New funding system for municipalities coming to P.E.I.

P.E.I. is changing the way it funds municipalities with the aim of providing more predictable funding, the provincial government announced Wednesday.

In a written release, Finance Minister Allen Roach said the changes include:

• Tax credits instead of grants.
• An updated equalization program.
• Extending the planning credit to municipalities with an official plan.
• Municipalities receiving a grant of 10 per cent on all eligible capital expenditures.
• No municipality receiving less funding than it does now.

The province spends $23.6 million on funding to municipalities, which will increase by $2 million next year and $1 million in each of the next three years after. By 2022-23, the province expects to spend $30 million on municipalities.

The agreement will be reviewed in five years.

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