Charlottetown, Summerside, Stratford and Cornwall will all see their provincial funding cut by five per cent this year, Finance Minister Wes Sheridan said Wednesday.
The next eight smaller municipalities will be cut by three per cent, he said.
The municipalities were notified Tuesday, Sheridan said, so they would be able to make the necessary changes to their own upcoming budgets.
"Our rapport will help with accepting these cuts. I don't expect anybody to be jumping up and down. But they understand the fiscal constraints that we're under, and they want to be part of the solution as well," Sheridan said.
"So, it will be a tough pill to swallow, there's no question about it. But they understand that we have been there with them and have changed a number of different policies with regard to our actions with municipalities and they appreciate what we've done in the past."
Sheridan said it was felt a five per cent cut would be too much for the smaller communities.
The minister said the cuts will be in place for one year.
In January, Sheridan reported that the provincial deficit for the current fiscal year was expected to hit $73.4 million, up more than $30 million from projections at budget time in the spring,