News release

Province Will Not Change Municipal Funding in 2011-12

Service Nova Scotia and Municipal Relations (Oct. 2000 - March 2014)

The province today, March 22, informed the Union of Nova Scotia Municipalities that municipal funding will not change in the 2011-12 budget.

Starting in 2012-13, however, the province will stop taking on additional costs for public housing, corrections and education that it had started assuming under a 2007 agreement with municipalities.

"Nova Scotia is facing tough challenges as we work to live within our means, but we are not going to download that problem to municipalities. Amending this arrangement to maintain an ongoing contribution from municipalities is both necessary and fair," said Service Nova Scotia and Municipal Relations Minister John MacDonell. "We are not reducing funding to municipalities, but, as the agreement sets out, the province cannot be expected to take on additional costs in times of financial hardship.

"We are asking that municipalities continue to contribute to these important services. The province cannot afford to continue to accept these increased costs."

In 2007, the Union of Nova Scotia Municipalities and the province signed a memorandum of understanding, which led to a seven-year funding arrangement that took effect in 2008. Under the agreement, municipal contributions to public housing and corrections were to be gradually assumed by the province. That agreement also limited increases in municipal contributions to education to the consumer price index.

Starting in 2012-13, municipalities will be required to continue funding public housing at the 2010-11 level of about $7 million. Municipalities will also fund corrections services at about $14 million. Before the MOU, municipalities were required to pay $17.4 million for corrections alone.

To date, this agreement has cost the province about $21.5 million. Over the seven-year life of the agreement, it could have cost the province more than $100 million.

"We're very aware that it's the same Nova Scotia taxpayer who foots the bill for both provincial and municipal services," said Mr. MacDonell.

The province is providing municipalities with 12-months notice of the changes, so they can plan accordingly. No changes to the MOU will take effect until 2012-13.

In 2012-13, municipal contributions will be as follows:

  • about $7 million for public housing
  • $14 million for corrections services, $3.5 million less than they were in 2007-08
  • the province intends to hold education contributions at the 2010-11 rate.

Municipalities receive funding from a number of departments for various programs and services. Since 2007, the province has committed $44 million for community recreation facilities from the province's B-FIT program, and more than $50 million toward additional policing services.

The MOU will continue to offer benefits to municipalities:

  • the province will continue to reduce costs for municipalities as outlined in the MOU for 2011-12
  • municipalities will continue to pay $3.5 million less for corrections than they did before the MOU came into effect
  • corrections contributions will no longer be indexed by the consumer price index.

The province will table these amendments during the spring session of the legislature.