Municipal Affairs
April 25, 2008

Improved Cost-Share Ratios to Benefit Municipalities

To support strategic municipal infrastructure investments throughout Newfoundland and Labrador, the Provincial Government will increase its capital budget commitment by $34.4 million annually, for a total provincial commitment of $84.3 million per year. This will result in a provincial investment in municipal infrastructure of $252.9 million for 2008-2011, an annual increase of 69 per cent.

"As part of this commitment, our government is introducing improved cost-share ratios for municipalities for all types of infrastructure which will provide greater opportunity for municipalities to move forward with their identified infrastructure requirements," said the Honourable Dave Denine, Minister of Municipal Affairs. "These new cost-sharing arrangements will significantly simplify the application process, supporting our government�s commitment to reducing red tape and bring uniformity to cost-sharing on all types of infrastructure investments. This effort will positively impact smaller municipalities and is a strong indicator of our government�s commitment to rural communities in Newfoundland and Labrador. Smaller communities will benefit from access to better cost- share arrangements with the province and allow greater opportunity to move forward with otherwise unaffordable infrastructure initiatives."

The new cost-share ratios apply only to new projects funded in 2008 onwards and cannot be applied retroactively. The new cost-share ratios will establish uniform ratios based on the population of municipalities, and will provide a streamlined and simplified approach to accessing capital works funding on a go-forward basis and are identified as the following:

  • 90/10 for populations less than 3,000 (258 municipalities, 31 per cent of provincial population);
  • 80/20 for populations between 3,000 and 7,000 (16 municipalities, 14 per cent of provincial population);
  • 70/30 for populations greater than 7,000 (9 municipalities, 43 per cent of provincial population)
  • Local Service Districts in the province would also qualify for funding supports on approved projects.
  • In future, the municipal contribution to projects will be fixed in accordance with the above ratios and will be unaffected by the availability or eligibility of projects for federal funding. These new cost-sharing ratios alleviate the disparity caused by the availability of federal funds for only some communities and only certain types of infrastructure investments.

    Graham Letto, President, Municipalities Newfoundland and Labrador, is pleased with the level of funding commitment and benefit that the change to the cost-share ratio will bring for municipalities. "Municipalities continue to face challenges with their fiscal capacity and in their ability to cost-share, and many continue to struggle with declining population bases and dwindling tax bases. This is a positive move by government to help address infrastructure deficits, and will provide opportunity to improve and grow services for residents through investment in targeted infrastructure."

    The Department of Municipal Affairs will begin to implement an infrastructure investment strategy that targets resources inline with the needs and capabilities of municipalities. This strategy will help support the sustainability of smaller rural municipalities, support investment in the province�s growth centres, while maintaining support for basic services such as water and sewer and targeting the development of priority infrastructure. This includes the Corner Brook Water Treatment facility, and Happy Valley-Goose Bay Sewage Treatment Plant for which $7 million has been identified annually, plus $5.5 million in support of the Provincial Waste Management Strategy.

    "We remain committed to working with municipalities to address challenges, and are listening to the issues and concerns that exist in communities. While we can not do everything at once, these are strong initiatives and we are making progress in strengthening municipal services and infrastructure throughout Newfoundland and Labrador," said Minister Denine.


    Media contact:

    Heather MacLean
    Director of Communications
    Department of Municipal Affairs
    709-729-1983, 690-2498

    2008 04 25                                                   11:05 a.m.

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