CBRM council wrestling with ways to spend $15M windfall

Cape Breton regional councillors are considering the many ways to spend a $15 million windfall after the Nova Scotia government doubled the capacity grant to municipalities.

Staff have suggested at least seven ways to carve up the money, but one councillor's suggestion of a tax break for residents did not make the cut.

Coun. Darren Bruckschwaiger said residents have paid high tax rates and the municipality has been shortchanged hundreds of millions of dollars in provincial funding.

"I've certainly been one to speak to staff about tax decreases and how we can help," he said. "This has probably been a 20-year fight, equalization.

"That's why ... we have to try to give something back to the ratepayers."

However, staff suggested council use the money in such a way that it would not result in permanently increased operating costs or reduced revenues.

Coun. Eldon MacDonald, a longtime proponent of increased equalization funding, said a tax break is not in the cards  yet.

"As much as we would all love to be able to decrease our tax rate, this is a one-time top-up and we don't know what is going to happen after this," he said.

"If you reduce your tax rate at this point, it leaves us less money for less services. We struggle now to provide services the way it should be provided."

He suggested council consider economic development investments that would allow CBRM to reduce tax rates "some day."

The municipal capacity grant used to be called the equalization grant. It was initially established to provide municipalities with some of the federal equalization funding that came to the province.

CBRM fought all the way to the Supreme Court of Canada to try to get a bigger share of the equalization money, but the court refused to hear the case.

Nova Scotia has frozen the capacity grant to municipalities for years, but the new Progressive Conservative government honoured an election promise and doubled it this year.

The Minister of Municipal Affairs has also been tasked with working out a new funding formula with the municipalities.

Mayor Amanda McDougall said a long-term solution has to come first — before council can consider reducing taxes.

"We don't know what we're going to get next year for capacity grants," she said. "We have to be really wise how we use it this year."

Staff are recommending council:

• Set aside $3 million for a new library;
• Put $1.25 million towards clean air in city hall;
• Spend $1.4 million on paving rural roads;
• Fund expansion of the Centre 200 arena;
• Pay down some debt;
• Improve functionality of the website;
• Fund outdoor recreation.

Jennifer Campbell, the municipality's chief financial officer, said paying down debt could save CBRM up to $900,000 a year in interest. Those savings could be put towards other priorities.

Councillors Steve Parsons and Cyril MacDonald said paving some rural roads would provide benefits in most districts.

Deputy Mayor Earlene MacMullin said the pandemic has taken away community get-togethers and she would like to see the money spent on outdoor recreation facilities and activities.

"Regardless of how we do it, I think our residents have had a few tough years and it would be nice just to spread the wealth in that kind of way," she said.

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