News Release Archive
NEWS RELEASE (CNS614) -->> FINANCE--MUNICIPALITIES OFFERED NEGOTIATION PERIOD FINANCE--MUNICIPALITIES OFFERED NEGOTIATION PERIOD ----------------------------------------------------------------- The provincial government wants to sit down with Nova Scotia's municipalities and work out an arrangement to offset any adverse impact of sales tax reform on the municipalities. Finance Minister Bill Gillis said the province and the Union of Nova Scotia Municipalities spent a great deal of time over the summer working out the impact of a harmonized sales tax on the municipalities. "We should now spend the next two months working out ways to offset any cost increase the municipalities might bear," Dr. Gillis said. Over the summer the province and the municipalities agreed that the initial impact of tax harmonization on municipal units is about $10.8 million. "However," Dr. Gillis said, "this number did not take into account any of the savings the municipalities might be expected to receive from lower business costs." The municipalities agreed that costs would go down in competitive bidding situations, especially construction costs. The two levels of government did not agree on the amount of expected savings, with the province suggesting the net impact of harmonization would be in the range of $6 million, while the municipalities feel the amount is closer to $8 million. The Finance Minister said the problem will not be solved within the harmonized sales tax system, but the government can work with municipalities to find other ways to either reduce costs or increase revenues. "Now that work has been done on discovering the extent of the problem, we should move quickly to find solutions . . . setting a 60-day deadline (for the talks) will allow both parties to plan properly in time for their budgets next spring," he said. -30- Contact: Bruce Cameron 902-424-8787 trp Oct. 08, 1996 - 3:20 p.m.