Saskatoon City Councillors spent 4-and-a-half hours on Sunday afternoon deciding the next steps to address an unexpected $8-million shortfall in Saskatoon’s budget, and one potential option is to pursue legal action.
The issue resolves around the grant-in-lieu on taxation for SaskEnergy, SaskPower and TransGas.
Mayor Charlie Clark says a portion of the utility payments by residents is returned to communities as grants-in-lieu to pay for city property taxes.
However, in the province’s budget last week, a proposed amendment would see the grant-in-lieu removed for 109 municipalities, forcing cities, towns and villages to cover the property tax bill.
That would cost Saskatoon $8 million this year, and $11.4 million each year after that.
Clark says by the province taking the grant-in-lieu fund and putting it into general reserves, “they’re asking citizens to pay twice”, because the city would need to compensate for the shortfall.
After an in-camera session to discuss legal action that took an hour and a half, councillors and the mayor emerged with a number of recommendations.
These include taking legal action – if necessary – to file for an injunction alongside the Saskatchewan Urban Municipalities Association and others affected in the municipal sector.
Other suggestions include a temporary hiring and discretionary spending freeze, a joint session between council and Saskatoon MLAs to discuss the challenges, and a request that administration look into potential tax increases or service cuts to address the deficit.
Over the weekend, Premier Brad Wall referenced Saskatoon’s reserves to deal with the issue. After the special city council meeting to discuss the shortfall, Mayor Charlie Clark says that is not an option.
Clark will be meeting with Minister of Government Relations Donna Harpauer and Regina Mayor Michael Fougere on Wednesday to discuss reconsidering the move.
If not, Clark says the City of Saskatoon is prepared to file for an injunction.