In the budget put forward by the provincial government, the municipal operating grants will no longer be paid to the larger municipalities.
This is not only unfair but completely wrong.
The $3.5 million paid to the City of St. John’s covered services provided to government office buildings, schools, hospitals, Memorial University, the College of the North Atlantic and liquor stores.
Now, these services such as water and sewer, snowclearing and street lights will be paid by the municipal taxpayer and the provincial government pays nothing.
This is difficult to understand, as I heard the premier last week state that 20 per cent of the population pay 80 per cent of taxes while 80 per cent pay only 20 per cent, and this inequity may be addressed.
Also, some months ago, I heard the previous minister of finance say that perhaps the City of St. John’s should lend the province money because the city was in a surplus position. This comment was unacceptable.
On a go-forward basis, the province will not pay its share of municipal services and yet will collect from the city and other municipalities both payroll taxes and HST.
For St. John’s alone, the payroll tax is in excess of $1.5 million and HST payments amount to over
$8 million per year.
There is also a fuel tax charged to public transit in St. John’s and Corner Brook, and for St. John’s, this is approximately $450,000 per year.
I realize that the province does, in fact, participate with the city for multi-year capital works projects. Also, the minister of municipal affairs announced $25 million to be shared among the larger municipalities.
However, I believe that because of these cuts, it is only reasonable to conclude that some projects in the city must now be deferred.
The federal government pays property taxes on their buildings, rebates to the city their five per cent share of the HST and, five years ago, committed almost $30 million to Metrobus which was used to build the new depot on Kelsey Drive.
The present minister of finance states we will return to surplus in 2015.
I believe we should have a commitment now that, in two years’ time, the province will reinstate the municipal operating grants. Also, the government should immediately return to all municipalities the provincial share of the HST, exempt municipalities from the payroll tax and remove the fuel tax on the bus service in St John’s and Corner Brook.
The province should pay for services provided by municipalities.