It’s been nearly six years since the Liberal government unilaterally changed the funding agreement between the provincial government and its municipalities.
What has followed could likely be best described as six long years of bitter divide between the two levels of government – at least on the issue of tax funding.
It’s a battle in which, for most Islanders, it is hard to choose a side, or at least understand. Either way, P.E.I.’s Finance minister said this week he hopes to have a revenue sharing arrangement struck with the municipalities within the next two months.
If only it were that easy.
Wes Sheridan made the statement about the potential deal in response to a line of questioning by Summerside Mayor Basil Stewart during this week’s breakfast meeting with the Greater Summerside Chamber of Commerce.
The province and the Island’s municipalities have argued for years over how best to share tax revenue and to hear that the disagreement might indeed finally be over is welcome news – even if it is a little optimistic. Despite how divisive the issue has been and how far away the sides have seemed in the past, Sheridan remains upbeat about the prospects of signing a new deal soon.
He described the current efforts as making good headway and that a new agreement struck “will be a very fair and equitable way of sharing that tax.”
A pair of Prince County mayors didn’t disagree, but remain a little more guarded. Kensington Mayor Gordon Coffin said there remain hurdles to overcome, while Stewart said he will wait to see how it unfolds.
It’s hard to say which side of this debate is actually right. But what we do know is this: 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 and many municipalities, including Summerside, have seen their funding shrink. The province changed the deal without the agreement of the municipalities.
The province was wrong to change the deal in 2008 without consultations and negotiations. So even if the Liberals were justified in doing so, their actions suggest otherwise and those actions will continue to taint the entire process until it is finally resolved – which we hope is soon.