Here is our third response, from Newfoundland and Labrador NDP Party Leadership Candidate Alison Coffin, to my two questions about grants in lieu of property taxes:
1. In principle, should the province provide 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 implement grants immediately, how would you implement grants over time? For example, would you pass legislation to phase in grants over time?
« Short answer: Yes, the province should be providing grants in lieu of taxes. Our municipalities struggle to provide infrastructure and services to residents as it is, and grants would help ease that stress.
Longer answer: While it is clear that some form of grant in lieu is the fair thing to do, we’d have to be very careful about how it is implemented, and it would have to be implemented fairly across all the province’s municipalities. I would not want, for example, for grant legislation to further eat into the budgets of provincially-funded organizations like Memorial University, health and school boards, and the public college system.
One of the first steps I would encourage is the rebate to municipalities of sales and other taxes, as is commonly done among the various levels of government. I would also be very interested in exploring the best way to rebate a predetermined percentage of gas tax to municipalities. And I would certainly urge an approach to permitting and new building more in line with the norm in municipalities.
I also think that if the federal or provincial government introduces legislation that affects the budget of municipalities, the legislation should include funding to help the municipalities comply with the new laws. Representatives of smaller NL communities have been telling me about the difficulty they’re facing to meet federal wastewater requirements, for example.
But back to the grant in lieu. The process would start with determining what a fair amount of grant would be. This would be a more complicated process in St. John’s than in most other communities, but I’m certain we could come up with a number. Within a year of an election, I would hope, we would have come to an agreement on a number, an escalation rate, and whether the new grant would replace or augment the current Municipal Operating Grants. One consideration is that not all municipalities have provincial buildings, but all rely on the MOGs.
As you suggest, it might not be possible to implement the full amount of whatever the two levels of government agree on immediately, but a phase-in over 10 years is the maximum that should be contemplated; ideally, it could be done much more quickly. »