Here is our fourth response, from Newfoundland and Labrador PC Party Leadership Candidate Ches Crosbie, 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?
‘‘Thank you for asking about the issue of the provincial government paying municipal tax assessment. In principle the Crown is immune from this taxation, but provincial and federal governments often make a grant to a municipality in lieu of taxes. An example is the federal government, which makes a grant in lieu of taxes to the City of St. John’s, for which you are a councilor at large. The provincial government does not make such a grant.
I don’t like to make promises that I don’t know I can deliver on. I expect the situation between the provincial Crown and St. John’s has a history of discussion and negotiation. One of the items in this conversation would be a comparison of the economic negatives and positives from the presence of provincial public infrastructure including core government buildings, provincial corporations, agencies and tribunals, Memorial University and other institutions of learning, and so forth.
I am not familiar with any cost and benefit analysis which may have been done around this, so I am not in a position to make a categorical statement as to whether the provincial Crown should pay grants in lieu of taxes to the City. In the present difficult economic conditions, if there is a case for grants in lieu based in economics and in fairness, then consideration would have to be given to phasing in such grants.
I look forward to continuing this discussion when I may be in a position to make it more fruitful.’’