WHEREAS the provincial government has not changed the amount of unconditional grants to local governments under 5,000 population since 1998 and the amount provided each year has been eroded by inflation; AND WHEREAS the provincial government has pledged to increase the unconditional grant amounts in the next four years: THEREFORE BE IT RESOLVED that, following the doubling of the small communities and regional district grants by 200910, the provincial government institute indexing of the unconditional grants to ensure that they increase each year to keep pace with increasing costs.
Ministry of Community Services Indexing of transfers to local governments was once a feature of the local government finance system in the Province of British Columbia Province. It was found, however, that it is very difficult to devise an indexing formula that fairly represents the interests of both orders of government over the long term. Conditions change and evolve markedly over time and it is not possible to anticipate all eventualities. By the mid-1990s, the Government of British Columbia Government concluded that indexing was unsustainable. This contributed to the abandonment of indexing in the mid-1990s. Since then, a different approach has been taken. Recognizing that the management of local government transfers is best accomplished through dialogue with local governments, provision has been made in legislation for annual consultation by the Minister of Community Services with the UBCM executive. As part of this dialogue, the issue of the adequacy of unconditional transfers can be addressed, given the economic and financial circumstances of the day. This legislated consultation requirement is often fruitful. As an example, following interaction with the UBCM, the new formula for the Small Community Grant has been substantially revised. It contains such variables as a base amount, population and assessment. The goal is to distribute funds in a fair and transparent way, using a formula that is not static like the old Small Community Protection Grant formula but is responsive to factors like changing service demand and changing revenue potential. For larger municipalities, who benefit from Traffic Fine Revenue Sharing, the formula is responsive to both cost and revenue dynamics.