Provincial funding hike to help P.E.I. municipalities, but amalgamation may be the long-term fix

Thinh Nguyen · CBC News

· Posted: Mar 30, 2025 5:00 AM EDT | Last Updated: 11 minutes ago

The Federation of P.E.I. Municipalities says the provincial government's committedness to expanding backing for municipalities is simply a affirmative step, but a semipermanent solution is needed — 1 that could impact revisiting municipal amalgamation.

In a code delivered Tuesday successful the P.E.I. legislature, the state committed to an interim statement to summation backing to municipalities, pending the existent reappraisal of the Municipal Government Act.

Satya Sen, interim enforcement manager of the Federation of P.E.I. Municipalities, said helium welcomes the two-year backing framework, noting that municipalities had seen nary increases for the past 3 years.

"Municipalities person been doing a batch much for a batch less. The resources they person are not capable to supply services to Islanders and their municipal residents, truthful accrued backing is perfectly a invited measurement from the provincial government," Sen told CBC's Island Morning.

Rising costs

Stratford Mayor Steve Ogden besides said the backing boost is invited quality for his municipality of astir 12,500 residents, 1 of the fastest-growing municipalities successful the province.

Ogden said indispensable services, specified arsenic policing and occurrence protection, are becoming progressively costly for the town. Policing costs unsocial present transcend $1.3 cardinal and proceed to rise.

In its 2025-26 budget, Stratford is raising municipal residential taxes by 2 cents. The hike is not unexpected; the municipality is successful the mediate twelvemonth of a three-year program to rise municipal residential taxes by 2 cents per twelvemonth that was approved successful past year's budget. Without provincial funding, taxation increases would beryllium indispensable to support indispensable services.

"This is precise welcome, to person this backing available, and it is interim, but we look guardant to being capable to conscionable the costs of occurrence protection, for policing," Ogden said.

In the throne speech, the Rob Lantz authorities besides promised to make a municipal infrastructure bank, which volition connection low-interest loans to physique and refurbish assemblage infrastructure.

Ogden said helium is waiting for much details, but hopes that tin beryllium different backing enactment for municipalities to enactment superior projects.

He hopes it tin assistance municipalities screen their accepted one-third publication to task costs, noting that towns often conflict to money superior projects since the Municipal Government Act won't fto them tally deficits.

Another look astatine amalgamation?

While the two-year interim backing statement provides short-term relief, Sen said municipalities request a much imperishable fiscal solution, and that could mean revisiting the thought of amalgamation.

Although the taxable has been arguable connected P.E.I., Sen said the state has much than 57 municipalities serving a colonisation of conscionable 180,000 people. In comparison, Nova Scotia has 49 municipalities that are location to a colonisation of astir 1 million.

"We can't person this fragmented governance strategy wherever you have, like, tiny municipalities who are doing immoderate they could with the small resources they have, but they truly request to, you know, grow and supply services similar municipalities," helium said. 

"For example, adjacent the towns similar Kensington are providing services to an country which goes acold beyond their municipal boundaries."

Sen pointed to different example: North Rustico, which has faced challenges trying to wage disconnected indebtedness connected its rink, which was built to assistance big the Canada Games.

"The rink is being utilized by a overmuch larger colonisation than the colonisation of the Town of North Rustico. Now, who is paying for that?

"Somebody has to wage for that, and municipal taxpayers are successful immoderate mode subsidizing the outgo of the services for a overmuch larger population."

Sen hopes the Municipal Government Act reappraisal volition supply municipalities with an accidental to code these challenges.

He said the reappraisal should instrumentality into relationship the request to grow boundaries to marque municipalities much viable, saying the existent boundaries are outdated and based connected schoolhouse districts from the 1800s.