News Release

Kelly Urges Agreement to be Signed on Gas Tax Plan

(Friday, April 29/05)-- Mayor Peter Kelly said today he is concerned that if there is a change of government in Ottawa, the share of the federal Gas Tax promised to Canadian municipalities may be directed to the Provinces, and they, in turn, would decide how and where the money is distributed.

Mayor Kelly said the current proposal put forward by the Martin government would see the new revenues passed along to Canadian municipalities, to be used as they saw fit for transportation and environmental infrastructure projects.

The Mayor urged the federal and Nova Scotia governments to sign a Gas Tax agreement as soon as possible, in light of recent suggestions the Conservative Party of Canada may try to bring down the Martin government in Parliament.

Mayor Kelly said Leader Stephen Harper stated Tuesday in Wallaceburg, Ontario, that if his Conservatives formed the next government, it would honour any signed agreements reached by a previous government on the Gas Tax.

However, Mr. Harper further stated that although a Conservative government would reduce federal Gas Taxes, conditional on agreements with the provinces and territories, that they would use the resulting tax room to fund infrastructure.

“The operative word here is `they`. The Martin plan would see the Gas Tax monies going to Canadian municipalities, who would decide how and where the funds would be spent, based on their priorities,” Mayor Kelly said. “Under the Harper plan, the provinces and territories would decide where the new money would be spent. Based on our past experiences, that may not be a good thing for HRM.”

The position of the Federation of Canadian Municipalities, and the Big City Mayors’ Caucus, is that any new revenues promised from the federal share of the Gas Tax should be passed along to Canadian municipalities, who would decide how and where the funds would be spent, depending on program criteria.

The Union of Nova Scotia Municipalities (UNSM) and the Province of Nova Scotia have already agreed to a formula and this should be formalized with the federal government to ensure these funds flow in a predictable manner.

Under the present proposal put forward by the Martin government, HRM would receive approximately $8 million in new revenues from the promised federal share of the Gas Tax in the first year, ramping up to approximately $25 million a year in the fifth year of the program.

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Mayor Peter Kelly
(902) 490-401