WHY CITIES MIGHT SUE

explains the feud between the province and municipalities over Bill 64. The Saskatchewan Party government’s 2017-18 austerity budget included the revelation that about $33 million worth of Crown corporation grants would be paid into the province’s general revenue fund rather than accounts belonging to 109 municipalities. As the prospect of a legal battle over the issue again rears its head, here’s why it matters, and what happens next. Q What are Crown corporation grants? A Provincial Crowns have for years paid grants worth tens of millions to municipalities. The money is intended to compensate municipalities for their inability to tax the Crowns, which use local services. Some grants, like those paid by SaskPower and SaskEnergy, also hinge on contracts under which cities and towns gave up their rights to distribute electricity and gas in exchange for compensation. QWhat changed? A As part of the budget, the Saskatchewan Party government introduced Bill 64, which will redirect into its general revenue fund about $36 million — subsequently reduced to $33 million — that would otherwise have been paid to 109 municipalities by SaskPower, SaskEnergy and TransGas. Grants paid by other Crowns, such as SGI, are expected to stay in place. Q Why was this controversial? A The Saskatchewan Urban Municipalities Association and others have argued the government has no right to scrap decades-old contracts between its members and the Crowns. The decision forced municipalities to hike taxes or cut services. The province argued it helps correct an “inequitable” system under which some communities received more funds than others. Q What is Bill 64 and how does it factor into this dispute? A Bill 64 amends the Power Corporation Act and the SaskEnergy Act to “redirect into the general revenue fund the amounts that are currently paid to municipalities as payments or grants-in-lieu of taxes.” Last month, cities discovered that it contained a clause preventing them from launching any kind of legal action in an effort to restore the eliminated grants. Q What is the situation today? A Government Relations Minister Donna Harpauer told a committee this week that she plans to push for removing the clause, saying it was included as a precaution and was no longer necessary. While a municipal law expert has argued that cities’ lack of constitutional standing means they have “no realistic hope” of winning a challenge, the door to a potential lawsuit has been opened — an opportunity SUMA says it is considering.