Yukon municipalities are breathing a collective sigh of relief after having their territorial grant funding increased for the first time in 16 years.
The comprehensive municipal grant has stayed level since it was issued by the Yukon government in 1992, despite continually rising costs of fuel, wages and infrastructure maintenance.
A 32 per cent increase — raising the current $12.5 million grant by $4.5 million over four years starting April 1, 2008 — was announced by the territorial government and the Association of Yukon Communities this week.
“We can move forward with projects now rather than just maintaining all the time,” said Mayo Mayor Scott Bolton.
“It’ll make life a little easier.”
Under the new funding formula, which employs the Consumer Price Index used to measure inflation as a guide, Mayo will receive an additional $748,000 over four years.
The money won’t last long, said Bolton.
“That $750,000 will go faster than you can spend your $10 at Tim Hortons,” he said.
“But realistically, 32 per cent is a reasonable increase these days.”
Mayo, like many other municipalities, has barely been able to keep up with infrastructure maintenance while lagging behind in starting new projects.
“Our roads are getting banged up pretty hard and we’ll probably put money into water and sewer, which is a never-ending thing,” said Bolton.
“We have a new recycling centre that’s just in the starting blocks, but there’s no money to bring it out so that’ll be something we’ll look at seriously.”
Faro will receive another $826,000 over four years. Housing only 20 per cent of the population the town was originally built for, the bill for infrastructure maintenance is massive, said Mayor Michelle Vainio.
“Our infrastructure is aging just like in other communities,” she said. “But imagine having only 4,000 people in Whitehorse for nine years and still maintaining all the infrastructure for the population as it sits now.”
“The money from Ottawa has been increasing for years and we felt it should be shared down the line,” said Vainio.
Taking into account a two per cent average annual rise in inflation for each of the 16 years the grant has been handed out, the new funding increase brings up the grant to the level it should have always been at, said Vainio.
For years, municipalities operated on a 50-50 split in the budget between capital and operations and management. But because operations and management eats up more money, communities are left with less funds for infrastructure projects, said Bolton.
Mayo has been using only about 30 per cent of the village’s budget for capital, which means it can simply maintain existing infrastructure and not undertake new projects.
“You can only operate like that for so long before you hit a wall,” said Bolton. “If you only have 30 per cent going towards the capital budget, it’s hard to replace existing infrastructure and you don’t really move forward.
“This isn’t going to go to those big wonderful projects. But everybody needs to flush the toilet, right?”
The $740,000 Carmacks is to receive will go into reserves, but the sewage plant and roads need work, as does a toddler park slated for construction, said Mayor Elaine Wyatt.
“There’s never enough money to run all the programs you want and any extra you get you can put a little extra in the reserves,” she said.
Government grants and development funds often require matching money from communities for a project to receive approval and extra money could go towards building up the municipality’s reserves.
Yukon’ community development fund is a partnership that requires money from the municipalities to get matching funds from the territory.
“If you don’t have any money reserves, you can’t even make proposals for projects,” said Wyatt.
“Communities don’t have larges tax bases. We have to rely on these community grants.”
Non-incorporated communties will also receive a funding increase.