March 22, 2000
(Municipal and Provincial Affairs)

Financial support for municipalities

Joan Marie Aylward, Minister of Municipal and Provincial Affairs, announced today that government will continue its financial support for municipalities in the province. This year, the Department of Municipal and Provincial Affairs will spend some $92 million to support municipal governments in this province through its Municipal Operating Grants, Debt Servicing and Debt Relief Programs. "On a per household basis, this amounts to a contribution of about $530 for every household, in every incorporated community in the province," said the minister.

Further to a commitment made last year, government has maintained the level of Municipal Operating Grants at $21.5 million annually. These are unconditional grants which the province pays to municipalities to help them offset their operating costs.

The province also provides substantial financial support to municipalities to offset the cost associated with water and sewer servicing, paving of local roads and other debt related to investments like recreation facilities. In 2000/01, the province will provide debt subsidies to municipalities totaling $61 million. Some $41.6 million of this funding is the province�s contribution towards debt payments associated with water and sewer servicing in municipalities. This provincial contribution helps keep the cost of water and sewer infrastructure within the reach of municipalities and citizens of the province.

"Government has again funded the Debt Relief Program in the amount of $5 million," said the minister. This brings the amount allocated for this program to $22 million. The program helps municipalities, which are having significant financial difficulty, to develop sound financial plans, pay down or re-structure their debt, and regain financial stability. To date, the department has finalized agreements with 63 municipalities while 69 more agreements are in various stages of negotiation.

The minister noted the significant contribution the province makes to municipal governance and the commitment which the province is making to help ensure that local governments have the means to govern effectively. This includes financial support, empowering legislation and a commitment to help municipalities with their infrastructure needs.

Media contact: Glenn Bruce, Communications, (709) 729-1983.

2000 03 22