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The Municipal Sector Strategic Plan (MSSP) is intended to set out long term directions for the municipal sector and its relationship with the province, and a work plan for achieving those directions. One of the key components of this work is to assist in developing a new revenue sharing deal based on the provincial government’s commitment to include a percentage of the provincial government’s own source revenue towards municipal revenue sharing. The goal is to establish a long term, predictable and sustainable approach to provincial revenue sharing for municipalities that grows with the provincial economy.

In 2007, prior to the new government’s commitment, the province and municipal sector, specifically the cities began work on development of a new policy based approach Revenue Sharing policy framework. 

The work to establish a policy framework involved the following tasks:

• identifying municipal roles and responsibilities in order to determine financial requirements;
• analyzing roles and responsibilities to determine if they should be paid for primarily or partly by property tax, or from some other source;
• determining the provincial interest in municipal roles and responsibilities in order to establish linkages for possible funding decisions;
• completing fiscal “gap analysis” to determine the difference between the cost of carrying out municipal roles and responsibilities and the fiscal capacity available to municipal governments from tax and elsewhere;
• assessing “cost drivers” to help to determine factors that could be used to project Revenue Sharing increases in the future.

The analysis resulting from this work will be used when developing a new revenue sharing agreement with the municipal sector.