More funding needed
City of Charlottetown welcomes federal gas tax dollars but says money won’t help operational expenses
Charlottetown Mayor Philip Brown says it’s a start, but more federal dollars are desperately needed.
Brown reacted Tuesday to news that the federal government is expediting funding to municipalities experiencing a cash crunch.
Ottawa is immediately making $2.2 billion in gas tax funding available.
Charlottetown will receive about $3.3 million, per year, for the next three years. Summerside, meanwhile, is getting a total of $4.2 million for the next three years.
However, Brown is quick to point out this is not new money. Municipalities were always getting this cash, pandemic or not – it’s just coming faster and it’s coming in one lump sum.
The mayor calls it “great news’’ for capital projects such as paving. The City of Charlottetown is spending an additional $1 million (for a total of $3 million) in paving this year. It can also be used, to cite another example, for water and sewer projects.
What does disappoint
Brown is that Ottawa hasn’t relaxed the restrictions on what municipalities can use gas tax funding for. It exists to assist municipalities with capital expenses, such as the aforementioned paving and water and sewer work.
It isn’t designed for operational expenses like maintenance of buildings, heat, salaries or wages.
Brown said the Federation of Canadian Municipalities asked Ottawa to be more flexible with the funding this year.
The city is currently dealing with a shortfall totalling more than $400,000 from parking revenue. It has been free to park in the downtown the past two months, and that will continue for the rest of the month before the decision is re-examined.
Rob Philpott, chief administrative officer in Summerside, echoes Brown's concerns, saying the city is grateful for the cash infusion earlier than normal.
"The bigger challenge for all communities will be to try and mitigate the financial impacts of the pandemic, while still providing the level of services expected by residents,'' Philpott said.
Coun. Terry Bernard, chairman of Charlottetown's finance committee, said the city has already budgeted the gas tax money.
“We only get that money when we spend it,’’ Bernard said. “Our capital budget has been set. Tenders are going out, so (the announcement) doesn’t really change a whole lot.’’
The $3.3 million is being spread over the next three years and is designed to be predictable, long-term funding that normally comes in two installments, one in the spring and another in the fall. But this year municipalities will be able to access the entire 2020-21 payment later this month.
Bernard doesn’t want to sound ungrateful about the money.
He stresses this is one way to help municipalities, but more talks are needed between the province and the federal government in terms of helping municipalities deal with mounting operational losses.
The federation said in April that communities in Canada are facing a minimum of $10 billion to $15 billion in near-term, non-recoverable losses due to the pandemic and asked for at least $10 billion in emergency operating funding.
Bernard is hoping that if Ottawa doesn’t send more money, it will at least allow municipalities to use some of the gas tax money for operational expenses.
The prime minister has acknowledged gas tax funding is insufficient and has insisted more help is on the way.