Nova Scotia

Federal budget gas tax bonanza could mean millions for Halifax

Halifax Mayor Mike Savage said Ottawa's decision to double the gas tax allocation to municipalities was unexpected but would be a tremendous opportunity for municipalities that would make a big difference.

'That's a lot of money and it will make a big difference,' says mayor

Halifax Mayor Mike Savage expected more money for municipalities in Tuesday's federal budget, but he was caught completely off guard with the Trudeau government's announcement it would double the amount of gas tax money it is willing to share with cities and towns. (Steve Berry/CBC)

Halifax Mayor Mike Savage expected more money for municipalities in Tuesday's federal budget, but it turned out even better that he imagined.

Savage was caught completely off guard with the Trudeau government's announcement it would double the amount of gas tax money it is willing to share with cities and towns.

"There were a number of things we were getting inklings that were going to come for municipalities," he said.

But the doubling of gas tax revenue to municipalities for a year "wasn't something that we expected," Savage said.

The federal government has earmarked $2.2 billion in a "one-time transfer" to municipalities, through the Gas Tax Fund.

"It's a tremendous opportunity for all municipalities and will make a big difference," said Savage.

'That's a lot of money'

As far as Halifax was concerned, Savage expected the windfall to dramatically increase the municipality's ability to spend on capital projects.

"Our share of the gas tax was north of $25 million and, if it's doubled, then obviously it's going to be north of $50 million for one year," he said.

"That's a lot of money. I'm sure everybody, including 16 other councillors, are going to have a wish list," Savage added with a chuckle.

He is also happy the money will be flowing directly from Ottawa, rather than through the provincial government.

"It means we will be less dependent upon the provincial government to determine our priorities," Savage said. "We will have the opportunity to say ourselves what we think the priorities are. After all, we get elected as well."

The other advantage of the Gas Tax Fund, according to the mayor, is that the federal government doesn't require a municipality to match funds in order to get the money.

During capital budget deliberations earlier this winter, council shelved millions of dollars worth of needed improvements and repairs.

Money could take pressure off financial reserves

Savage said this extra money would help pay for projects the municipality was willing to dip into reserve funds to finance.

"We have a strategic capital list that goes into the hundreds of millions of dollars," said Savage. "It won't be hard to identify things that it should go on."

But Savage doesn't expect council to go on a spending spree.

"It doesn't mean that we're all of a sudden going to be profligate with our spending," he said. "It doesn't mean that we can go out and necessarily spend what we weren't going to spend."

Although the federal Liberals are scheduled to go to the polls this fall in search of a second mandate, Savage isn't worried this money will evaporate if another party takes over the reins.

"My assumption is that means that money will flow to us and we'll have an opportunity to allocate as we see fit."

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