The mayor of the Cape Breton Regional Municipality says budget talks have halted and the books cannot be balanced.
As it currently stands, Cecil Clarke says the municipality faces a shortfall of $4.5 million.
He blames it on what he calls financial barriers imposed by the bureaucracy of the Nova Scotia government.
"For example the education charge against CBRM has increased by $520,000 this year; our equalization grant from the province is being reduced by $317,000, and we're receiving less than 45 per cent of the annual entitlement," says Clarke.
Clarke said that the bureaucrats are not providing the right information to the Minister.
He's particularly perplexed about one proposed solution.
"When advised of our concerns, officials within the Service Nova Scotia Municipal Relations suggested that CBRM could increase tax rates by 16 per cent."
Clarke says that's unacceptable. He says major cuts to services are also out of the question because CBRM is operating close to the bone already.
Clarke will sit down with council next week to review what the options are.