January 13, 1999
(Municipal and Provincial Affairs)

Province announces response to water tax issue

Lloyd Matthews, Minister of Municipal and Provincial Affairs, announced today that the provincial government will pay the full level of water tax on public buildings, educational facilities and health care facilities to the City of St. John's. He said: "As a follow-up to the commitment made in March 1997, we have completed a review of water tax rates on public buildings in the province. Government has decided to pay the City of St. John's for water consumption on all public buildings at the rates currently applied to commercial enterprises, federal government properties and the provincial buildings that are metered. Where buildings are not metered, the province will work with the City of St. John's to ensure fair payment of the water tax. We expect that this will translate into roughly $700,000 of tax revenue in addition to the $174,000 that government is currently paying to the city."

The minister said that today's announcement is a positive one. He said: "We are announcing a policy that we believe to be fair and equitable. This decision resolves an inequity for the City of St. John's relative to other municipalities concerning the application of water tax on public buildings."

He said that the provincial government is continuing with its comprehensive review to address the matter of property taxes to municipalities for provincial government properties or grants in lieu of taxes. This recommendation was identified in the Russell Report and is being followed up by government.

He added that the provincial government is interested in establishing a cooperative working relationship with city council in an effort to benefit all residents of St. John's.

Media Contact: John Doody, Director of Communications, (709) 729-3142.

1999 01 13 10:15 a.m.