from telling the rest of Newfoundland and Labrador what to do, especially a proposed accommodation tax increase that will be in effect province wide, the Dunderdale Government should do the right thing to protect the tourism industry and stop the tax increase. That way, the government sends a message that St. John's doesn't own Newfoundland and Labrador.

    • Seamus Connors
      December 11, 2012 - 10:53

      I have worked in Hospitality industry for 8 years and been a Sales Manager for about 4. Let me tell you, the increase in the accomodation tax will not hurt the industry in St. John's or the rest of Newfoundland for that matter. What is hurting the industry there is Newfoundland's lack of presence in virtually all of the major industry events. As a native, I am shocked whenever I go to an event and see that there is no representative from Newfoundland. The industry will never grow there until this is remedied. The accomodation tax is a standard thing accross the industry and at a comparable rate.

  • ewb
    December 10, 2012 - 18:08

    And, as residents, we should be happy with this? St John's costs have been spiraling out of line with any reasonable measurement. We need to replace ALL current members of the current council with new people committed to containg costs. Here is the budget growth since 2000, expenses that year were $105,014,140. Expenses for 2011 were 224,227,582, an increase of 119, 213, 442 a growth of about 114% over 11 years. I am sure we have all seen our incomes grow by the same percentage in that timeframe. Interesting that they are sayiny expense costs are "only" going up by 3.8% from last year, if that is so I would think that the expansion (new houses and business) would cover much of that and there should be no need for them to increase my property tax by about 34% in 2013.

  • Josh Harris
    December 10, 2012 - 16:21

    I'm sure the unions are paying attention to this. Balanced budgets, reduced mil rates, etc, all mean that they can extort more money out of the city. There's no reason why someone picking up garbage shouldn't make $100k is there?