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December 10, 1998
(Municipal and Provincial Affairs)


The following statement was issued today by Art Reid, Minister of Municipal and Provincial Affairs. It was also read in the House of Assembly:

I rise today to make a statement in response to comments that were made by Mayor Andy Wells of St. John's with reference to the issue of water taxes on provincial government buildings in the City.

At Monday night's council meeting, Mayor Wells suggested that the city's grants to community groups could be on the chopping block if government does not agree immediately to pay an extra $2.2 million to the City of St. John's.

The government and the people of Newfoundland and Labrador are not going to be held hostage by the mayor of the City of St. John's. What the mayor is engaging in here is political terrorism. It is despicable for the mayor of St. John's to place the burden of the city's shortfall on the backs of community groups serving the socially disadvantaged.

This government has been more than fair to the City of St. John's and, the record shows it. I will now provide the House with information to substantiate this claim.

Here is a list of what this government has done for the City of St. John's in 1998:

  • $68.2 million for completion of the Outer Ring Road as part of the Rails to Roads Agreement;

  • $16 million for the Civic Centre Project;

  • $5.9 million upgrade to Memorial University Utilities Annex;

  • $5.6 million annual debt servicing;

  • $5.3 million annual municipal operating grant;

  • $5 million in 1998 capital works projects;

  • $3.2 million transitional grant for fire department;

  • $3 million for harbour clean-up;

  • $400,000 for landslide prevention, Battery

In addition, the province has also provided $132,000 in special assistance grants. This total would include $86,000 for St. John's Boundary Expansion and $10,000 for Iris Kirby House.

I think it's important to put this entire matter in its proper perspective.

The city claims that I made a commitment to pay them water and sewer tax at the expiration of government's firefighting grant which is due to expire on March 31, 1999. The amount of this firefighting grant is $3.2 million over two years.

On September 9 of this year, the mayor of St. John's wrote the province with respect to the matter of taxation on provincial properties. In response, the premier reaffirmed government's commitment to devise an approach that is fair and equitable to all municipalities. The premier further assured the mayor that upon completion of this study, the Minister of Municipal and Provincial Affairs will make appropriate recommendations to Cabinet and that a decision with respect to this matter will be provided to municipalities at the earliest possible time.

There is a basis on which water taxes are currently being paid to the City of St. John's, the cities of Corner Brook and Mount Pearl. This is not just a matter of paying water tax in Corner Brook and not St. John's. There are anomalies associated within the existing system and appropriate steps are being initiated to correct them.

The mayor of St. John's should not expect any radical changes that would necessitate the opening up of provincial coffers prior to the announcement of his next municipal budget.

I have asked my colleagues in the House of Assembly representing the City of St. John's to join me in a meeting with the city in an attempt to address this issue.

1998 12 10 2:35 p.m.


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