City Council Seeking Legal Measures Among Other Options to Address Provincial Gov’t Refusal to Pay Grants in Lieu of Property Taxes

City Council wants to explore appropriate legal measures in coordination with SUMA and other affected municipalities – including a court injunction – to stop a provincial government plan that would create an $11.4 million shortfall in City finances.

“We are not raising taxes today. Instead we are considering every other option available,” says Mayor Charlie Clark. “What is happening is not fair or equal. The provincial government is asking city residents to pay twice for the same service. This is not right and we believe the provincial government should reconsider and explore other options.”

The Government of Saskatchewan released its budget Wednesday March 22, 2017; it became clear the provincial government plans to stop paying Grants-in-Lieu (GIL) of property taxes and to redirect those funds to the provincial government general revenue fund.

“The provincial government-owned power and gas companies are still charging customers the same amount, but instead of passing some of that on to cities, towns and villages for services those companies use, the government is keeping that money,” Mayor Clark says.  

“This leaves the City in a situation where our citizens will have to make up this loss of revenue one way or another - whether in service cuts or further cost reductions.”

Following a four-and-a-half hour special meeting Sunday afternoon, Council also resolved:

• To look into the long-term service agreements and options over lease payments from the Province for the P3 school sites including, but not limited to, charging market rent for the land
• That the Administration report on how much the Province be charged for emergency services and any other services the City provides on its properties
• That the Administration explore a market rent for the Rights of Way access by Crown Corporations
• That the Administration report on options for internal savings and revenue
• That the Administration implement a temporary hiring and discretionary spending freeze until Council can make a decision how to handle this situation, subject to the discretion of the City Manager (in the case of filling positions related to life-safety)
• That it request a joint meeting with Saskatoon Caucus MLAs from both parties to give them an information session on the impact the 2017 Provincial Budget will have on the citizens of Saskatoon

Mayor Clark stresses the provincial government’s move will have a huge impact on cities, towns and villages across the province.

“The city of Yorkton, for example, would lose the equivalent of 58% in revenue sharing – that’s a big hit.”

City Manager Murray Totland reports that nearly two-thirds of Saskatchewan’s population live in cities and are growing while other municipalities are getting smaller. He emphasizes that cities are the economic engine of the province and the magnitude of this cut is unprecedented and will have a lasting impact.

Clark adds the provincial government has suggested municipalities can fix this by taking money out of their reserves.

“Taking the money out of reserves would create a huge problem and a future liability for the city. We can’t kick the can down the road and create problems for the future,” states Clark. He says reserves are meant for when there is a big snowstorm or when buildings start to deteriorate. 

“This is why the Traffic Bridge went from being a $400,000 paint job to a $35 million bridge replacement - because there was not enough money put away to look after and maintain that bridge in the first place. We need to have the ability to maintain what we’ve already built.”  

Mayor Clark will join with other Mayors and Municipal leaders on Wednesday to meet with the provincial Minister of Government relations, Donna Harpauer, possibly other related Ministers.

“I will be talking about the impact this will have on our ability to provide services to our residents, the risk of drawing down reserves to pay for operating deficits, and the need to find another approach to dealing with this situation.  We need to take a problem-solving approach and keep the lines of communication open.”