Department of Municipal and Provincial Affairs

Municipal Capital Works
BACKGROUNDER

• For the last two years, the Municipal Capital Works Program was interwoven with the Canada/Newfoundland Municipal Infrastructure Agreement.
• Government will continue to fund the Infrastructure Program under which approximately $40 million will be spent this year.
• In addition, the government will provide loan guarantees under the Newfoundland Municipal Financing Corporation to any municipality which can fund 100% of its obligation for water and sewer projects.
• The $25 million in additional loan guarantees for Municipal Capital Works will be financed either directly through chartered banks or through Government's financing agency, NMFC.
• In previous years, road work was financed on a 60%\40% provincial/municipal basis and the municipal contribution for water and sewer was based on the cost per household on a percentage of fixed revenue. In order to reduce its financing costs, Government has decided to suspend these cost-sharing formulas in favour of having the municipalities bear more of the cost if their finances can support this obligation.
• The Department of Municipal and Provincial Affairs hopes to be in a position to announce approval of tenders on most of this work in the next 2-3 weeks.
• Government will make every effort to ensure that funds are distributed fairly and equitably throughout the Province, taking into consideration the ability of the municipality to contribute toward the cost of funding the various capital works projects.
• The infusion of capital works funding will generate considerable employment opportunities in the construction and trades industry and there is a number of indirect or spin-off jobs in the supply industry, small stores, motels, in heavy equipment operations and garages. It is a most significant undertaking in view of the difficult financial conditions prevailing in the Province at this time.