Here is our first response from Tony Wakeham, Newfoundland and Labrador PC Party Leadership Candidate to my two questions about grants in lieu of property taxes:
1. In principle, should the Province pay grants in lieu of taxes to municipalities?
If so, how can the Province move to implement grants?
2. If the current financial situation is too difficult to introduce grants immediately, how would you implement grants over time? For example, would you pass legislation to phase in grants over ten years?
« Supporting municipalities will be a priority of a Government led by me. Strong, vibrant communities in urban and rural areas of this province are key to growing and strengthening our economy. When I become Premier, I plan to review the Municipalities Act and Regulations to ensure that they support the efficient operations of municipalities and the taxpayers who live and pay taxes in those communities.
The Provincial Government provides various supports to municipalities through such funding mechanisms as municipal operating grants, cost sharing of infrastructure projects and various community grants. Although the Provincial Government does not pay grants in lieu of taxes to help fund municipal services in those communities where they have buildings, there is a benefit of the Provincial Government operating a service in a municipality in terms of such factors as job creation and attracting people to either live or access services in that municipality.
The issue of the Provincial Government being exempt from property tax is not new and has been discussed for many years. The current fiscal situation creates a barrier to considering any new expenditures for the Provincial Government at this time. When the financial situation improves, I would be prepared to have further discussion around grants in lieu of taxes. There would be a number of factors that would have to be considered such as, size, financial stability, infrastructure, community needs, etc. Based on these discussions, next steps and implementation considerations would be developed. »
I’ll have more to say about this later, but for the time being I’d like to thank Mr. Wakeham for taking the time to think about this important issue!