By Kalinowski, Tim on June 20, 2020.
City council has passed two motions to help raise funds for municipal infrastructure if adopted by the province.
The first motion advocated for a one per cent PST to be imposed in Alberta which would be designated specifically for municipal infrastructure. The second motion would allow municipalities to offer their own bonds to help raise money for local infrastructure projects.
Both motions were sponsored by Deputy Mayor Jeffrey Coffman and both received unanimous support during Monday’s regular meeting. The motions are non-binding on the province but will be forwarded to the Alberta Urban Municipalities Association annual meeting for debate. If the AUMA members vote to adopt the policies, they would be forwarded on to the Kenney government with a strong endorsement from all the cities in Alberta.
Coffman stated he realized the idea of a PST has been historically unpopular, but given Alberta’s current difficult economic state and the province’s ongoing cuts to MSI funding he felt it was a necessary conversation to have.
“It is a conversation we at least need to be beginning in the province,” he stated. “The tack or approach we seem to be taking is don’t talk about it. Let’s actually get it out in the open and have a conversation about resource allocation. This would free up funds from the provincial government going to municipalities. It creates a new source of funding. And it is funds that are generated in the community and are actually returned to the community.”
Coffman said revenue generated from the new sales tax would allow the province to reallocate its MSI funds for other needs because the tax would provide all the infrastructure funding Alberta communities need.
“If we use the formula we are currently using for the MSI funding, the City of Lethbridge could benefit anywhere between $60 million and up to, one of the figures presented today, up to $178 million (from a one per cent PST),” he said. “City council would be in control with what we do with that money; so it provides the opportunity for us to be making local decisions. It’s about having a different revenue source for council.”
Premier Kenney said last week he would not consider imposing a PST in Alberta without holding a referendum on the issue first.
In Coffman’s other motion pertaining to municipal bonds, he advocated for the Alberta government to support the creation of such a bond and for the Canada Revenue Agency to allow such a bond to be tax free for those who invested in it.
“Bonds aren’t considered a good vehicle because interest rates are low, but what is missing is the tax component,” he explained. “If it was tax exempt that makes it a better investment tool, and actually gets more people to invest in municipal infrastructure in Alberta.”
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