P.E.I. municipalities meet to mull over money and mergers

The way the province funds P.E.I.'s 75 municipal governments is about to change — providing more "predictable, sustainable funding," with an incentive for communities to expand, said Minister of Communities, Land and Environment Robert Mitchell at a gathering of the Island's municipal leaders Monday in St. Peters, P.E.I.

• P.E.I. Federation of Municipalities anxious for infrastructure money

• Wade MacLauchlan promises municipalities talks on stable funding

Municipalities currently receive annual provincial grants that have remained stagnant. The new system of tax credits will give communities an incentive to expand — as they grow, so will their tax base, and the amount of money they're rebated. 

"For the past eight years, municipalities have been held to a frozen level. This is an endeavour to show we are partnering in good faith and moving forward," said Mitchell.

More stable funding is something P.E.I.'s Federation of Municipalities has been asking for for a while.

"If your community grows, if the tax assessment grows, you'll see the value for that," said Mitchell. "A grant system of X amount of dollars kind of remains X amount of dollars, with no real growth built into that." 

The plan is getting the thumbs up from Charlottetown Mayor Clifford Lee, who points out municipalities will now know how much they're getting and when. 

"At least with a tax credit system, you're going to be able to predict reasonably well what your revenues are going to be next year and the year after," said Lee. 

But some smaller towns and communities argue the model won't work well for them.  

"Many of the small communities on the Island are not growing, they're shrinking. So we are faced with expenses that aren't shrinking and revenue that is shrinking," said Jim Evans, chair of the Community of Murray Harbour. 

 'We need help persuading them'

Evans put forth a resolution at today's meeting asking for more provincial support, especially for smaller Island communities whose planning is not advanced.

"We need help from the government in getting these other communities to come and talk to us," Evans said. "And we need help persuading them of the need for amalgamation and the benefits they'll get from it."  

"The government needs to make it very clear that amalgamation is going to happen," he added. 

If communities such as Murray Harbour take in outlying communities, its tax base will expand, administrative costs will be reduced, and the municipality will gain access to a larger pot of federal infrastructure money, which Evans said could create jobs in the area — "something we're very keen on doing."

Mitchell said the province plans to introduce the new funding model this fall.