Monday, January 11, 2016


Is NIMBY guiding the budget process at St. John's Council? 

If Newfoundland and Labrador is Canada's Greece, than St. John's is this province's Athens.

The reality is pretty simple - the city needs more revenue to continue the current level of services it offers. That revenue can only come from higher taxation, grants from other levels of government or increases in permit costs.

The other option is to innovate, look inwards and reduce some services, cut corners, city grants and other operational costs.

Council really does not have a lot of options. Canons to the right, Canons to the left! 

The one criticism that appears to ring true is the lack of consultation with stakeholders leading up to this draconian budget. 

Why were the captains of industry, the leaders of the arts community and citizens groups not brought together prior to the tabling of the budget for consultations? Why has the city's operational costs not been more austere?

Last week, under a pressure from a strong lobby they backtracked on a shocking scrooge like cut to the city's annual art grants. The $100,000 cut from the previous $200,000 allocation was restored - sort of.  They borrowed the money from the reserve. 

They also experienced a change of heart on forcing homeowners with busted and frozen sewer or water lines on their property to pay the full cost of those repairs, instead of the old-fee of between $50 - $500.

As well, the red faced council had to begrudgingly back away from an illegal move to force tax payers not on city services,  to pay the same truck as those receiving full services.  It would seem that the council was not advised by staff that such a move is against a particular piece of legislation - the City of St. John's Act!

After watching the success of the arts lobby, business has staffed the ramparts and are beating the war drums. The Board of Trade is leading the vanguard against increases in business taxes and fees for services like water. They say the average commercial tax has increased by over 21%! They are also livid that council has reneged on a promise to remove the vacancy allowance which they say will stymy growth and investment. The organization held an emergency meeting last Thursday to discuss the potential impact of the budget on member's business.

The concern of downtown businesses was aptly addressed in an opinion piece penned by well known entertainment guru Bob Hallett. The pull no punches letter to the editor laid out a litany of sins committed by the city that have crucified business operators in the downtown.  The latest of which is "a massive and destructive" tax increase in the midst of a crushing recession. 

Than of course there is the average householder who will be forced to shell out on average an extra 12% for municipal taxes and fees with a reduction in services. This is on top of the revelation that each man, women and child in the province could be on the hook for a $40 K share of the provincial debt - which is more than the per capita debt in Greece! No one level of government should forget there is only one taxpayer!

Meanwhile, the cost of operating the city continues to grow with expenditures in this budget up by $12.7 million and significant future increases projected for 2017 and 2018! 

Austerity measures have to go back on the table, the city and the province must accept the reality that this recession is the result of a global downturn. There is no magical domestic solution.

We must do everything we can to stay afloat which means looking inward for efficiencies, innovations, alternative service delivery and deferring non-essential investments until we can afford them - not taking the route of taxing our economic engines out of existence.

Arguing about how we got here and pointing fingers is not nearly as important as dealing with the economic crisis we face today without deferring, any more than necessary, to future generations. 

Lets all work together to keep the ship afloat because there are no lifeboats! 

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