Intergovernmental Affairs Minister Steve Kent says the provincial government is ready for a new fiscal arrangement with St. John’s.
The St. John’s 2014 budget — as well as Mayor Dennis O’Keefe, finance committee chairman Coun. Danny Breen and city manager Bob Smart — warns municipal tax hikes may be necessary in 2015 and 2016 unless the province starts paying, in Smart’s words, “its fair share” of city operations, or takes less from the city in payroll and sales taxes.
Kent on Tuesday congratulated Breen and the council on its 2014 budget, and took the comments as a signal the city supports the province’s fiscal framework review process.
“It’s clear that the City of St. John’s recognizes how important that process is to communities large and small in the province,” he said. “We remain very committed to a comprehensive review of the fiscal framework.”
The province is working with Municipalities Newfoundland and Labrador and consulting municipal leaders throughout the province, a process that he says will take another 18 months to conclude, said Kent.
City councillors and staff noted as examples of the fiscal imbalance, the province doesn’t pay property taxes on its buildings in St. John’s and doesn’t forgive the provincial portion of the HST, as some other Canadian jurisdictions do.
Kent said “everything is on the table” when it comes to negotiating a new fiscal arrangement.
“We want to look at the issue as holistically as possible,” he said.
“We want to examine the existing provincial-municipal fiscal framework and look at options for efficient and effective ways for services to be delivered, for services to be shared in the province. We’re going to be doing consultations with various stakeholder groups and we’re going to consult the general public.”
But Kent did disagree with the suggestion that St. John’s isn’t being treated fairly by the provincial government.
“We recognize the important role that the city of St. John’s plays as the capital city of our province, and they certainly play an important role in the region,” he said, noting infrastructure funding the provincial government provides to the city as it grows.
* This article has been corrected.