It was a good year for development in Charlottetown and Mayor Clifford Lee wonders if the HST might have had something to do with it.
The city released its annual mayor’s report this week and it showed the planning department issued almost $115 million in building permits for the first 11 months in 2012.
That was up 8.5 per cent over the previous year.
Lee said he heard from a lot of developers who told him they did work in 2012 instead of 2013 to get ahead of the implementation of the HST.
But what that means for construction in 2013 is still unclear, he said.
“I’m not sure what to expect,” he said.
The provincial government plans to implement the HST in April, which will apply to new construction.
Lee said only time will tell if the tax was the reason for the increase, but he’s not worried what will happen in 2013 once the tax is in place.
“If the development didn’t happen this year (2012), it was going to happen next year (2013), so I don’t think we can blame HST for it not happening,” he said.
Even if there is a short-term impact, Lee said he doesn’t expect it to have a lasting negative impact.
“The development will take place as the economy calls for it,” he said.
This year’s annual report included a breakdown of Charlottetown’s finances and showed that servicing the city’s debt took up 12 per cent of the $43.1-million budget.
That means the city spent more than $5 million to service its debt in 2012.
Lee said it was one of the biggest budget items but the city has undertaken a lot of capital projects since it amalgamated in 1995 to make sure the same services were offered to everyone in Charlottetown.
“That’s a large portion of the debt servicing,” he said.
Charlottetown also saw a drop in its municipal grants last year after the province changed the way it provided funding, which had an impact on the city’s finances.
Less money meant debt servicing took up a larger portion of Charlottetown’s budget.
Lee said he hopes the province doesn’t reduce revenue sharing any further and with the city still in discussion with the provincial government it would be premature to give any expectations about what will happen.
“I’d much rather conclude those discussions,” he said.