By Katie Ryan
“For me, I think it’s B+ given everything they have had to deal with,” said Mayor Jeff Mulligan, when asked to grade the federal government’s budget.
Delivered on March 4 after two months of prorogation, the budget offered little in the way of new spending, instead it relies on a growing economy and firm bottom line to eliminate the deficit by 2014-15.
“When you walk a fine line of minority government in the back side of a recession, with restraint being the word of the day – that’s a difficult spot to produce a budget in and take any kind of a hard line,” Mulligan said referring to Harper’s government and financial vision. “To come out with a budget that shows that there is an opportunity for some median term deficit reduction, there is a way to get us back to pay this debt off. I think you have to give them some marks as a federal government, in that circumstance.”
Mulligan said the federal government “doesn’t affect to any great degree” at the municipal level. The city receives the lion share of its funding from Alberta’s Municipal Sustainability Initiative funding ($3.5 million), Saskatchewan’s Municipal Operating Grants ($1.2 million) and taxation on property.
“Much like our friends in Saskatoon and Regina, we wish we were getting the increased amounts on those programs, but at least we are not getting less,” said Mulligan.
The federal government is coming into the second year of its Canada Economic Action Plan and will roll out the remaining $19 billion in promised stimulus funding by 2011. Whether or not Lloydminster will see some of the cash remains to be seen.
“We haven’t got confirmation but certainly we are going to put our nose right in that pot and see if we can’t qualify for that, that’s project specific and certainly make it known that we have plenty of worthwhile projects in Lloydminster that some of that stimulus money could go towards,” said Mulligan.
Mulligan said his interest piqued upon learning of the potential red tape reduction commission the Feds talked of establishing.
“I think that is always good, particularly for a city who has to deal with both provinces. The less red tape that we can deal with at any level of government, the better off we are going to be because we already deal with twice as much as anybody else,” he said.
With the federal government and several provinces, including Alberta, posting substantial and in some case “historic” deficits, Mulligan doesn’t foresee a similar financial fate for Lloydminster.
“We don’t plan for big deficits like those governments can. Our income is really tied directly to the taxation on property and the grants we get, so we don’t see those same pressures they would see at that level,” he said. “I guess the flip side is true for us. There are a number of projects we would do if we had the money.”
Mulligan doesn’t rule out borrowing funds in 2010-11, if projects are worthwhile and needed, adding that it’s an encouraging decision with a low interest rate.
“Although,” he added, “I see in the budget they are predicting what I would consider to be at these times rate increases in the Bank of Canada rate, in the short term bond rates and in the mid to long term bond rates, they are showing some increases over the next year into 2011.
“But it is a good time to borrow on some fronts, because if you are getting work done, the work is costing less right now and the interest rate is lower. We wouldn’t run a deficit as much as we might be inclined to look at projects that would make sense to borrow to fund.”
While others might coin that move to borrow a deficit, Mulligan said in the city’s case it’s a “plan spend and a plan borrow.” Potential city projects that would require borrowed financing have yet to be determined.
City officials are working on the budget now and the mayor expects “hard numbers and hard program objectives” will be in place soon. ‘Committee of the whole’ meetings have been scheduled and on April 1 the city will review its consolidated budget. It wasn’t until well into the summer that the city’s budget dropped last year, Mulligan is aiming for sooner rather than later this year.
“It’s a little bit like swimming up hill, but this needs to be a priority,” he said.