City Uses Less Than Half Of $22M Bailout Funding

Councillors in Saint John say the city has been fiscally responsible with the short-term financial help it received from the province in recent years.

In 2018, the previous Liberal government entered into a funding agreement with the city to provide up to $22.8 million over three years.

It was part of a so-called “new deal” to help improve the city’s financial situation and eliminate its multimillion-dollar structural deficit.

But preliminary figures presented to the finance committee this week show just over $10.3 million was used over the three years.

Mayor Don Darling credited the city’s “good fiscal stewardship” for not needing to use the full amount.

“We have managed those dollars very carefully, we didn’t abuse them, we took that very seriously and we knew that the support, while necessary at the time, we wanted to stand on our own two legs,” said Darling.

The city eliminated its $10-million structural deficit in the 2021 budget. Just over $6 million came from cuts to police, fire, inside and outside workers and management staff, while the rest came through the city’s sustainability initiative.

But the provincial funding agreement which helped the city get to that point did not come without its fair share of criticism.

New Brunswick’s auditor general blasted the deal in 2019, saying the former Liberal government went around provincial laws when agreeing to give Saint John money.

Kim Adair-MacPherson said the deal did not have legislative authority and then-premier Brian Gallant appeared to guarantee assistance months earlier in a letter to the city before getting cabinet approval.

MacPherson said the agreement constituted “excessive risk” to taxpayers by not including specific outcomes and created “inappropriate incentive” for the city to keep running deficits.

Coun. Gary Sullivan said he knows council members will be criticized for not spending the rest of the provincial funding but believes it was the right decision.

“We recognize there’s one taxpayer, whether it’s the City of Saint John taxpayer or the Province of New Brunswick taxpayer, that’s $13 million of taxpayer dollars that we managed to not spend,” said Sullivan.

Darling put forward a motion calling for a letter to be sent to the premier’s office, local MLAs, the minister’s office and the auditor general’s office acknowledging the city’s success.

“This organization was attacked, I was attacked, we were all attacked for political feeder in some cases,” he said. “My motion would be simply that a letter be written highlighting the facts related to the dollars used from the short-term provincial monies.”

City staff recommended that the letter be sent once the preliminary financial figures from 2020 are audited.