Nova Scotia

N.S. ends municipal funding deal

Nova Scotia municipalities will have to pay for costs the province says it can no longer afford to cover.

Nova Scotia municipalities will have to pay for costs the province says it can no longer afford to cover.

The provincial government announced Tuesday it's ending a municipal funding agreement as of 2012-13.

"We simply cannot afford these additional costs," said John MacDonnell, minister of municipal affairs.

The previous Conservative government signed a seven-year funding deal with municipalities in 2007. The province would gradually assume municipal contributions for public housing and jails. Municipalities would limit their education contributions to the consumer price index.

But MacDonnell said times have changed.

"Nova Scotia is facing a different financial reality than it was in 2007. The contribution rates set in the MOU at that time are no longer realistic," he said.

The NDP government says the deal has cost the province about $21.5 million already and would have cost more than $100 million in the end.

The Union of Nova Scotia Municipalities says downloading those costs will likely mean layoffs, service cuts and even tax increases.

"We're going to do a recap about what went on today to try to really get a handle on where we're going," said Port Hawkesbury Mayor Billy Joe MacLean, president of the union.

"We've got to go home and cut staff, cut benefits, cut services, raise taxes."

The province says municipal funding won't change in the upcoming budget.