Independent MHAs call for province to pay its fair share to municipalities

For Immediate Release 

January 16, 2014 

Independent MHAs call for province to pay its fair share to municipalities

St. John’s—Independent MHAs Christopher Mitchelmore (The Straits-White Bay North) and Dale Kirby (St. John’s North) are calling on the provincial government to make long overdue changes to the fiscal relationship between the province and municipalities. 

The MHAs point out that while proposals have been put forward by Municipalities Newfoundland and Labrador and individual municipalities over the past two years, the province has failed to develop a long-term strategic plan for the municipal sector. 

“When the province purchased the Battery Hotel and the Johnson Insurance buildings, these buildings became tax exempt resulting in the loss of hundreds of thousands of dollars to the City of St. John's,” said Kirby. “In the meantime, the provincial government has been silent on the proposals made by the City over a year ago. That silence speaks volumes.” 

“Many rural towns are challenged with declining populations and fewer businesses, resulting in a smaller tax base for revenue generation,” states Mitchelmore. “Because of its unwillingness to rebate its portion of the Harmonized Sales Tax (HST) as the federal government has done, the provincial government is undermining efforts to build sustainable rural communities.” 

The Independent MHAs are asking that the province provide municipalities with the same HST rebate that the federal government currently provides to municipalities. This move alone would provide for an increase of approximately 10% in municipal budgets.  

“Instead of continuing to download costs to residents, in the City of St. John's, for example, an HST rebate to would allow room for a 1 mill reduction in the current rate paid on homes,” says Kirby. “There are many ways to provide relief for those who are challenged by current housing costs. This is clearly one of them.” 

"Budget 2014 must present real solutions as many municipalities struggle to maintain eroding infrastructure and provide basic services such as clean and safe drinking water and decent roads," says Mitchelmore. "The status quo of maintaining Municipal Operating Grants (MOG) and one time capital works funding for urban municipalities is unacceptable."   

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For more information, please contact: 

Christopher Mitchelmore, MHA                        Dale Kirby, MHA 

cmitchelmore@gov.nl.ca                                           dalekirby@gov.nl.ca 

Tel: 709-454-2633                                                        Tel: 709-729-6921