City joins call for feds to cushion tax increases
By Mark Squibb | Vol 7 No. 14 (July 18, 2019)
The mayors of Mount Pearl, Paradise, and St. Johns are tightening the pressure on local MPs and the federal government to either allow more time for them to comply with new federal wastewater treatment rules, or provide money to help pay for the work needed to make them compliant.
To meet the federal treatment quality guidelines by the year 2020 as required, an extension is needed to the Southside Road treatment plant in St. John’s, which also treats sewerage from Mount Pearl. The estimated cost of that project is some $255 million.
That could mean tax increases for residents.
The mayors of Mount Pearl, Paradise, and St. John’s say it’s not possible to meet federal standards for wastewater treatment within the timeframe allowed. From left to right are Mount Pearl Mayor Dave Aker, St. John’s Mayor Danny Breen, and Paradise Mayor Dan Bobbett. Mark Squibb photo
The municipalities estimate an increase of over 25 per cent in their water and wastewater expense budgets would be needed to cope with their share of the costs of borrowing money to build the extension, which in turn could necessitate an increased water tax for residents.
“Our water / wastewater (household fee) is $600 (per year),” said Mount Pearl Mayor Dave Aker. “We’re looking at a 25 percent increase if this is implemented right now, even without taking into account the uncertainty.”
That could mean a jump in the water tax for Mount Pearl residents to $750 per household per year. “We need to delay this to mitigate some of the financial risks,” Aker argued.
The three mayors held a press conference Thursday morning, July 11, at the Riverhead Wastewater Treatment Facility to address the issue.
The mayors say it’s just not possible to meet federal standards within the timeframe allowed.
Aker noted this is not a problem unique to the northeast Avalon.
“This is not a metro issue. You hear about it at FCM (Federation of Canadian Municipalities conferences ) and MNL (Municipalities Newfoundland and Labrador). The entire province is experiencing this,” he said. “A lot of smaller communities in Newfoundland and Labrador are having the same issue with fiscal sustainability, as well as trying to meet the environmental responsibilities. We talk around the table, and we’re all in the same boat, it is not unique to the metro area. And we’re not walking away from our environmental responsibilities.”
The federal government introduced the new wastewater regulations, designed to reduce the amount of harmful waste being pumped from treatment plants, in 2014. The Riverhead facility was deemed to be high risk, but Ottawa issued transitional authority to continue as is until Dec. 31, 2020.
That transitional authority will expire shortly, and the municipalities will face what they deem significant fines and penalties if they are not in compliance. Although exactly how large those fines may be, they are not totally sure.
“They’re significant. That [total fine amount] would certainly be a court issue,” said St. John’s Mayor Danny Breen.
The issue boils down to who will pay for what. Currently, the federal government will cover 44 percent of the costs, the provincial government 23 percent, leaving the remaining 33 percent on the shoulders of municipalities.
The municipalities maintain that Ottawa had indicated they would only have to shoulder 25 percent of the burden. And that number was based on an earlier cost estimate of $223 million.
“We’re facing this at a greater financial contribution then is normal for a cost-shared project. This is unacceptable,” said Paradise Mayor Dan Bobbett.
“The whole notion of the city and the municipalities taking that large of a share of a cost sharing project is troubling to us. It should be troubling to every municipality across the province,” added Breen.
The municipalities will also face increased annual operating costs.
All three mayors asked residents to lobby the federal government alongside them.
“As mayors, we cannot expect our residents to bear an increased financial burden. We want our residents to understand the complete picture, and we need them to join us in adding their voices to this issue. We’re asking all residents to express their concerns to their MP’s and their MHA’s,” said Bobbett. “Tell your provincial and federal representatives that you want them to work with your municipality and your region. Tell them they need to look at all information available before imposing this unfair burden.”
As is, the City of St. John’s will foot 83.5 percent of the bill, while Mount Pearl will foot about twelve per cent, and Paradise will pay the remaining four percent.
“It means that other projects, necessary infrastructure projects, that we would need to borrow money for, we won’t be able to do, because our borrowing capacity is tied up in funding that portion,” Breen said.s
