St. John's deserves cut of oil-based windfall: mayor

St. John's needs a new deal with the oil-enriched Newfoundland and Labrador government, the mayor says.

City council unanimously passed a budget of more than $170 million at its regular meeting Monday night, after weeks of controversy about possible cuts to city services.

In the end, the city was able to maintain a contribution to the Aquarena sports complex, raise its subsidy for the Mile One Centre by $500,000 and contribute nearly $1 million to Metrobus to cover increased costs.

Mayor Andy Wells, though, said he is worried that the city will not be able to keep pace with unprecedented growth on the northeast Avalon Peninsula, which has largely been driven by the booming offshore oil industry.

Inflation alone, Wells said, costs the city millions of dollars extra each year.

"Three per cent on $170 million is five million bucks, just to stand still year over year," Wells told reporters.

"So we have some serious issues to confront us, and I think all municipalities in the province are facing [a] similar situation."

High oil prices have helped push the Newfoundland and Labrador government into a record-setting surplus. Last week, Finance Minister Tom Marshall announced the government is on track to finish the fiscal year with $881 million more than triple the budget projection made last spring.

Wells said too many city employees are already working long hours to make sure new developments proceed. He said he is optimistic that the provincial government will be able to share its windfall with cities and towns under a new municipal financing agreement.

"They're complaints I got, but don't get me wrong. They're good complaints," he said.

"These are problems of prosperity, and growth, and development and opportunity."