Passing the buck

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It was good news — with a warning. The City of St. John’s brought down its budget Monday night, edging the cost of providing city services up over a quarter of a billion dollars a year.

The $272-million budget has a nine per cent increase in spending, but no tax increases (except for a new levy on buildings under construction).

But while the city was talking about holding the line on municipal tax rates, it was also saying it can’t hold the line forever, and that tax increases could be coming as soon as next year.

One of the reasons? The fact that the provincial government doesn’t pay taxes for services at any of its properties, from Confederation Building to educational institutions to the Newfoundland and Labrador Liquor Corporation and on down, despite the services those buildings use. The province does, in some cases, pay a grant in lieu of taxes, but the provincial government has been reducing those grants.

At the same time, the provincial government expects the city to pay its full share of provincial taxes.

City councillors think the provincial government should at least be paying the cost of the services it uses — and they have a point.

You can make the argument that it doesn’t really make a lot of difference to the taxpayer: whether you’re paying the money as provincial tax or municipal tax, you’re still paying.

There’s also the argument of the sheer economic benefit of having the bulk of the provincial government’s offices located in the city; after all, provincial government employees are located in the St. John’s area because that’s where their jobs are, and they spend money and pay taxes in the capital as well. (Imagine the argument, though, if the city’s malls and big-box stores argued they shouldn’t pay municipal

taxes because of the economic impact of their employees.)

The heart of the argument, though, has to do with fairness.

The provincial government is not only essentially deciding what it would like to pay (and collecting taxes from the city as well), but it has also legislated that the city bring in balanced budgets. That’s truly a case of “do as we say, not as we do.”

Legislating yourself a virtually free ride sends a horrible message, much like when provincial MHAs used to receive tax-free “allowances” as part of their pay packages.

Primarily, the message is that there are two classes of citizens — those who have to live by the rules, and those who make their own rules for their own benefit.

It’s not too much to ask that the provincial government pay its own way for the services it uses rather than forcing the city to push those costs onto the backs of other users.

Simply downloading the costs makes the province’s bottom line look better and makes St. John’s city council look worse — but it’s hardly fair.

Organizations: Newfoundland and Labrador Liquor

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Recent comments

  • Turry from town
    December 12, 2013 - 06:53

    All those buildings were built where the largest population of the province lives.And at that time MP was pasture land.All these buildings employ most of the working population of outside communities who pay nothing in the way of property tax.Spending a few dollars in town only makes the business man richer.None of that money goes to the city and people who work there take it home to where ever they live including MP CBS etc.Spreading gov buildings over the province does not make economic sense vs centralizing to a larger community.MP got the motor vechile building by fluke by the cartel of the day. If the gov buildings were moved to other towns then eventually they would be faced with the same problem as St.John,s residents.Paying for infastructure for the whole region.

  • Ed Power
    December 11, 2013 - 09:46

    Corner Brook would make a fine capital city. Close to the main point-of-entry to the province, an airport nearby, closer to Labrador, beautiful landscape and a great climate. Just think how the reduced traffic from "brown baggers" would reduce the wear-and-tear on streets of St. John's and save taxpayer dollars. Sadly, Andy Wells would never see his dream of toll gates at the borders of Mount Pearl realized...

    • Lee
      December 11, 2013 - 12:20

      That would be funny. It's track record as regional center is enough of a reason to make sure it never becomes the provincial capital - it's population is fleeing, businesses are going elsewhere, and entertainment passes it by. Oh it has a great climate - by Newfoundland standards. Otherwise, it would make a fine capital city.

  • Corporate Psycho
    December 11, 2013 - 08:48

    Mt. Pearl the capital city? That would be pretty embarrassing.

  • Joe
    December 11, 2013 - 08:24

    Why has the City taken so long to make this argument? Mount Pearl could have had a Health Science Complex, a new state of the art Seniors Home, a real West Block of Confederation Bldg., and be called Mount Pearl the Capital of Newfoundland and Labrador. St. John's only had to say we don't want these facilities.

    • Tax Payer
      December 11, 2013 - 15:37

      Last year my municipal taxes increased by 25%, the largest tax increase I've ever had from any level of government. And more increases being hinted at next year? Bring back Andy Wells and some semblance of fiscal responsibility. Can't believe this lot were voted in again. I guess we deserve what we get.