Yukon municipalities call for new funding formula

Municipal governments ‘stretched thin’ by rising costs, limited revenue

Yukon municipalities say they’re “stretched thin” by inflation, rising insurance costs and a growing list of responsibilities and they want to the Yukon government to change the way it calculates funding.

“All of these impacts are hitting municipal governments which have a very small tax base, a very limited amount of tools in the toolbox with which they can generate revenue,” said Ted Laking, president of the Association of Yukon Communities (AYC).

AYC commissioned a study this summer to examine the comprehensive municipal grant, the program that provides most of the operating funds for the territory’s eight incorporated municipalities.

The grant is calculated using a complicated formula that considers population, the number of buildings in a community, inflation, the amount of infrastructure and other factors.

The study found that over the last decade the grant grew by 17.5 per cent. That’s less than inflation (20.8 per cent) and far less than territorial formula financing, the block grant the Yukon gets from Ottawa (45.7 per cent).

AYC’s report suggests tweaks to the grant formula would increase municipal revenue anywhere from 12 per cent in Mayo and Teslin to 50 per cent in Whitehorse.

But the Yukon government also recently boosted the comprehensive municipal grant by more than 10 per cent.

“This is going to go some way to addressing the shortage of money that [municipalities] have had in this time of inflation,” said community services minister Richard Mostyn in the Legislative Assembly last week. “I am under no illusion that it is going to go all the way.”

Mostyn said the grant formula underwent changes in 2012 and 2017 and he said his department is working with AYC to look into further tweaks.

Asked repeatedly during debate by NDP Leader Kate White, Mostyn to refused to offer any details on how negotiations were going.

Laking said it’s news to him that AYC and the government are in talks over the grant..

“As I understand it, based upon most recent information that I’ve received, is that negotiations have not begun and that, as I understand it, the government of Yukon does not yet have a mandate for negotiations,” he said.

Part of the problem municipalities face is that they are, constitutionally, creatures of the provinces and territories. That means they exist under legislation created by senior governments and have limited ways to raise their own revenue.

Laking said the Federation of Canadian Municipalities is pushing the federal government for changes too, because municipalities face similar challenges across the country.

“It’s important beyond just the borders of the Yukon,” Laking said. “This is a discussion that I think all Canadians should be really interested in and seeing a resolution that works for all orders of government.”