Nova Scotia

Nova Scotia municipal shortfalls of $66.5M could lead to tax hikes

The Nova Scotia Federation of Municipalities is warning that looming municipal deficits will lead to significant tax increases if communities do not receive grants from the federal and provincial governments.

Without grants, average tax increase next year could be more than 7.1 per cent, says municipal group

Pam Mood is president of the Nova Scotia Federation of Municipalities. (Paul Poirier/CBC)

Municipalities across the province face a total shortfall of $66.5 million, according to a new report by the Nova Scotia Federation of Municipalities that examines the financial impacts of COVID-19.

The federation is warning the looming deficits will lead to significant tax increases if communities do not receive grants from the federal and provincial governments.

The overall total is based on numbers from 47 of 49 municipalities, representing 99 per cent of the total population of Nova Scotia.

The shortfalls are being blamed on increased costs for personal protective equipment ($3.3 million), as well as lost revenues in services such transit ($23.1million), recreation ($8.4 million) and solid waste ($1.5 million).

There has also been a decrease in deed transfer taxes ($11.7 million) and penalties and fines ($4.7 million).

"We have slashed every possible thing we can, including cutting employees," said Pam Mood, president of the federation and mayor of the town of Yarmouth. "We are not in the habit of asking for things we don't absolutely need."

Possible tax hikes

The federation's report states if municipalities do not receive grants, the average tax increase next year will be 7.1 per cent.

"That tax hike would be higher in towns," said Mood. "And huge tax hikes right now are just the wrong thing when we're trying to recover" from the pandemic.

The federation points out that part of a $14 billion transfer program announced by Ottawa is earmarked for municipalities, but Mood said those municipalities need details on specific grants as soon as possible.

Municipal Affairs Minister Chuck Porter said Thursday the province is "well aware" of municipalities' needs.

He noted the $380-million loan program Nova Scotia offered municipalities at the end of April can be used for operating costs. The loans have three-year terms and 1.1 per cent interest rates.

When it comes to grants, Porter said he can't yet give details on what the province will be able to provide since they're still in discussions with Ottawa.

"We need to work through the details of what the federal government is offering, whether it's cost-matching ... I don't know what that will be," Porter said.

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