Recent History – 1998
By Daily News Staff and CP, Dec. 21, 1998
British Columbia municipalities were hit with a $40-million cut to their budgets Friday, a day after the province announced its deficit would be almost twice what it forecast earlier.
Municipal Affairs Minister Jenny Kwan announced a massive restructuring of B.C.’s system of paying municipal grants to communities. Starting next April, municipalities can expect to see little of the estimated $61 million they received from the province in unconditional grants, she said.
Instead, towns and cities will receive special project funding, as well as a share of $13.2 million in revenues from traffic fines and money from a $50-million fund for local water and sewer projects, Kwan said. In the past, municipalities did not have access to money from fines for speeding and other traffic offences.
Dawson Creek Mayor Blair Lekstrom calculated that the announcement will translate into a $180,000 cut to the city budget, of which $50,000 will be made up in revenue from traffic fines. The amount adds up to about a 2.5 per cent cut in revenue.
“I will do everything in my power to make sure that this does not mean an increase in taxes,” he said.
He added that the city will try to take advantage of infrastructure grants the province will be offering for water and sewer projects.
Lekstrom said he wasn’t surprised by the announcement considering the deficit the provincial government is running. “At the end of the day, I think I’m probably not alone when I say that deficit financing by whatever government [is] in power has to stop,” he said.
He said he thought something was up when Premier Glen Clark refrained from talking about municipal grants when addressing the Union of British Columbia Municipalities (UBCM) earlier this year.
“I thought if the grants would have been left alone, he would have taken that opportunity to make that announcement,” he said. “When he never did, I thought they may be in some jeopardy.”
The announcement has enraged the UBCM.
“It’s kind of like getting a Christmas stocking with one cookie and six lumps of coal in it”, said Steve Thorlakson, vice-president of the association and mayor of Fort St. John.
“Clearly, this is a major reduction, which any way you slice it is another off-loading on to local government.” Thorlakson said municipalities thought they had a deal with the government that there would be no further cuts until a study on local government financing was completed.
Kwan said grants to small communities with less than 5,000 residents, such as Chetwynd, Tumbler Ridge, Hudson’s Hope, Taylor and Pouce Coupe, will be maintained at 1998 levels.
No community will lose more than 2.5 per cent of revenues, she said.