Last Friday, Honourable Gail A. Shea, Minister of Community and Cultural Affairs announced that the province will allocate additional funds to the equalization component of the Municipal Support Grant Program. During her annual address to the Federation of Prince Edward Island Municipalities today, Minister Shea spoke about the program.
"This announcement represents a significant step forward in addressing the needs of municipalities who are not at present receiving their pro-rate share of the equalization part of the Municipal Support Grant Program," says Minister Shea.
The Municipal Support Grant Program was established in 1986. The program was intended to provide a fair and affordable method of assisting municipalities that do not have a sufficient tax base to support local services such as street maintenance, policing services and recreation services. In the early 1990s, the rate of municipal grants was reduced across the board and, since 1995, the equalization component of municipal grants has remained the same. As a result, some municipalities are not receiving their pro-rate share of the equalization funds.
"This change in the formula will result in increases in the amount of funding awarded to many municipalities," says Minister Shea. "I am sure that these extra dollars will help these municipalities serve their residents."
The province has allocated an additional $75,000 to the Municipal Support Grant Program. The equalization component formula considers various factors including the difference between a municipality's per capital assessment and the provincial average per capital assessment. The formula also considers the municipality's ability to pay for services.
The enhanced equalization component of the Municipal Support Grant Program comes into effect immediately and those municipalities affected will see an increase in their grant funds issued in May.