Municipalities hopeful provincial budget holds the line on municipal funding

For Immediate Release
September 24, 2020

St. John’s, NL – Municipalities Newfoundland and Labrador (MNL) is not anticipating significant change to municipal funding in the upcoming provincial budget.

MNL President Sheila Fitzgerald says that in the wake of COVID-19, many of the province’s municipalities are caught between a rock and a hard place with increasing costs and falling revenues. She is hopeful that the upcoming provincial budget, set for September 30, will hold the line on municipal funding.

“Our members, especially the smaller ones, rely upon municipal operating grants from the Provincial Government as a critical financial support measure. Without them, property tax increases are inevitable, and we know that neither the public nor our members have the appetite for increases this year,” said Fitzgerald. “The province also provides cost-share funding for municipal infrastructure through the Municipal Capital Works program which is critical to maintaining services and supporting economic activity, especially in our larger centres.”

Last week, the Federal Government announced $27.4 Million in operational funding for municipalities in the province under its Safe Restart Agreement. This will provide relief to municipalities for 2020, but they will still face hard choices heading into the 2021 and 2022 budget years especially as most municipalities are facing decreased residential assessment values.

“COVID-19 impacted all the municipal revenue streams, including property taxes, business taxes, facility rentals, programming and public transportation. It exposed the instability of these revenues for our members, both large and small. The financial impact of COVID-19 on the municipal sector is still being realized and even with cash from the safe restart money – we still have gaps. Further cuts would be catastrophic.”

Public polling commissioned by MNL indicates that 75% of Newfoundlanders and Labradorians want the Provincial Government to maintain its operational and infrastructure funding support for municipalities.