Federal relief funds coming to N.L., as St. John's faces cash crunch

A fraction of the $19 billion earmarked by Ottawa to assist the provinces and territories with restarting their economies amid COVID-19 is coming Newfoundland and Labrador's way, money municipalities like the City of St. John's say comes as a huge help during financially dire times.

Newfoundland and Labrador is set to receive$146 million as part of the federal Safe Restart Agreement, cash that is being funnelled into everything from COVID-19 testing topersonal protective equipment tochild-care spaces, and to municipalities in need.

"We're hopeful there's going to be money coming from that fund into the city, and that will take some of the pressure off, immediately," said St. John's Mayor Danny Breen.

The City of St. John's has collected $18 million less in taxes at this point in the year compared with the year before, he said, the result of deferring bills to help businesses and residents stay afloat as the pandemic wears on.

"It's a significant number, equal to about what we spend on snow clearing in a year," he told CBC Radio's St. John's Morning Show on Thursday.

Adding to that $18-million hole is a $7-million bill from the January snowstorm. Breen said federal disaster relief funding for that has been promised butnot yet materialized, cash needed for the city's books as municipalities are required to present balanced budgets by each year's end.

Municipalities around this province are by no means rich. We're living on bare bones.- Sheila Fitzgerald

While the city has deferred some capital projects, Breen said at the moment there's no need to cut services or hike taxes, as there are emergency reserve funds set aside for this exact purpose.

"We have reserves left. So 2020, we can get through. 2021 is going to be challenging. The unknown here is what's really the difficulty;we're not sure where all this is ending." he said.

Think regional

Municipalities Newfoundland and Labrador lobbied Ottawa for the Safe Restart cash in partnership with its parent organization, the Federationof Canadian Municipalities.

"We are very, very pleased," said Sheila Fitzgerald, the president of Municipalities NL and the mayor of Roddickton-Bide Arm.

"Together we've been advocating to say that we're on the brink of financial crisis. We can't run a deficit, we can't have loans, but the bills are far exceeding our income at this point."

• Federal government to provide provinces and territories with $19B for 'safe restart' of economy

Fitzgerald said she's canvassed communities across the province in recent months and says they are struggling to keep up with the demands of the pandemic.

"Municipalities around this province are by no means rich. We're living on bare bones," she told CBC Radio's Newfoundland Morning. "With COVID-19 it has been additional pressures."

With SafeRestart cash on the horizon, and the uncertainty of how long the pandemic will last omnipresent, Fitzgerald said it's time to discuss once again an idea that has been bandied about for years with little effect: regionalization.

"Collaboration, communication, co-ooperation is needed now more than ever," she said. "We need to talk about regionalization, we need to talk about how do we do business differently."

Cash coming 'very quickly'

Although the premier's office says the details of the transfer has not yet been finalized, Deputy Prime Minister Chrystia Freeland said the money is going to come "very, very quickly,"

Freeland has been overseeing the negotiations, and said talks are at the point where each premier or territorial leader has been asked to write to the prime minister outlining their spending plans.

"As soon as those letters are done, they will be made public, and then the cash will be on its way," she said.

"We didn't want to have too much red tape."

The funds arebeing distributed on a per capita basis, with one exception: provinces and territories could also apply for extra money destined for public transit, to offset pandemic losses.

Newfoundland and Labrador did not apply for that money, and the City of St. John's said any transit losses it experienced were minimal compared with larger cities.

"We wouldn't have a significantenough loss to make value of that," saidBreen.

Read morefrom CBC Newfoundland and Labrador