CBRM still short money to run its services after province examines municipal budget

The Cape Breton Regional Municipality has now confirmed it can't use new funds from the provincial government to wipe out a shortfall in its budget.

At issue is whether money from the province can be used for operating costs to run the municipality or only projects that build infrastructure like roads and sewers called capital costs.

In a complex back and forth between both levels of government this week, Municipal Affairs Minister John Lohr and deputy minister Paul LaFleche said $3 million from the new Sustainable Services Growth Fund could be used for CBRM's operating expenses.

They said the province was willing to examine CBRM's budget and help it find ways to use the money, but CBRM officials said that wouldn't fix the problem.

On Friday, chief administrative officer Marie Walsh said CBRM sent its budget to the province and has heard back and CBRM was right all along.

"The terms and conditions of that fund are for capital items," she said. 

CBRM council has approved its capital budget for the coming year. It includes $68.8 million in spending on projects such as streets, sewers and transit. 

Deficit budget talks suspended

However, council suspended talks on its draft $173.5-million operating budget — which covers the cost of running the municipality, including wages, utilities and supplies — because it was short $2.4 million.

That deficit already takes into account cuts on hiring and raising user fees for transit and the landfill site.

The province's new fund was designed specifically for housing, seniors and long-term care, accessibility and active transportation. That's why the new grant cannot be used to pay for items like employee salaries.

The municipality had been counting on an increase in operating funds from the province after receiving an extra $15 million last year for that purpose.

It cost the province $31.9 million to do that for all municipalities that qualified last year and Walsh said the province is spending that same amount this year, but instead of allowing it to be used for operating, the province has restricted it to certain capital projects which result in a tangible asset.

"The anticipation was that they were going to do it again this year, which was a commitment by the premier in his [election] campaign, but instead they used it for infrastructure," she said.

Province responds

In an email Friday, Municipal Affairs said it has reviewed CBRM's budget and informed the municipality that it can use the $3 million in its capital budget and it would leave it up to the municipality to decide if it can use any of that money in its operating budget.

Walsh said CBRM council is holding a workshop on Monday to discuss the latest developments, but no new public meetings on the budget have been scheduled yet.

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