No action on municipal funding concerns for 2 more years

The mayor of St. John's will have to wait for provincial government action on revenue-sharing concerns, Finance Minister Tom Marshall says.

Finance minister says issue will not be revisited while province in deficit

Finance Minister Tom Marshall speaks with reporters before delivering the 2012 Newfoundland and Labrador budget. (Rob Antle/CBC)

The mayor of St. John’s will have to wait for provincial government action on revenue-sharing concerns, Newfoundland and Labrador's Finance Minister Tom Marshall says.

"We’re running a deficit," Marshall told reporters in the budget lock-up Tuesday morning. "We expect to have one next year. When we get back to surplus, we’re prepared to sit down and look at a fiscal framework. We’re prepared to look at a lot of things which we can’t do while we’re in deficit."

The province is not forecasting a return to surplus territory until the 2014-15 fiscal year.

Marshall referenced this year’s expected provincial deficit of $258.4 million when asked about municipal calls for a better arrangement.

"I understand the mayor of St. John’s has a surplus of $10 million," Marshall said. "Maybe he should help us out."

The province says it will continue to provide a $4.6 million top-up over and above the $17.8 million annual allocation given to communities through municipal operating grants.

A government press release, meanwhile, pledged that the province will continue to consult with municipalities on the development of a new formula that is equitable and sustainable.

'Breaking point'

Dozens of mayors and councillors from across Newfoundland and Labrador recently demanded a new financial agreement with Confederation Building.

"The status quo is no longer acceptable — we need to move forward," Churence Rogers, president of Municipalities Newfoundland and Labrador, said to loud applause after a two-hour, closed-door meeting last month in St. John's.

Milltown Mayor Georgina Brushett said in March the mood at the meeting showed that municipal leaders are fed up with long-delayed promises.

"This is fantastic. Absolutely," Brushett said. "I think this is something that should have happened a long time ago."

St. John's city council has a series of concerns with provincial revenue-sharing arrangements. Mayor Dennis O'Keefe has complained that the province does not pay its fair share for municipal services. He met with the premier on the issue in February.

O'Keefe wants a share of the gas tax, elimination of the province's break on building permits, and a break on the harmonized sales tax that the province collects from city hall.