Shakeup in cost-sharing formula for municipalities puts priority on water infrastructure, co-operation

The Newfoundland and Labrador government has signalled that it wants municipalities to put a greater emphasis on projects that improve drinking water quality, wastewater management and regional co-operation.

Moreover, it's making changes to the way it cost-shares these projects in order to make sure all of that happens.

Municipal Affairs Minister Eddie Joyce released details of a three-year, $100-million municipal infrastructure program on Monday, and it includes the first shakeup in the funding formula in nearly a decade.

In simple terms, the funding formula for what the province describes as priority projects will remain unchanged, but municipalities can expect to pay a greater share for infrastructure such as firefighting vehicles, recreation and municipal facilities, and municipal roads.

"The program supports government's priorities of strengthening municipal infrastructure, providing better access to higher quality water and wastewater systems and enhancing disaster mitigation," Joyce said.

"In addition, we will provide communities with available funding information in advance so that capital funding is more predictable, allowing communities to better plan for longer-term funding options."

The new formula will save the province $10 million over the next three years, and Joyce said that money will be reinvested into municipal infrastructure.

Since 2008, towns with populations less than 3,000 paid 10 per cent of a project's cost, with the province paying 90 per cent.

The formula was 20/80 for towns between 3,000 and 7,000, and 30/70 for towns with a population greater than 7,000. 

Typically, the City of St. John's has cost-shared on a 50/50 basis.

Province to pay smaller share for road work, municipal buildings

Those ratios will remain unchanged for projects that support clean drinking water, managing wastewater, and improvements that reduce the risk of disasters.

But the municipal share will increase by 10 per cent for emergency equipment such as fire trucks, increase to 40 per cent for recreation projects and municipal building, and 50 per cent for roads and other funding requests.

The new formula also includes an incentive for neighbouring municipalities to work together. Joyce said the government will reduce the municipal share by 10 per cent for regional projects, to a minimum of 10 per cent.

Joyce said the province will also spend $35 million over the next two years in order to leverage the maximum amount of federal money available under the Building Canada Fund. This will result in a $60-million total expenditure from all levels of government, said Joyce.

This is being welcomed by Municipalities Newfoundland and Labrador.

"We're glad to see the province make good on its commitment to leveraging federal infrastructure funding," said MNL president Karen Oldford.

"We were concerned that Newfoundland and Labrador would not receive our share of the available federal funding because we did not have the required leveraging investment. This move ensures we will receive all of the significant federal funding available to the sector."

Oldford also commended changes that will allow municipalities to plan infrastructure projects more effectively.

"Municipalities Newfoundland and Labrador is pleased that the continued multi-year capital works plan and the new step of pre-announcing intake dates for three years on other programs makes planning that much easier for municipalities," Oldford said.

Power generators for places that serve the community as warming centres during emergencies will now be included in the cost-sharing program.