March 20, 1997 Strengthening Local Government- Budget Initiatives Municipal and Provincial Affairs Minister Art Reid says the Budget Speech contained many positive announcements that will serve to strengthen local government and enable municipalities to effectively respond to future challenges. The minister said government has taken the position that a portion of the savings realized through reductions in the Municipal Operating Grant (MOG) and water and sewer subsidies will be channelled back to assist those municipalities which, at this time, are not capable of solving their financial problems on their own. Many of these municipalities are rural communities which are experiencing difficult economic times, Mr. Reid noted. Approximately 150 of the province�s 290 incorporated municipalities have debt servicing costs in excess of 30% of their revenues and will be eligible for financial assistance. In addition to debt reduction, the department will also encourage the refinancing of their long-term debt either through banks or lending institutions. The minister said the phased reduction of the MOG will allow other municipalities time to make the necessary adjustments. "The announcements in the Budget are consistent with the view that the department must work more with, rather than for, local government and that municipalities must move to positions of self-reliance," Mr. Reid said. The minister indicated the debt reduction program, combined with the following initiatives announced in the Budget, will serve to strengthen local government and benefit the entire province.
Contact: Gary Callahan, Director of Communications, (709) 729- 3142.
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