Confusion over capital works funding prompts city to trim budget
The provincial government says confusion at St. John’s City Hall over capital works funding is due to a mistake by the city, not the province.
As reported by The Telegram Wednesday, city council voted Tuesday night to trim its three-year capital works plan after it learned the city is receiving less funding from the provincial government than city staff thought.
A report from city manager Neil Martin said the $40.9 million provided by the province was, according to provincial staff, not including a GST rebate from the federal government — meaning staff believed the actual amount of funding available to the city was $44.172 million. With the city’s contribution figured in, St. John’s budgeted a three-year program of $88.344 million.
“The province has now instructed that the $40.9M was already net of GST. … This in turn means the total value of funding is $81.8M, meaning the list of submitted projects has to be reduced by $6.544M,” wrote Martin.
City council voted to transfer a $6-million east-end reservoir project, slated for 2017, to the federal Building Canada fund instead.
On Wednesday, provincial Intergovernmental Affairs Minister Steve Kent said, in contrast to Martin’s report, the mixup is the city’s fault.
“There was definitely a misinterpretation by somebody at city hall at how the GST rebate is applied to municipal infrastructure projects,” said Kent. “The process hasn’t changed in years. … It’s not a mistake they’ve made in the past. For them to suggest that somehow there was miscommunication from our officials was rather unfair.”
Martin’s report also said Mount Pearl city staff were similarly told its funding didn’t include taxes, and were likewise later informed differently. Not so,Michele Peach, Mount Pearl’s chief administrative officer, said Wednesday.
“That did not happen with us,” said Peach. “I’m not sure what happened with St. John’s, but we received notification of the funding like we always do, and the funding is always reported net of a GST rebate, which we receive from the federal government, and that’s standard.”
Martin has declined requests for comment.