SUMMERSIDE – Two Prince County mayors are looking for a change in the provincial funding formula when the Ghiz government tables it’s 2014 budget, Tuesday.
© Mike Carson/Journal Pioneer
Summerside Mayor Basil Stewart.
Summerside Mayor Basil Stewart and Kensington Mayor Gordon Coffin the government to scrap the current grant program and revert to providing tax credits to municipalities.
A deal with the Liberal government of Catherine Callbeck in 1995, called the Comprehensive Urban Services Agreement (CUSA), provided tax credits to municipalities based on development. Under the agreement, the arrangement could not be changed without being mutually agreed upon.
In 2008, the province opted to replace CUSA with a grant system to municipalities.
Under the grant system the city has received less provincial funding. Between 2008 and 2013, the city received $1.3 million less under the grant program.
In his 2014 municipal budget address last month, Deputy Mayor Bruce MacDougall, chairman of the city’s financial services committee, said Summerside projects it will lose an estimated $7 million in revenue by 2018 if the current funding formula remains unchanged.
“What’s going to be interesting to watch for is to see if there’s anything in the budget in regards to municipalities revenue sharing,” Stewart said. “It’s a big deal with all municipalities on the Island. Here in Summerside, over the last few years, we’ve been losing five per cent of our property taxes to the province.”
Stewart said city council has been working hard over the last few years to convince the province to go back to a tax credit system from the grant.
“We don’t even like the word grant because it’s not a grant,” the mayor said. “It’s the property tax the people pay that the city uses to conduct its business. I would hope there would be something in there in getting municipalities back to our original tax credit system.”
Stewart said he has talked to the mayor of Stratford and that municipality stands to lose $500,000 this year if the funding formula remains unchanged.
“I would say that Charlottetown will see $2.5 million (in losses) and ours may be a little over $1 million,” Stewart said.
Coffin agreed with Stewart, nopting that there needs to be a change in the revenue sharing agreement under the Municipalities Act.
Coffin said the while the Town of Kensington has not lost revenue it hasn’t benefited from revenue generated by new development.
“We haven’t gained anything, but there’s been a big impact on some of the other Island communities,” he said.