Municipalities in Newfoundland and Labrador are not in a fiscally stable position. While they do have to produce annual balanced budgets to the Government of Newfoundland and Labrador, they do so at the expense of service delivery, shifting their priorities and residents.
Municipal Operating Grants (MOGs), a provincial per capita operational allotment to municipalities (with the exception of the largest seven in recent years) are a core tool for municipal fiscal stability. In the mid-1990s, MOGs to the sector exceeded $50 million. A decade ago, they dropped below $20 million and have remained at $22 million since 2015.
The consumer price index indicates that today’s prices are 1.25 times as high as they were in 2015. Taking inflation into account, $22 million is equivalent in purchasing power to nearly $28 million in 2023. The provincial MOG allotment has not accounted for inflation. Government committed to protecting that investment in last two budget cycles; however, it is not enough. Municipalities need access to MOGs which account for inflation. They cannot continue to do more with less.
MNL is advocating for an increase in MOGs to account for inflation. It is demanding that government be transparent and clear in the development of a policy around the MOGs, which details how they are and should be calculated now and into the future. MNL requires a seat at this decision-making table.