Consultations on fiscal framework not good enough: St. John’s mayor

Daniel MacEachern
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The mayor of St. John’s is disappointed a new municipal-provincial fiscal framework isn’t in the cards for 2014, but the minister of intergovernmental affairs says it never was

Mount Pearl Mayor Randy Simms

he mayor of St. John’s is disappointed a new municipal-provincial fiscal framework isn’t in the cards for 2014, but the minister of intergovernmental affairs says it never was.

The provincial government Friday announced consultations — which started Friday and run until April 2 — with municipalities, residents and businesses as it reviews its fiscal arrangement with the provinces: how it delivers, shares and pays for services along with local governments. The timing of the consultations effectively eliminates the possibility that any suggestions will be reflected in this year’s provincial budget, expected in March or April.

St. John’s Mayor Dennis O’Keefe, who was expecting to see some signs in this year’s budget of a new municipal-provincial arrangement, said Friday he feels let down.

“We expected to see — let’s call it a sign of good faith in Budget 2014,” said O’Keefe. “The earliest we’re looking at, if at all, is 2015 budget, could even be 2016. Not good enough.”

Nevertheless, O’Keefe said he’s delighted there will be a broad level of consultation. “I am curious as to them wrapping in other issues such as economic development, recreation and law enforcement. I don’t know where they’re going with that.”

But Intergovernmental Affairs Minister Steve Kent says a new framework was never going to be unveiled this year. “There never was,” he said. “I’ve seen news articles where the mayor of St. John’s has suggested there would be something coming in this budget. I don’t know why he would ever have had that impression. We’ve said all along that this process is an in-depth one, it’s a comprehensive one, and it would take a couple of years to complete. I anticipate that it’s going to take the next 18 months to work through this process.”

Other mayors were less critical.

Mount Pearl Mayor Randy Simms said he’s happy to see the consultations go ahead. “That’s an indication that the government is committed to the process,” he said. “That’s good news. I won’t be shocked, personally, if there’s not a lot of change as it relates to the fiscal relationship among the towns in the 2014 budget because of the time frames involved in what is a fairly complicated and challenging discussion.”

Ken McDonald, the mayor of Conception Bay South, also called the consultations a sign of progress. “As municipalities, we’ve been trying to get them to move in this direction for quite some time now,” he said, adding that he’d rather see something happen now while the provincial government is less focused on an election campaign. “Disappointing if something don’t happen this year, because I think most municipalities have the opinion that we have to put pressure on to make something happen in this budget, because if not … it’ll either be right after a provincial election or right before a provincial election.”

Churence Rogers, president of Municipalities Newfoundland and Labrador, said even without a new framework this year, the province can make some changes. “There are a number of things that can be done in the interim that would be a show of good faith, steps that the province could take immediately without waiting to finish the full fiscal framework discussions,” he said, suggesting the provincial government stop collecting its portion of the HST from municipalities.

O’Keefe also said the provincial government could easily choose to begin rebating the provincial portion of the HST paid by municipalities. “The federal government doesn’t require that we pay taxes to them, the federal government doesn’t tax the provincial government, provincial government doesn’t tax the federal government,” said O’Keefe. “Why should the province tax us, to the tune of $11- to $12-million? That could be contained in Budget 2014. There are things that can be done as a sign of good faith, and there’s no indication that that’s going to happen.”

Kent counters that the show of good faith has already happened. “We’ve launched a new municipal operating grant formula, which meant good news for all communities in Newfoundland and Labrador,” he said. The revised formula cut the operating grant for the province’s seven largest communities, but added capital funding for those places. “I’m confident that there will be more municipal infrastructure money in the upcoming budget, and obviously we will continue to implement the new municipal operating grant formula. I think those commitments do represent a show of good faith.”

Kent said it’s important, when suggesting tax rebates among levels of government, that there’s just one group of taxpayers. “No matter who taxes them — be it the municipality or the provincial government or the federal government — money is coming from that one source.”

The fiscal framework is about more than money, he said. “It’s about looking at how we do business, and looking at the entire relationship between the communities and our provincial government.”



Organizations: Municipalities Newfoundland and Labrador

Geographic location: Mount Pearl, Newfoundland and Labrador

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Recent comments

  • Paul
    February 03, 2014 - 15:16

    I agree with the mayor. The Northeast Avalon is facing increasing pressure on infrastructure to provide services. This infrasture supports not only residents but visitors and industry. Poliitcal posturing from Kent