On December 6, 2017 a new agreement on municipal funding for PEI was signed in Charlottetown. Under the five-year agreement municipalities that provide streets and/or police will receive tax credits for streets/police and base funding. The base credit will be available to other municipalities as they meet the requirements for towns under the new Municipal Government Act. A planning credit will be provided to all municipalities that provide land use planning.
Equalization will be calculated according to the formula for 2018, with farm property excluded from the calculation. Equalization will be increased annually according to the average increase in municipal assessments until the next census. The Provincial Infrastructure Fund has been replaced with the Municipal Capital Expenditures Grant program, which provides a grant equivalent to 10 percent of capital expenditures.
The new arrangements include top up funding to ensure that no municipality receives less funding over the five year period of the agreement.