Federal Government Helping Communities

March 09, 2009

In 2004 the Government of Canada committed to flow gas tax revenue to local governments across Canada. In the first few years the Government of Canada committed one cent of the tax collected. Over five years the amount was ramped up to a maximum of five cents. The provinces signed agreements of understanding to flow this money to local governments for building water and sanitary, roads, transit and recreation infrastructure. The funding allotment was based on a per capita basis with a minimum amount allocated for small towns. This was a great help to local governments struggling to pay for needed infrastructure in their communities.

Our Government agreed with this revenue sharing funding and have extended this agreement until 2014. In British Columbia from 2007 to 2014, this will amount to $1.48B. This is important for a community. For example, in the City of Salmon Arm, the maximum allotment is around $750,000 – as a percentage of property tax is equal to a 6% tax increase. I am certain this would be the same for the City of Vernon.

At the same time, the Government of Canada also exempted local governments from the Goods and Services Tax (GST) -- a savings of hundreds of thousands of dollars to Vernon and Salmon Arm and proportionately to the smaller communities in the region.

Of all the taxes Canadians pay, only 8% is collected by local governments. With this meagre 8% the local government delivers fire protection, policing, water and sanitary, roads, recreation and many other services to its residents. Our government recognizes the great responsibility and costs to local governments and is committed to helping meet these challenges.

To further help the provinces and communities with infrastructure, we have developed the ‘Building Canada Fund’ wherein the province will receive $903.96M and communities $136M over the same period as the Fuel Tax Fund.

Yes, this is all your money not the Government of Canada’s, but I hope you can appreciate that our Government is committed to flow your money back to you by supporting your community and provincial priorities.

I am happy to say that funding announcements will take up much of my time over the next few years as communities and the province move forward on infrastructure projects to stimulate our local economy.

Colin Mayes, MP – Okanagan-Shuswap