Province Reaches New Financial Agreement with Municipalities

The province and the Union of Nova Scotia Municipalities (UNSM) have reached an agreement that will result in more dollars and predictable long-term funding for municipalities.

The agreement builds upon a memorandum of understanding between the two levels of government signed in 2005. The revised memorandum outlines a seven-year financial and accountability commitment beginning in April 2008.

"This agreement will mean $85 million over the coming years for municipalities to invest in infrastructure and services," said Premier Rodney MacDonald today, Nov. 7. "It is another important step in building strong vibrant communities across the province."

Key elements of the memorandum are:

• a freeze in mandatory municipal contributions to corrections services at the 2007-08 level ($17.4 million) with a five-year phase out beginning in 2010-11.
• a phase out of municipal contributions to housing of $6.5 million (based on 2005-06 figures) over two years, beginning in 2010-11.

The cumulative cost of these two measures over the life of the agreement is about $85 million.

"The UNSM is solidly behind all aspects of this memorandum," said UNSM president Russell Walker. "The financial package is quite positive and indeed good news for all of our members."

The memorandum also caps education funding at 2007-08 levels, with annual increases tied to the Nova Scotia consumer price index (CPI).

"The premier's announcement today is very good news for the residents of HRM," says Mayor Peter Kelly. "While the agreement will eventually translate into about $10 million in annual savings from housing and corrections for the region, the greatest benefit is that we'll finally be able to contain the costs of education. This predictability will certainly help as we set our annual budgets."

The memorandum also calls for the UNSM, municipalities and the province to work together to enhance municipal accountability of public funds by establishing a municipal auditor general or similar office. This measure will help to ensure public dollars continue to be spent wisely.

As a result of the memorandum, and other recent provincial measures, Nova Scotia municipalities have one of the best financial arrangements when compared with counterparts in other provinces. For instance, Nova Scotia municipalities do not contribute to social services as in some jurisdictions. Also, property-taxpayer contributions to education remain among the lowest in the country.

The memorandum will be formally signed on Thursday, Nov. 8, at the UNSM annual conference.