Municipalities still fighting for HST deal

Municipalities on P.E.I. say they still haven't come to an agreement with the province over how they'll be compensated for the HST they pay, but Finance Minister Wes Sheridan says he's done negotiating.

Island municipalities asked the province for the same thing municipalities in other provinces receive under the HST, rebates worth about three quarters of the tax they pay. Instead, the P.E.I. government is offering $1.8 million in infrastructure money to be shared by all municipalities.

The Federation of P.E.I. Municipalities says it still hasn't agreed to that deal, but Sheridan isn't concerned.

"The municipalities can agree to it or not agree to it," he said.

"What we're doing is giving them a fund to go into to do infrastructure programs."

It's not clear that the infrastructure money being offered is in fact a bonus compared to what might otherwise have been offered. Infrastructure spending in the 2013-14 budget actually dropped by more than $5 million compared to the previous year.

Bruce MacDougall, president of the Federation of P.E.I. Municipalities, declined to give a taped interview with CBC News, as did City of Charlottetown manager Roy Main.

The City of Charlottetown does say, however, even with its allotment of $1,010,000 of infrastructure money, it will come up about $400,000 short under the HST. Main said departments like Parks and Recreation received the same funding as last year in the city's budget, with the expectation the money won't go as far once the extra tax is figured in.

Main says one of the problems is the province hasn't included utilities such as electricity in its estimation of how much municipalities will pay under the HST.