News release

Proposal Addresses Municipal Inequities

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

?SERVICE N.S./MUNICIPAL RELATIONS--Proposal Addresses Municipal Inequities

Municipal leaders are looking at a proposal that would see a major shift in the way services are provided and funds distributed throughout Nova Scotia.

The proposal is the result of the Roles and Responsibilities Review process and is now being presented to all 55 municipalities for review.

"This proposal takes aim at very basic inequities in this province," said Angus MacIsaac, Minister of Service Nova Scotia and Municipal Relations. "Some areas of the province are booming while others are struggling just to provide basic services. One of the things I like about this proposal is that it is based on the principles of fairness and equity to all regions. All Nova Scotians should benefit from the new wealth in our province."

The core of the proposal would have the provincial government take on $21.9 million of costs associated with public housing, corrections services and increases in its grants in lieu of property taxes for university residences.

In exchange, municipalities would take over funding the $22.2 million municipal equalization program. At the same time, the equalization formula would be modified for more equitable distribution among municipalities. The province would also create and fund a $2.3 million foundation grant to help towns with upkeep of roads.

"The proposed changes would benefit the majority of municipalities and translate into either an increase in their level of services or a decrease in taxes," said Mr. MacIsaac. "The decision to go forward will be based on the input of all 55 municipal units."

All municipalities will have a month-long consultation period to review the proposal and provide input to the Roles and Responsibilities Steering Committee.

The Roles and Responsibilities Review was started in 1998 and its mandate is to conduct a comprehensive review of municipal and provincial service responsibilities, delivery, and funding. The deadline for a recommendation from the steering committee is April 2001.

For Broadcast Use:

Municipal leaders are looking at a proposal that would see a

major shift in the way services are provided and funds

distributed throughout Nova Scotia.

The proposal, which was distributed to 55 municipalities,

is the result of the Roles and Responsibilities Review process.

Angus MacIsaac, Minister of Service Nova Scotia and

Municipal Relations, says the proposed changes would result in

most municipalities seeing either an increase in their level of

services or a decrease in taxes.

All municipalities have one month to review and provide

input on the proposal.

The Roles and Responsibilities Review''s mandate is to

review municipal and provincial service responsibilities,

delivery, and funding.

Fact Sheet

Background

  • Provincial-Municipal Roles and Responsibilities Review was started jointly between the province and Union of Nova Scotia Municipalities (UNSM) in 1998.

  • Mandate was to conduct a comprehensive review of municipal and provincial service responsibilities, delivery, and funding.

Social Services and Assessment

  • Provincial government assumed social services costs from municipalities in 1998 at an expense of $44 million, to be phased-in over five years.

  • Half of the municipal social services savings ($22 million), is going to Halifax Regional Municipality (HRM).

  • There remains $17.6 million to be picked up by the province from all municipalities between 2001 and 2003, with $8.8 million of these savings to go to HRM.

The Proposed Solution

  • The proposal is a result of the joint Roles and Responsibilities Review between the province and UNSM.

  • Government of Nova Scotia is assuming the municipal contributions to public housing ($6 million per year) and corrections ($14.6 million per year), as well as paying the full grant in lieu payments to municipalities for university residences ($1.3 million).

  • Equalization grant ($22.2 million) will be funded and self- directed by municipalities.

  • Provincial government has created a foundation grant of $2.3 million to assist towns with the upkeep of roads.

Other Factors

  • When only the final two years (2001-03) of the social services "upload" and the assessment "download" is factored in, the net cost to Province of Nova Scotia will be $5 million.

  • If the business occupancy tax is eliminated (a separate process currently out for consultation), the federal money this is expected to leverage into municipalities will almost completely offset any of the costs from the proposed exchange.

  • HRM will have the biggest costs to absorb. This will be offset by corrections, housing, and grant in lieu costs to be picked up by the province. When social services costs and assessment costs are factored in, this amount is $2.9 million.

  • If the Business Occupancy tax is eliminated, the federal government is expected to increase federal grants in lieu payments to HRM, estimated at $3.9 million, making HRM a net winner by $1 million annually.

  • $2.9 million impact on HRM is less than 1 per cent of HRM''s annual budget.

  • Cape Breton Regional Municipality will gain $4.1 million under this proposal.

  • Positive financial impact on 46 municipalities, out of 55 in the province.

  • Proposal significantly assists those communities in greatest need without being punitive to the wealthy communities or the province.

Looking Forward

  • If remained at status quo, the results would be devastating to some parts of the province. For example, CBRM is facing a financial crisis without assistance and a number of smaller communities may not survive in the long run.

  • First time in Canada that a municipal equalization will be based on property taxes, rather than income taxes.

  • Proposed solution combines resources from all three levels of government.

  • Consultation period of February 28 - March 23, 2001.

  • Twelve-month notice due in April 2001.

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