Mayor Ted Clugston says he'll discuss PST with municipalities group if it comes up but the idea isn't on his radar.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
Medicine Hat’s mayor is giving the cold shoulder to a proposal that a one per cent provincial sales tax be created to provide stable cash source to cities for infrastructure spending as the provincial government grapples with deficit spending.
City of Lethbridge council voted Monday to get the issue on the fall agenda of the Alberta Urban Municipalities Association convention, which determines policy priorities for the city’s lobby group.
Mayor Ted Clugston told reporters in Medicine Hat on Tuesday, however, that the topic hasn’t come before his council and likely wouldn’t be discussed locally until the idea gains wider support.
“I haven’t discussed it with the Mayor of Lethbridge (Chris Spearman) – it’s brand new issue,” said Clugston.
“If it makes it to the AUMA and gathers legs, then, yes, we would discuss it.”
The Lethbridge motion states that as the province faces a $20-billion deficit this year while rewriting future spending priorities – including a 10 per cent cut to local construction grants – cities need funding certainty.
Locally, Medicine Hat’s share will drop by $1 million per year by 2022.
The lack of a provincial sales tax has traditionally been a point of pride, and politicians have been leery to suggest one, but economists have argued it as a way to reduce the volatility of provincial revenue stream.
Recently a poll conducted for the CBC found 57 per cent of Albertans strongly or somewhat disagree with the general idea of sales tax, but that’s down from 73 per cent two years ago.
Lethbridge’s motion also states up to $8 billion could be raised with the 1 per cent set aside for municipal governments, though most economists agree that each percentage point would result in $500 million in revenue.
Last fall the provincial budget laid out an intention to replace the current funding program for municipal infrastructure grants, known as the Municipal Sustainability Initiative (MSI), while at the same time cancelling a City Charters system for major cities that was worked out during the previous government’s term
MSI will be reduced by nine per cent over the final three years of the program, which is set to end in 2021-22.
The fund would provide $897 million that year for cities to allocate on a per-capita basis for a wide range of construction projects (Medicine Hat’s current share is about $11 million).
In 2023, it would be replaced with the $806-million Local Government Fiscal Framework, which, according to the provincial budget documents, could include new provincial requirements and oversight of projects, but final details are still being developed.
