RCMP Municipal Interest Remission

Summary#

The Canada Gazette published the Interest on Debts for Services Rendered by the Royal Canadian Mounted Police Remission Order: SI/2023-7, an order that cancels interest charged to municipalities on certain RCMP policing debts. It applies to interest tied to retroactive pay increases covering April 1, 2017 to March 31, 2021. The order was registered April 12, 2023 (Order in Council P.C. March 27, 2023).

What it does#

• Remits (cancels) interest paid or payable by municipalities for debt arising from retroactive RCMP pay increases for the period April 1, 2017 to March 31, 2021 under their Municipal Police Service Agreement.
• Responds to retroactive pay tied to the first collective agreement between the National Police Federation (NPF) and the Royal Canadian Mounted Police (RCMP), which covered April 1, 2017 to March 31, 2023 and included nearly 15.2% in retroactive salary increases over four years.
• Notes that the total retroactive costs owed by all contract jurisdictions were estimated at $448.1 million (this order remits interest only, not the retroactive pay itself).
• Explains the federal government will offer flexible repayment timing (up to two years beyond usual deadlines) for the principal amounts; without this remission, extended schedules would normally accumulate interest.
• Points out that, because of how contracts are structured, municipalities in British Columbia were already exempt from interest under existing arrangements.

Who's affected#

• Municipalities that contract RCMP policing services under the Municipal Police Service Agreement are the direct beneficiaries of the interest remission.
• Provinces and territories were already not required to pay interest on Crown debts under the Financial Administration Act, which is the fairness rationale behind this order.
• Other RCMP contract partners (for example Indigenous communities or airports) are not clearly covered by this specific order in the text; their situations depend on different agreements (the source does not make their status explicit).
• Local taxpayers and municipal budgets: officials who manage local finances will see the practical effect as lower carrying costs when repaying the retroactive amounts.

Why it matters#

• It lowers the extra financial burden on municipalities that must repay retroactive RCMP salary costs. Removing interest can reduce payments and ease pressure on local budgets.
• The change aims to treat municipalities more like provinces and territories, which already do not pay interest on Crown debts, so it is intended to be fairer across jurisdictions.
• For local services and planning, the move may free up money that would otherwise go toward interest, which could be used for public services or to absorb other cost pressures (e.g., inflation, rising operating costs, pandemic recovery).
• This order cancels interest only; it does not forgive the underlying retroactive pay amounts themselves.