05/22/2014 11:28 EDT | Updated 07/22/2014 05:59 EDT

Mayor of Cape Breton Region says Nova Scotia government funds will help little

HALIFAX - Nova Scotia's municipal relations minister says he has handed over extra cash to the Cape Breton Region to help it deal with a serious budget shortfall, but the municipality's mayor says the money will do little to relieve its fiscal pain.

"Cape Breton is certainly facing financial challenges as are many other municipalities," Municipal Relations Minister Mark Furey said Thursday after the weekly cabinet meeting in Halifax.

Furey declined to reveal how much money he had given the region, saying that information should come from Mayor Cecil Clarke.

Clarke later said the province agreed to give $725,000 from existing municipal programs, but he added that the funding will have little impact on the region's budget because the money was already expected.

Of that money, $250,000 is set aside for wastewater program planning, $50,000 for recreation planning and $425,000 will go to transit — which Clarke said was less than the $480,000 in transit funding he expected.

The cash-strapped municipality approved a budget this week that included an appeal to the province for financial help. It also called for job and service cuts, and a major reduction to the transit service.

"We did our jobs to get to balance without increasing the tax rate but tough choices were made to get there, including choices that were understandably upsetting," Clarke said in a statement.

Furey said there is room for further discussions with Clarke.

Clarke, the mayor of Nova Scotia's second largest municipality, said the municipality struggled to cope with costs downloaded by the province.

He said the municipality was looking at up to $5 million in additional costs it can't afford.

He also cited a $317,000 reduction in provincial equalization and earlier this year pointed to a $1.8 million increase in costs due to collective agreements and arbitrated wages.

Clarke has said the municipality's revenues are also lower than expected because of the impact of the provincial assessment cap, which is growing at a rate of only 0.9 per cent this year.

He said the municipality has $12.3 million available for capital spending that is awaiting matching funds from the federal and provincial governments.