With the province’s decision to cut the Grants In-Lieu program for SaskPower and SaskEnergy, many municipalities feel they will be forced to take desperate measures to make up the shortfall.
At an emergency city council meeting last night, Saskatoon Mayor Charlie Clark said the city may have to raise property taxes by as much as ten per-cent.
The city of Regina has also called an emergency meeting for Monday night to discuss measures they may need to take.
Provincial NDP Leader Trent Wotherspoon said on Monday this decision is going to hit municipalities and Saskatchewan people hard.
“To rip millions of dollars way from municipalities at this time comes with big time costs by way of the services we depend on and the cost that tax payers are ultimately going to have to pay through increases to property taxes,” Wotherspoon said.
Wotherspoon says the municipalities that do have reserve funds should not be forced to dip into them to cover the province’s mismanagement of the rainy day fund.
Minister of Government Relations Donna Harpauer said Saskatchewan’s two major cities (Saskatoon and Regina) have significantly large reserve funds, something they have access to for situations such as this.
“Year-over-year we have significantly increased revenue sharing, and I don’t think the intent of the revenue sharing is for them (municipalities) to build their bank accounts, so we think that they could look at their reserves if they have a bit of a shortfall this year,” Harpauer told reporters Monday afternoon.
Harpauer also said they are encouraging municipalities to look for efficiency’s in their budgets before dramatic tax increases are implemented.
The province also feels municipalities should not be surprised by the decision to end the Grants In-Lieu programs, saying it was announced all along everything was on the table ahead of this year’s provincial budget.
“We have been very clear with the public in general as well as SARM and SUMA that this was going to be a tough budget and absolutely everything was on the table. The Premier as well as myself made an address to the SUMA Convention and the SARM Convention and in both of those conventions the Premier specifically mentioned Grants In-Lieu,” Harpauer also said.
The province also provided more information on the effects municipalities will see.
The result is that an estimated 108 municipalities will no longer receive a grant in lieu payment from SaskPower or SaskEnergy.
The City of Saskatoon and City of Regina each see a reduction of an estimated $10.6-million due to the redirection of this payment.
The City of Regina would continue to receive a payment totaling approximately $7-million in order to equalize the impact on the City of Regina to no greater than the impact on the City of Saskatoon.
Total revenue to the GRF of $35.9-million is estimated.
Grants in lieu estimated, at $29-million, will still be paid by the remaining Crowns and executive government to the municipalities based on the estimated property tax on provincially owned assets.
In addition, SaskPower collects a municipal surcharge on behalf of municipalities valued at $74-million which remains in place.
- City of Regina calls emergency budget meeting Monday after grants-in-lieu program cut in provincial budget
- Saskatoon council considering legal action against province over lost grants